Establishing a revocable living trust is a critical step in creating a well-rounded estate plan. Many individuals assume that setting up a trust automatically helps them avoid the complexities of Nevada probate. However, this isn’t always the case. Simply creating a trust is not enough; you must also ensure that your assets are properly transferred to the trust or have appropriate beneficiary designations.
Anderson, Dorn & Rader Ltd. in Reno specializes in Nevada estate planning. This article explores the essential factors that determine whether a living trust will help you avoid probate, what types of assets are subject to probate, and the consequences of not properly funding your trust.
For a revocable living trust to function as intended and bypass probate, it must be fully funded. Funding your trust involves transferring ownership of your assets—such as real estate, bank accounts, and investments—into the trust or naming the trust as a beneficiary.
For example, if you own property, you need to re-title it in the name of your trust. Similarly, financial accounts that you wish to include in the trust must have the trust named as the owner or beneficiary. Without this step, these assets will remain outside of the trust and may be subject to probate proceedings in Nevada.
Failing to properly fund your trust can negate the primary benefit of avoiding probate, leading to potential delays and additional costs for your heirs. Anderson, Dorn & Rader Ltd. can help you ensure all necessary assets are included in your trust.
Not all assets are automatically exempt from probate simply because you have a trust. Probate is required for assets titled solely in your name without a designated beneficiary or joint ownership agreement. Examples include:
Additionally, assets owned as tenants in common with another person will need to go through probate unless explicitly included in your trust or assigned to a beneficiary. A thorough estate plan accounts for these nuances, helping you avoid unexpected probate proceedings.
Certain assets are not subject to probate and will pass directly to beneficiaries upon your death. These include:
It’s important to ensure that beneficiary designations are updated and reflect your current wishes. Anderson, Dorn & Rader Ltd. offers personalized estate planning services to help align your beneficiary designations with your overall trust strategy.
Even with a well-prepared revocable living trust, if your assets are not transferred or titled correctly, they could still end up in probate. This creates additional burdens for your loved ones, who may need to navigate the probate process while managing your estate.
To address this issue, some individuals include a pour-over will in their estate plan. This type of will directs any unfunded assets to be transferred into your trust during probate. However, relying on a pour-over will is not an ideal solution—it still involves going through probate, which can delay the distribution of assets and increase legal fees.
The best approach is to work with estate planning professionals who can help you avoid the pitfalls of unfunded trusts. Anderson, Dorn & Rader Ltd. in Reno provides guidance on properly funding your trust to ensure that your assets are transferred efficiently and according to your wishes.
At Anderson, Dorn & Rader Ltd., we understand that each estate plan is unique. We take a personalized approach to ensure that your revocable living trust is fully funded and aligned with your goals.
Proper planning reduces the risk of probate and ensures that your assets are distributed smoothly to your heirs. Our team will help you review your trust, update beneficiary designations, and transfer assets as needed to avoid probate complications.
If avoiding probate is a priority for your estate plan, setting up a revocable living trust is only the beginning. You must also ensure that your assets are correctly transferred into the trust or designated with appropriate beneficiaries.
Contact Anderson, Dorn & Rader Ltd. in Reno for expert guidance on funding your trust and avoiding probate. Our personalized estate planning services will help ensure your trust operates as intended, protecting your assets and providing peace of mind for you and your loved ones.
