If you and your spouse have a living trust in Nevada and your spouse passes away, you may be at a loss as to what you need to do. The steps you need to take are not really complicated, but may be confusing. There are some initial tasks that need to be completed. Receiving guidance from a living trust attorney in Reno, NV and knowing what to expect can make the process much easier during a time that is no doubt stressful.
The first step would be to locate the living trust document and obtain a general understanding of its terms. You should do this, even if you read it when it was first created. This is especially true if it has been many years since it was first drafted. Usually, a Nevada living trust is drafted to leave all assets to the surviving spouse. However, some trusts are drafted to include distributions to other heirs, as well. All provisions of the living trust need to be fully understood before any action is taken to implement its terms. If you have any questions or concerns regarding any of the provisions, you should consult with a living trust attorney in Reno, NV before you go any further.
Also, you need to be able to recognize what type of living trust you are dealing with because the nature of the trust will determine exactly what steps you need to take. If you are not sure what type of trust you have, your estate planning attorney can also help you make that determination.
If your living trust is an “A/B Trust,” there are certain steps that must be taken after the death of the first spouse. An A/B trust divides the separate and community assets into two shares when the first spouse dies. However, the division of assets does not occur automatically but must be accomplished by physically transferring the assets into two separate trusts. The assets must be inventoried and appraised so that a determination can be made as to how to allocate the assets. An income tax return is also required for the decedent’s trust each year after death or else the IRS will not recognize the trust, making the entire estate subject to estate taxes after the death of the second spouse. This type of trust must be handled properly because if the requirements are not met, the result could mean thousands of dollars in estate taxes that need to be paid by the family, or lawsuits for improper actions may make the surviving spouse or successor trustee personally liable. This result would defeat the true purpose of the Nevada living trust.
It is very common for living trusts to name both spouses as co-trustees. In that case, when the first spouse dies, the assets will be transferred to the surviving spouse as the sole trustee, similar to jointly-owned property. However, unless a death certificate and abstract of the trust are provided to institutions such as banks, they will continue to request two signatures for transactions. Real estate may also require special treatment. It is important to contact a qualified estate administration attorney to be sure you have taken care of all the details in a timely manner.
If you have questions or need assistance creating or administering a living trust for you and your spouse, contact the estate planning attorneys of Anderson, Dorn & Rader, Ltd.