It can be intimidating to consider the possibility of relinquishing control over your property. People sometimes assume that you do surrender control of assets when you create a trust.
In this post we will provide some clarity about creating a trust in northern Nevada.
There are different types of trusts. Perhaps the most commonly utilized trust in Reno NV in the field of estate planning is the revocable living trust.
These trusts are largely useful to enable probate avoidance. If you use a last will to state your final wishes, the estate must be probated before your heirs receive their inheritances.
This process can be expensive and time-consuming. Most people would like to facilitate timely asset transfers.
When you use a revocable living trust to arrange for these transfers the distributions to the beneficiaries will take place outside of probate.
Because of the fact that the trust is revocable, you do retain control of assets that you convey into this type of trust.
You can act as both the trustee and the beneficiary while you are still living, and most people will do this. As a result, you can control investments and give yourself distributions as you see fit.
The control doesn't stop there. Because the trust is revocable, you can actually dissolve or revoke it at any time. The terms that you originally set forth are not etched in stone either. You can change them and add or subtract beneficiaries.
There are irrevocable trusts as well. With some exceptions, these trusts do require you to surrender incidents of ownership, so you do not continue to have control of the property that has been conveyed into the trust.
Because the trust is not revocable, you cannot dissolve it, and generally speaking the terms cannot be changed.
Why would you want to create a trust that did not allow you to retain control? There are a number of reasons.
Certain estate tax efficiency strategies involve irrevocable trusts. Because the assets would be owned by the trust rather than the estate, there are certain benefits.
In addition, when you surrender incidents of ownership by placing assets into an irrevocable trust they are generally going to be protected from creditors and claimants seeking redress. Nevada does allow some irrevocable trusts to be "self-settled," so some incidents of ownership are retained, but these are sophisticated strategies that require the advice of competent counsel to establish and fund.
The best way to proceed if you have questions about estate planning would be to discuss everything in detail with a licensed Reno Nevada estate planning lawyer.
Rather than looking for answers to general questions about what trusts can and cannot do, you would be better off consulting with an attorney. You can explain exactly what you want to accomplish, and your attorney can give you direct answers to your specific questions.
In a challenging economy we are often tempted to "DIY" (do it yourself). So, is it possible to write your own Revocable Living Trust? Yes, but you should know the disadvantages to a poorly drafted Living Trust before you begin.
There are three positions in the creation of a Revocable Living Trust Agreement: the Trustors, the Trustees, and the Beneficiaries. After completing the trust agreement, it is vital that you fund all assets into the name of the Trust. If you fail to set up and fund the trust properly, you risk at least two unhappy consequences: disinheritance and probate.
When you create a Trust, it is important to maintain your beneficiary designations. You must add new beneficiaries when they are born or join your family and take out beneficiaries who are deceased or have left your family. If you write your own Trust, you will be solely responsible for this. If you do not add or delete a beneficiary, or fail to do so in the proper form, you could possibly disinherit a loved one, or include someone who is no longer in favor. Many attorneys have a maintenance program, so your Living Trust can receive regular reviews to be certain you to update your beneficiaries properly.
One important purpose of a Revocable Living Trust is to avoid probate. Probate is a costly and time consuming procedure. If you create your own Revocable Living Trust, you are increasing the chances that your family will have to deal with this sticky process.
When you hire an attorney, he or she can help you properly fund your Trust, make sure you have not left out an heir and ensure that your trust agreement meets current estate law. If your document is not properly drafted, probate may be needed for your entire estate. If you have not removed deceased beneficiaries, a court may have to determine who your beneficiaries should be. Further, if you have not properly funded your assets into your Trust, the only way to do so is through the probate process.
Your attorney can also help you create a Pour Over Will. This Will may assist if you leave any asset out of your Trust. A Pour Over Will is a safety net to transfer your assets into your Trust typically through a short version of probate.
If you create your own Trust, you will also be responsible for your own Will. If you leave property out of your Trust and you don’t properly create a Pour Over Will, a prolonged probate will be needed to determine the rightful heirs-at-law.
When you "do it yourself" to repair a leaky pipe, it may just require a plumber to do it right, if your repair fails. Writing your own living trust is a complicated process that could be many times more expensive and time consuming when it is not done right. This is no time to DIY.
To learn more about living trusts, the living trust lawyers at Anderson, Dorn & Rader are here to help. Call (775) 823-9455 to schedule a consultation today.