Although many people equate “estate planning” with having a will, there are many advantages to having a trust rather than a will as the centerpiece of your estate plan. While there are other estate planning tools (such as joint tenancy, transfer on death, beneficiary designations, to name a few), only a trust provides comprehensive management of your property in the event you can’t make financial decisions for yourself (commonly called legal incapacity) or after your death.
One of the primary advantages of having a trust is that it provides the ability to bypass the publicity, time, and expense of probate. Probate is the legal process by which a court decides the rightful heirs and distribution of assets of a deceased through the administration of the estate. This process can easily cost thousands of dollars and take several months to more than a year to resolve. In Nevada, a gross estate of $400,000 in assets under NRS 150.060(4) is subject to $10,000 in fees plus court costs. Larger estates have an even more onerous probate fees. Or course, not all assets are subject to probate. Some exemptions include jointly owned assets with rights of survivorship as well as assets with designated beneficiaries (such as life insurance, annuities, and retirement accounts) and payable upon death or transfer on death accounts. But joint tenancy and designating beneficiaries don’t provide the ability for someone you trust to manage your property if you’re unable to do so, so they are an incomplete solution. Additionally, joint tenancy creates pitfalls for income tax purposes versus a trust. Last, having a will only does not avoid probate.
Of note, if your probate estate is small enough - or it is going to a surviving spouse or domestic partner - you may qualify for a simplified probate process in Nevada. In general, if your assets are worth $100,000 or more, you will likely not qualify for simplified probate and should strongly consider creating a trust. Considering the cost of probate should also be a factor in your estate planning as creating a trust can save you both time and money in the long run. Moreover, if you own property in another state or country, the probate process will be even more complicated because your family may face multiple probate cases after your death, one in each state where you owned property - even if you have a will. Beyond the cost and time of probate, this court proceeding that includes your financial life and last wishes is public record. A trust, on the other hand, creates privacy for your personal matters as your heirs would not be made aware of the distribution of your assets knowledge of which may cause conflicts or even legal challenges.
A common reason to create a trust is to provide ongoing financial support for a child or another loved one who may not ever be able to manage these assets on their own. Through a trust, you can designate someone to manage the assets and distribute them to your heirs under the terms you provide. This will also protect an inheritance from being lost to a child’s soon to be ex-spouse in a family law matter. Giving an inheritance to an heir directly and all at once may have unanticipated ancillary effects, such as disqualifying them from receiving some form of government benefits, enabling and funding an addiction, losing it in a family law matter, or encouraging irresponsible behavior that you don’t find desirable. A trust can also come with conditions that must be met for the person to receive the benefit of the gift. Furthermore, if you ever become incapacitated your successor trustee - the person you name in the document to take over after you pass away - can step in and manage the trust’s assets, helping you avoid a guardianship or conservatorship (sometimes called “living” probate). This protection can be essential in an emergency or in the event you succumb to a serious, chronic illness. Unlike a will, a trust can protect against court interference or control while you are alive and after your death.
Trusts are not simply just about avoiding probate. Creating a trust can give you privacy, provide ongoing financial support for loved ones, and protect you and your property if you are unable to manage your own assets. Simply put, the creation of a trust puts you in the driver’s seat when it comes to your assets and your wishes as opposed to leaving this critical life decision to others, like a judge.
To learn more about trusts - and estate planning in general, including which type of plan best fits your needs - contact Anderson, Dorn & Rader, Ltd. today at 775-823-9455 to make an initial consultation appointment with one of our estate planning attorneys or make a reservation to attend one of our free estate planning Webinars online HERE.
A trust is more than just a way to avoid probating an estate. There are many benefits, such as the ability to protect your property for your heirs, and reduce the amount of estate taxes that will be incurred. A trust also helps you to prepare for the possibility of incapacity, and to avoid a potential will contest. For clients who agree that a trust is a good option, the next question is usually about the annual fees for a trust in Nevada. There are several factors that determine what the costs may be.
Trustees are entitled to a fee for their services. How much they may be entitled to, can differ from state to state. Whether they will even charge a fee also depends on their relationship to you, in most cases. If the trust is a revocable living trust, you are likely your own trustee, so you obviously would not charge yourself a fee. Family and friends who have agreed to serve as your trustee in the event of your death, often turn down the fee, if they are beneficiaries in the trust, as well. On the other hand, if your trustee is a financial institution, such as a bank or trust company, it will likely have an established fee scheduled, depending on the type of services they provide to you.
On average, annual trust fees can run between one and two percent of the total value of the assets being administered. When a trust is not being supervised by the probate court, there are generally no limitations on what the trustee can be paid for his or her services. But, if you want to avoid disputes in the future, it is best to set the trustee’s compensation in the terms of the trust. That way, there can be no dispute between the trustee and the beneficiaries about the amount of the fees.
Typically, trusts are not created to be managed by a court. In the case of a testamentary trust (one created by a will that takes effect at death), or a trust that has been challenged in court, the probate court will order the trustee to be paid a “reasonable” fee. Nevada provides, by statute, for “reasonable compensation” (Nev.Stat. §153.070) and extra compensation is allowed for any “extraordinary services” (Nev.Stat. §150.030).
Courts have established that the following criteria can be used for determining reasonable compensation:
Nevada’s statute, § 153.070 (2013), provides as follows:
On the settlement of each account of a trustee, the court shall allow the trustee his or her proper expenses and such compensation for services as the court may deem just and reasonable. Where there are several trustees, it shall apportion the compensation among them according to the respective services rendered. It may fix a yearly compensation for each trustee, in a set amount or pursuant to a standard schedule of fees, to continue as long as the court may deem proper.
If you have questions regarding trust fees, or any other estate planning needs, please contact living trust attorneys at Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
You may have heard the term “pour over” Will as it relates to estate planning and wondered what exactly a “pour over” Will is and how it differs from a regular Last Will and Testament. In essence, a pour over Will operates the same as any other Will, except that it has one primary purpose or goal -- to transfer estate assets into a trust upon the death of the testator, or maker of the Will.
People create living trusts for a variety of reasons. Tax advantages, probate avoidance, and control over assets are common incentives for the creation of a living trust. When you create a living trust, you fund the trust by titling the estate assets in the name of the trust. Sometimes, estate assets remain in the estate at the time of death that you wish to become part of the living trust. A pour over Will accomplishes this goal by including terms that direct estate assets to be transferred to the trust when you die.
There is one main reason why a pour over Will may be a good idea. In some cases, there is a legitimate reason why an asset cannot be placed immediately into the trust. Real property, for example, may need to be titled in your name for financing purposes. If you fail to later transfer it into the name of the trust, a pour-over will will do so after death. A pour over Will, then, provides a safety net of sorts for anything that you forgot to transfer into the trust while alive. By including a pour over Will in your estate plan, you can be assured that assets that were inadvertently left out of the trust prior to your death will end up in the trust after your death. Keep in mind, however, that a pour-over Will is a safety net. It is a Will, so a probate of the assets will be required. To avoid probate, you want to be vigilant in keeping your assets properly titled in the trust, if possible.
Though there are estates that will require some complex plans, the majority of people are going to have to concern themselves with two major issues. The first one is very obvious: you must execute a vehicle or vehicles of asset transfer. The most common way to leave your property to your loved ones is through the utilization of a last will.
Though the last will is the most widely used vehicle of asset transfer, it is not always the best one. When you use a last will your estate must pass through the process of probate, which can be lengthy, expensive, and public. Many people choose to avoid probate for these reasons, and the most common way of doing so is through the creation of a revocable living trust.
With these trusts you appoint a trustee, which can sometimes be a bank or trust company, who will administer distributions to your beneficiaries after your death in accordance with your wishes. These asset transfers take place outside the process of probate, and the creation of the trust provides some asset protection for your beneficiaries as well.
In addition to facilitating the transfer of assets, the fundamental estate plan will also include an incapacity planning component. You can protect yourself through the execution of a durable financial power of attorney and a durable power of attorney for health care. With these documents you empower representatives of your choosing to make decisions on your behalf should you become unable to do so due to incapacitation.
These are a couple of the basics, but in the end the best way to truly demystify the process of estate planning is to consult with an experienced estate planning attorney. This type of communication is invaluable, and you will invariably feel a weight lifted off your shoulders when you exit your attorney's office with a solid estate planning strategy having been decided upon.
The field of estate planning contains many different legal instruments that most people have never heard of, so it can be kind of confusing when you start to do your research. On the other hand, there are some estate planning tools that are commonly used that most people have heard of that exist in some variations. As they say, a little bit of knowledge can sometimes lead to misconceptions, so we would like to clear up the difference between some of the basic terms that are often confused.
Everyone has heard of the last will, which is of course the most commonly used vehicle of asset transfer when a person dies. Many individuals are aware of the fact that there is an alternative to the will that prepares assets for eventual distribution while you are still alive. Since the last will is a vehicle of asset transfer, when some people hear the term "living will" they assume that this must be the way that you prepare assets for distribution while you are alive, but this is not the case.
A living trust is the vehicle of asset transfer that is executed while you are still alive. You can actually serve as both the trustee and the beneficiary while you are living so that you retain full control of the resources. But you name secondary beneficiaries and a successor trustee who will distribute the assets to your beneficiaries upon your death or incapacitation in accordance with your wishes.
The living will, on the other hand, is an advance health care directive. It is used to express your preferences with regard to the medical procedures you would accept and those that that you would prefer to deny in the event of your incapacitation. The matter of being kept alive through the utilization of life support systems is at the core of most living wills.
To learn more about living trust lawyers, get in touch with the trust attorneys at Anderson, Dorn & Rader. Call (775) 823-9455 or fill out the form below to get started.
For starters, a living trust allows your heirs to avoid probate, an often costly and time-consuming legal process used to distribute your assets. With a trust, the distribution is handled within the trust documents. Because the trust technically owns the assets, no probate is required.
Unlike a will, the details of your trust are not public record. That means your estate remains private and your loved ones are protected from would-be con artists and overly aggressive sales people looking for a quick bargain.
A trust also gives you some options that you can’t get with a will. You can create incentives for your heirs for example, allowing them to increase the amount of their inheritance by achieving certain goals and objectives. Perhaps you set up the trust to match whatever income they earn on their own or to encourage higher education, your heirs can receive a bonus if they graduate college.
Likewise, you can use your trust to ensure that heirs with behavioral problems or addictions get help before inheriting a large sum of money.
Another one of the benefits of a living trust is that it also streamlines the entire distribution process, allowing you to create a legacy that can provide for multiple generations to come.
If you're still having trouble choosing between a will or living trust for you estate planning purposes, speak with the living trust lawyers at Anderson, Dorn & Rader, Ltd.
While no one likes to think about a time when they're no longer around, we all secretly wonder the same things: Will my spouse have enough to live on when I'm not there? Will I be able to leave a legacy for my children? Will the family home stay in the family, or will it have to be sold to pay off creditors and taxes? This is why estate planning is important and necessary.
Estate planning is simply a way to protect your assets and your loved ones by creating legally valid documents that address a variety of concerns. Do you have a child that has special needs? Then a special needs trust might be the solution for you. This type of trust allows you to provide for a disabled or incapacitated dependent without affecting their eligibility for government-assistance programs. This trust can also be a component of a larger family trust, often called a Living Trust, that shields your assets from probate, minimizes taxes and even provides a way to give your heirs incentives for going to college, getting a job and similar personal growth accomplishments.
A good estate plan will also include a Powers of Attorney which are documents designed to designate someone to step in and speak on your behalf in financial and medical matters. In addition, you should have Advance Directives (a living will and health care power of attorney) that tells your healthcare providers how to handle life support and resuscitation matters.
In a nutshell, your estate plan is something you really can't do without and it's important that you have all of the key essentials. Hire an estate planning attorney! Anderson, Dorn & Rader, Ltd. has experienced estate planning lawyers that you can trust.
A living trust and living will might sound similar but actually, the two are quite different.
A living trust is designed to help protect and distribute your assets. The assets are actually titled in the name of the trust and depending upon the terms of your trust, you may have complete control or hand the management of the trust over to someone else. Upon your death, beneficiaries receive the assets according to your terms in the trust. A method of avoiding probate, it’s a way of bypassing the lengthy and often expensive court process of distributing your assets.
A living will, however, is a legal way of informing your physician what you want done in case of a terminal condition. It’s used when you can no longer communicate your wishes due to an injury or illness that leaves you incapacitated. Your living will should be accompanied by a health care power of attorney. This document designates a person to speak on your behalf and relay your wishes with regard to certain medical treatments and decisions. It might relate to resuscitation, feeding tubes, etc. These "advance directives" also give loved ones peace of mind knowing that they are doing what you would have wanted.
It’s highly recommended that everyone draw up advance directives including a living will and a health care power of attorney, whereas a living trust is especially beneficial for those with a certain level of assets. To get help with a living will or living trust, a good estate planning attorney is your best bet.