Trusts are fiduciary arrangements in which trustees hold assets on behalf of beneficiaries. In a trust, assets can be passed to beneficiaries in a specific manner and at a specific time. A trust may allow a person to avoid the probate process when it comes time to distribute assets. Trusts often save time, money, and court fees for the family and may even reduce estate taxes in some cases. It is very important to consult with an experienced attorney before creating a trust. If you need quality legal assistance, contact our firm today.
What are the different kinds of trusts?
In Estate Planning, trusts offer numerous advantages, including avoiding probate, minimizing taxes, maintaining control, and providing for yourself and your heirs. Trusts, at their core, are simply instructions that tell people what to do and when to do it.
Despite the fact that there are many types of trusts, the most important difference is whether they are revocable or irrevocable. Both have pros and cons, and are appropriate for different circumstances.
Revocable Trusts
Revocable trusts are also known as a living trust because it benefits you during your lifetime and can be altered, modified, or revoked at any point in time.
- Revocable trusts allow you to remain in complete control. You can transfer property to a trust, take it out, serve as trustee, and be beneficiary.
- You can designate successor trustees to manage the trust, if you become incapable or pass away.
- A Nevada Revocable Living Trust prevents your estate from going through the probate process because it acts as a separate legal entity created during your life to hold your assets. Consequently, creditors cannot access assets held in trusts without obtaining an order from a court in order to gain access.
Irrevocable Trusts
When irrevocable trusts are used, assets are transferred from the trustmaker’s estate to the trust. The trustmaker cannot alter, change, modify, or revoke this trust after it is established.
Why choose an irrevocable trust? Trusts with irrevocable provisions provide tax advantages, asset protection, the avoidance of probate, and benefits for disabled beneficiaries who need ongoing support.
- Assets held in irrevocable trusts offer increased asset protection and are untouchable by creditors.
- Generally, assets in irrevocable trusts are no longer counted as estate assets, which reduces taxes.
- If your goals are not being met, trust protectors can modify your trust.
Revocable v. Irrevocable
Which one is right for you? Consider:
- Is there a level of control and power you want to have?
- Who are you trying to protect?
- Are you concerned about tax liability?
In addition to revocable and irrevocable trusts, each of these categories includes numerous types of trusts that have specific purposes. Some of these categories of trusts include bypass trusts, charitable trusts, charitable lead trusts, charitable remainder trusts, credit shelter trusts, grantor trusts, marital trusts, and special needs trusts.
Our team at DRS will assist you through this journey. We will evaluate your goals and circumstances, and advise you about whether you need a trust, and if so, which type is most appropriate for you.
Contact a Henderson Trust Attorney
Your choice of a trust is a personal one. Your financial situation can also play a significant role. It is highly beneficial to consult a lawyer about the financial future of you and your loved ones, regardless of the assets you may have. Dempsey, Roberts and Smith provides legal services to clients throughout Nevada for estate planning and administration. For guidance through the establishment of a trust, contact our team for a free consultation.