Living trusts safeguard assets while a person is alive and transfer them to their loved ones after they pass away, allowing those assets to bypass the probate process. Under Nevada estate planning laws, this tool provides significant benefits by allowing for smoother asset transfers and potentially reducing estate taxes.
You might consider a living trust if you own substantial assets, want to maintain privacy in your estate matters or wish to protect your loved ones from court proceedings.
How living trusts work
Creating a living trust involves establishing a legal document that names you as the grantor, designating a trustee to manage the assets and identifying beneficiaries. For revocable trusts, you can serve as trustee while you’re alive, maintaining complete control over your property.
Assets you can place in a living trust include:
- Real estate and homes
- Bank and investment accounts
- Vehicles and boats
- Business interests
- Personal property like jewelry and art
- Stocks, bonds and mutual funds
Retirement accounts, life insurance policies and other transfer-on-death (TOD) accounts with named beneficiaries typically remain outside the trust.
Two main types of living trusts
Revocable living trusts offer flexibility and control. You can modify, amend or dissolve this type of trust during your lifetime. You maintain ownership of the assets and can change beneficiaries or terms whenever you wish. This arrangement protects you if you become incapacitated, as your successor trustee can step in without court intervention.
Grantors must designate someone else as trustee for irrevocable living trusts, which cannot be easily changed once established. While this limits your control, these trusts offer advantages in protecting assets from creditors and potential lawsuits. They may also reduce your taxable estate and help you qualify for certain government benefits.
Wills vs. living trusts
Unlike wills, living trusts take effect immediately and remain private, avoiding the public probate process. While wills become effective only after death and must go through court proceedings, trusts allow immediate asset management and seamless transfer to beneficiaries.
However, living trusts require more upfront effort and expense. You must actively transfer assets into the trust for it to function properly. Wills remain essential even with a trust, as they can address guardianship for minor children and handle assets not included in your trust.
It is advisable to seek guidance from a skilled estate planning attorney to help determine whether a living trust is appropriate for your specific circumstances and financial goals in Nevada.