Consult a Nevada Probate Attorney About These Types of Trusts

Talking to a probate attorney is a fantastic way to ensure that your assets are divided according to your wishes at the time of your death. They may recommend setting up one or more trusts as part of your estate planning process. While an experienced estate planning attorney is the best person to give you detailed advice, you will want to consider many types of trusts.

Revocable Trust

A person can transfer assets into a revocable trust during their lifetime. A trustee oversees the trust, and the person creating it names them. The person making the trust can change the terms of the trust anytime they want or name a new trustee. Revocable trusts usually avoid Nevada probate, which can be a lengthy and costly process, but estate taxes may still need to be paid.

Irrevocable Trust

Once a person creates an irrevocable trust, they cannot change the terms of the trust except under extraordinary circumstances. Typically, the assets in these trusts are no longer considered part of your estate, so they are usually exempt from estate taxes. You may be able to use the trust to reduce gift taxes. Furthermore, any income generated by the trust is separate from your income, so it may be taxed at a lower rate.

Testamentary Trust

You set up a testamentary trust in your will and fund it by leaving assets to the trust when you die. You name a trustee in your will who oversees its administration. In addition, you can use a testamentary trust to name guardians in Las Vegas for minor children and those with special needs in these trusts. At the time of your death, there may be tax benefits to those receiving assets from the trust.

Charitable Trust

There are many types of charitable trusts, so you must visit with an estate planning attorney in Las Vegas if you want to create this type of trust to determine the type that meets your need the best. People making these trusts use them to give assets to various nonprofits. Generally, you fund these trusts by putting assets in them, so you may get a tax break. A trustee oversees the trust and manages its assets. One essential decision you must make, which can have significant tax implications, is if you want the trust to be revocable or irrevocable.

Special Needs Trust

People create special needs trusts to provide funds to care for a person with special needs. There are at least three types of special needs trusts, so it is vital to discuss with an estate planning attorney in Las Vegas which type best meets your needs. For example, first-party special needs trusts are self-funded, usually using assets from a settlement, and they may allow the person to remain eligible for some government help. Someone else funds third-party special needs trusts, which may have very tight restrictions on how the assets are spent if the individual with special needs receives government assistance. A trustee manages pooled special needs trusts, and everyone’s money is put into a joint account where individuals can withdraw funds to provide for their care.

Spendthrift Trust

Creating a spendthrift trust may be a solution if you need help managing money. You put your assets into the trust and name a trustee who may be able to distribute funds from the trust. The primary reason that people create spendthrift trusts is to protect their assets from creditors. There are specific laws about how these trusts must be created and administered, so talk to a lawyer before proceeding. Usually, you can designate how a trustee will distribute assets left in the trust when you die.

Asset Protection Trust

Assets are put into an asset protection trust to protect them from bankruptcy, divorce and creditors. When you create this type of trust, you are generally transferring ownership of the assets to the trustee, which is a move that you should do only after receiving expert advice. In exchange for giving up title to the assets, you get some financial protection and may get some tax benefits. Realize that a creditor may take this action to court if you create the trust shortly before declaring bankruptcy.

Life Insurance Trust

Creating a life insurance trust makes sense for many people when they are estate planning because of the estate tax benefits. With this type of trust, you are naming the trust as the owner of your life insurance policy. Yet, you do not fund the trust when you create it. Instead, the money from your life insurance policy funds at the time of your death. Then, one or more beneficiaries can receive money from the trust. These trusts tend to be more complicated to set up than others, so consult with a probate attorney in Las Vegas.

Qualified Terminable Interest Property (QTIP) Trust

Suppose you have children from a previous marriage and are remarried. In that case, a qualified terminable interest property (QTIP) trust may be the perfect solution to ensure that your current wife and children are cared for at the time of your death. Assets in this trust go to the surviving spouse as long as she is alive, but they revert to the trust after the spouse’s death. At that time, the assets can then be given to your children. It is vital to name a trustee who is comfortable working with your current spouse and children from your previous marriage.

How to Choose a Probate Attorney

There are many probate attornies in Las Vegas, but you want one that will pay attention to detail because your trust will become especially essential after you die, so you do not want any misunderstandings. Additionally, you want an attorney who will take the time to understand your unique circumstances. The lawyer should be able to guide you through the decision-making process by using clear communication and never pressure you into signing anything that you do not understand.

With so many choices for Nevada residents, working with an experienced probate lawyer is imperative. Contact Sean Tanko as he has over 20 years of experience setting up trusts.