Living Trusts

A living trust is also a document that details how you would like your estate and affairs handled after your death. However, unlike a will, a living trust does not require your heirs to submit to the probate process. The trustee of the trust, usually the person or company identified in the trust to handle the affairs of the trust, is responsible for managing the trust estate until the trust terminates pursuant to the terms of the trust. The terms of the living trust usually describe how one's assets are to be distributed. Further, this distribution can occur over many years if you so desire, thereby allowing you to retain a measure of control over your assets even after your death. You may also be able to place other restrictions over your assets, which can help to protect the assets from the creditors of your heirs or to ensure that your goals and objectives are met. Moreover, since your living trust is not submitted to a court, the terms of your living trust are kept out of the public domain.

Which Do You Need?

The determination of whether to choose a living trust or a will depends on a number of factors. In general, in Nevada, the main factor to consider is the value of an estate. For persons who do not own any real property and have an estate worth less than $20,000.00, the entanglement of the probate process is minimal. In such a scenario, only an Affidavit of Entitlement is needed to transfer assets. For people in this category, it is usually recommended to have a simple will. For those who own real property or have an estate worth more than $20,000.00, probate can get more complicated and costly. In these situations, it is usually advantageous to have a living trust. While it is usually less expensive to prepare a will than it is to create a living trust, this minimal savings is more than offset by the expense and burden of probate. However, as with most things that deal with your legal rights, your unique present and future state of affairs will dictate how you should best plan your estate.

In general, the main advantages of having a living trust instead of just a simple will are as follows:

1. Minimize Probate - If properly funded, probate can be minimized, if not entirely avoided, by using a living trust.
2. Tax Planning - There are limits on the exemptions one can claim from your estate having to pay Federal Estate Taxes.* For married couples, proper use of certain clauses in your living trusts can maximize the benefits of these exemptions, thereby saving more money for your heirs. *For 2007 & 2008, the annual Federal Estate Tax Exemption is $2,000,000.00 per person. It is $3,500,000.00 per person for 2009. The exemption is unlimited for 2010. However, unless Congress adopts new limits, the Federal Estate Tax Exemption in 2011 will only be $1,000,000.00 per person.)
3. Protect Assets - While the creator(s) of a living trust generally will not be able to protect their assets from their own creditors simply by placing their assets into a living trust, with proper drafting, you can protect the assets included in the living trust from the creditors of your heirs.
4. Special Circumstances - One of the better features of living trusts are their flexibility. You can prepare a living trust to accommodate all types of unique situations, such as the special needs of an heir, desire to regulate the manner in which distributions are made to an heir, etc. . .