If you own your home, it should be in a trust. It’s that simple. Otherwise, your loved ones may be faced with the expensive, slow, and uncertain Nevada probate process. Almost every day we have tough conversations with clients about the limited options available to them because a parent or loved one failed to create a trust. We do everything we can to make probate prompt and economical, but it often costs ten times or more what it would cost to set up a trust.
There are many advantages to setting up a trust in Nevada. There are also different kinds of trusts, each with its own advantages. This makes Nevada an attractive jurisdiction for setting up a trust for both Nevada residents and individuals who live elsewhere. The state’s trust statutes can provide meaningful advantages in areas such as administration, taxation, multigenerational wealth planning, privacy and the use of modern technology.
Potential advantages include the following:
Directed Trusts
Nevada law allows specific responsibilities traditionally handled by a trustee to be assigned to other designated parties. Depending on the trust’s terms, separate advisers may oversee investments, approve distributions, address tax matters or perform other defined functions. This structure can give families greater control while allowing each aspect of the trust to be managed by an individual or institution with relevant expertise. Nevada has played a prominent role in the development of directed-trust legislation.
Potential Fiduciary Income-Tax Savings
Some states impose income taxes on a trust’s accumulated ordinary income and realized capital gains. Those taxes can materially reduce the assets available for future beneficiaries, particularly when a trust is intended to continue for multiple generations. Nevada does not impose an individual state income tax, which may create tax-planning opportunities for properly structured and administered trusts. Any potential savings will depend on factors such as the trust’s terms, its administration, the residence of its beneficiaries and the sources of its income.
Long-Term Dynasty Trusts
Nevada permits certain trusts to remain in existence for as long as 365 years. This extended duration can help individuals preserve and manage family wealth for children, grandchildren and later generations. A dynasty trust may also provide a structured way to protect, invest and distribute assets over an exceptionally long period.
Electronic Trust and Estate Documents
Nevada law recognizes certain electronic trust and estate-planning documents. Its statutory framework incorporates principles from the Nevada Uniform Electronic Transactions Act and establishes requirements governing electronic records and signatures. Depending on the document involved, validation may require identity-authentication technology, notarization or attesting witnesses. Permitted authentication methods may include biometric identification, voice or facial recognition, video recording or a digitized signature.
Confidential Trusts
A trust creator may not want beneficiaries to receive immediate information about a trust or their interests in it. Nevada law allows a trust instrument to direct the trustee to delay the disclosure of certain information for a specified period. This flexibility can support privacy, protect younger or financially inexperienced beneficiaries and help the trust creator control when sensitive financial information is disclosed.
Probate Court Avoidance
A will identifies who should receive your property after your death, but it does not generally prevent probate. Assets held solely in your name that lack a valid beneficiary designation, pay-on-death instruction or other non-probate transfer mechanism may still need to be administered through the probate court.
A properly funded revocable living trust works differently. Property titled in the trust’s name can ordinarily be managed and distributed by the successor trustee without becoming part of the probate estate. In addition to preserving privacy and potentially reducing the cost and delay associated with probate, this arrangement can provide greater continuity in the management of investments and other trust property after your death.
Protection for Your Beneficiaries
A Nevada revocable living trust may be drafted to provide certain protections for beneficiaries after the trust creator’s death. Although the trust remains amendable or revocable during the settlor’s lifetime, it will generally become irrevocable upon the settlor’s death. Its assets can then remain in trust rather than being distributed to beneficiaries outright.
Nevada allows qualifying trusts to continue for as long as 365 years, creating opportunities for long-term wealth management across multiple generations. When properly structured, a continuing trust may help limit the ability of a beneficiary’s creditors to reach trust property. This protection can be especially valuable if a beneficiary experiences bankruptcy, divorce or other financial difficulties.
These protections generally do not apply to the person who establishes a standard revocable living trust. Because the settlor retains control over the trust during life, the settlor’s creditors can typically reach its assets just as they could reach property owned directly by the settlor.
Tax Planning
Nevada trusts can incorporate provisions designed to take advantage of available federal estate-tax and generation-skipping transfer tax exemptions. Depending on the size of the estate, the trust’s structure and the applicable tax laws, this planning may reduce the transfer taxes imposed as wealth passes to children, grandchildren and later generations.
Keeping Assets With Your Intended Beneficiaries
A revocable living trust gives you considerable control over how and when beneficiaries receive their inheritances. Instead of requiring an immediate outright distribution, the trust can establish conditions, schedules or standards governing access to the assets.
These provisions may be useful when a beneficiary is financially inexperienced, has difficulty managing money or is likely to spend an inheritance too quickly. Trust restrictions can also play an important role in blended-family planning. For example, a trust may provide financial support for a surviving spouse while preserving the remaining property for the deceased settlor’s children.
Why You Still Need a Will
Creating a revocable living trust does not eliminate the need for a will. The trust can control only the assets that have been properly transferred to it or otherwise directed to it. Retitling property in the trust’s name is commonly known as “funding” the trust.
Assets that remain solely in your name at death and lack another transfer arrangement may still become part of your probate estate. A pour-over will directs those remaining assets into the revocable living trust so they can ultimately be distributed according to the trust’s instructions. Although the assets may first need to pass through probate, the pour-over will helps ensure that the trust remains the central document governing their final disposition.
Should You Put Your Home in a Trust if You Aren’t Sure That You Will Live There Forever?
Yes. Once your trust is established, properties can be moved in or out of it as your circumstances change. A home held in a trust can be sold just like any other home. When you purchase a new home, you can request that the title company record it directly into your existing trust. Our office is also happy to assist in ensuring that any real estate you acquire is properly placed in the trust.
Will You Lose Control of Your Property if You Put it in a Trust?
No. We draft trusts so that they are revocable during your life. You maintain total control. You can sell the home, refinance it, or move it out of the trust at any time. The trust only changes how the property is titled, not how you live in or manage your home.
Will it Affect Your Mortgage or Loan if You Put Your Home in a Trust?
Yes, you can place a mortgaged home in a trust, and doing so will not affect your mortgage. Lenders are generally prohibited from altering the terms of your loan based on a transfer of property into a trust.
Isn’t a Trust Just for Wealthy People?
No. If you own a home, a trust is worth it. It is tool to save your family from probate, and to ensure that your wishes are carried out when you die.
Who Should You Select as the Trustee of Your Trust?
Selecting your trustee is one of the most important decisions you will make in creating an estate plan. Your trustee should be someone with good financial management skills, scrupulous honesty, and strong communication skills — someone you trust completely and who you know will take the proper steps when the time comes. We are always available to assist trustees who are administering trusts.
Who Should You Choose as the Beneficiaries of Your Trust?
That is entirely up to you. Most people choose close family members such as children, siblings, and/or grandchildren, but some people designate charities or other organizations. We are happy to discuss the options with you and help structure the trust to reflect your wishes.
Do You Have to Do Anything Else After You Form a Trust?
Not unless you want to. A trust can sit for decades and only become operative after the person who formed it passed. However, if you have significant life changes such as a marriage, new home, new child, divorce, or loved one passing, you should consult with our attorneys about making sure your trust fits your circumstances.
What Happens if You Are Incapacitated and Unable to Make Decisions for Yourself?
A will only takes effect after death. That’s why every estate plan we create also includes a provision for incapacity that allows a trusted person to manage your affairs during the time that you are unable to.
Contact Our Henderson Trust Attorneys
Our family-run law firm focuses on blending experience with a compassionate approach to client service. Call (702) 978-8890 to find out which type of trust is right for your situation and get started.
