Nevada Estate and Trust Attorney

Who Needs a Living Trust?

The question is often asked, “Do I need a living trust?” Some estate planning attorneys tell everyone that they need a trust.  But, whether a revocable living trust is needed or not depends upon a number of factors, such as your estate planning goals, your assets, and who are your intended heirs, to name a few.

Does the Size of the Estate Justify a Trust?

While a living trust forms the basis of many estate plans and is an excellent, flexible estate planning tool, there are situations when a trust may not be needed.  To start with the obvious, if you don’t have assets to put into a trust, there is no need for one.  For example, in Nevada, if your estate consists of a vehicle and other minimal assets worth less than $25,000, when you die a small estate affidavit, also called an affidavit of entitlement, may be used to transfer title to the assets.  No probate needed.

The small estate affidavit may also be used when the estate consists of vehicles registered in the name of the decedent and other assets are worth less than $100,000, if the person entitled to the estate is the surviving spouse.

Are There Other Ways to Avoid Probate?

But if the value of your estate precludes the use of an affidavit of entitlement, and one of your main goals is to avoid probate, a trust should be considered.  By placing title to your assets into a properly drafted revocable living trust, such assets do not pass through the probate process.  Rather, the assets can pass directly to your intended beneficiaries without the headache and expense of probate.

But are there ways to avoid probate without a trust?  The simple answer is “yes.”  But the better question is whether they should be used.  Assets that avoid probate include those things that have beneficiaries designated on them.  For example, life insurance or retirement accounts should have beneficiaries listed.  You can even place beneficiaries on bank or brokerage accounts.  Nevada even allows you to put a beneficiary on real property by using a transfer on death deed.

To explore how to avoid probate without a trust, read my blog post covering that topic.

Considering the Beneficiaries of Your Estate

Another important consideration is who are your intended beneficiaries and how many are there?  Let’s begin with kids.  If you have young children and you and your spouse die, your assets will normally be held by a guardian until the children reach the age of majority.  This is age 18 in Nevada.  Most people are not that excited about an 18 year old receiving hundreds of thousands of dollars to do with as he or she pleases.

Trust Beneficiaries
Naming Beneficiaries of Your Estate Plan

A trust becomes a great vehicle to hold the child’s inheritance until the child reaches a more mature age.  In the meantime, the trustee may use the child’s trust share for his or her schooling, health needs, or support and maintenance.

I’ve also run into situations where the parents have several children, but just placed one or two of the children on the financial accounts as beneficiaries.  The intent is for the one child to then split up the accounts with his siblings as mom and dad wanted.  This is a bad idea for a couple of reasons.

First, you are assuming the order of death.  If the child dies first and there is no other beneficiary on the accounts, they will end up in probate.

Second, even if the child wants to follow through with your wishes and split the financial accounts up among all of the siblings, such a transfer becomes a gift from the child and there may be gift tax consequences.

And third, the child may just decide not to share.  This thwarts your intentions, will create additional animosity among the children, and may lead to expensive litigation.

The easiest way to avoid these potential problems is with a well drafted family trust that clearly spells out your intentions.   You may even consider using a third party trustee to avoid any conflict among the siblings.  This is just a sampling of why a revocable trust should at least be seriously considered when setting up your estate plan.