Nevada residents interested in setting up a trust may realize the importance of making the right choice when choosing the kind of trust fund that suits their needs. The reasons someone sets up a trust fund differ, and understanding the types of trusts and their characteristics is important.
Trusts are a way of making sure that assets are passed on to heirs in a safe, secure and private way. They also, in some instances, confer tax advantages and may even offer some protection from creditors.
There are two types of trusts: revocable and irrevocable. Irrevocable trusts may protect assets from taxes but, by its very nature, such trusts are made not to be changed. Once the trust is set up and once the terms of the trust are defined and a trustee chosen, it is only possible to change anything with the permission of every person involved in the trust. Revocable trusts, on the other hand, may be changed at will.
Estate planners advise individuals setting up a trust that the greater the control the person wants over the trust the less benefits conferred by the trust. For example, an irrevocable trust may be beneficial if the trust will enable someone unable to fend for themselves to be cared for or as a way of protecting assets from creditors. However, trying to hide assets from existing creditors may be considered a fraudulent conveyance. A revocable trust may provide for an easy way of transferring assets to heirs and may prevent an estate from going to probate court.
Setting up a trust may be beneficial, and an attorney might provide information about the types of trusts and which one matches individual needs. An attorney may also help with the planning and logistics of setting up a trust in Nevada.
Source: US News & World Report, “How to Choose Between a Revocable and Irrevocable Trust“, Joanne Cleaver, June 19, 2014