Nevada residents who have not developed estate plans may not realize that a sudden death could result in legal proceedings for survivors who must deal with assets and the probate process. A trust is a planning tool, helpful as a supplement or replacement for a will. While it serves a similar purpose to a will, it might allow the estate to avoid probate. A trust involves the transfer of legal ownership from a property owner, also known as the trustor or grantor, to a manager, also known as a trustee. The property is managed on behalf of the beneficiary, an individual who will eventually receive that property.
In the case of a testamentary trust, property is not transferred until after the trustor’s death. Conditions for the receipt of benefits may be imposed, and this type of trust may be included in a will, requiring probate before the trust becomes effective. A living trust, however, may become effective during a trustor’s lifetime. A revocable living trust may be adapted as needed, but an irrevocable living trust involves the trustor giving up rights to make adjustments later. Probate may be avoided as long as most of the trustor’s assets have been transferred to the trust while the trustor is alive.
Trusteeship is important since a trustee is legally accountable for the management of assets that have been placed in a trust. A trustee may be responsible for the distribution of assets based on a trustor’s directions. A trustor may also serve as a trustee while still alive. It is important that a successor be named to assume that responsibility upon the trustor’s death.
The information noted here is general and does not constitute legal advice. Because there are important financial and legal implications and benefits associated with trusts, it may be important to seek legal counsel based on one’s unique situation.
Source: Findlaw, “Trusts: An Overview“, FIndlaw, August 13, 2014