Individuals in Nevada who are estate planning may wonder about the role of trustees and how they will handle debts and expenses. The trustee must take responsibility for valuing all assets as soon as possible after an individual’s death as well as for assessing all debts. A trustee also acts as a fiduciary and may be a beneficiary as well.
The trustee must act according to the instructions of the trust, but it is also necessary to prioritize debts and determine the ones that should be paid the most promptly. If there is going to be a delay in paying any of the bills, the trustee has the responsibility of notifying the creditor. Insurance and real estate taxes are some of the types of bills that may need to be paid immediately because not doing so could do damage to the estate for which the trustee might be held responsible.
A trustee is also required to file any necessary tax returns. The estate requires a new tax identification number since it is considered a separate entity from the deceased individual and from the trustee.
Finances may become complex, and a trustee may wish to consult an attorney at this stage. For example, an individual may need to decide how to best time distributions to save money. Trustees are not necessarily individuals with a great deal of financial experience, so they may work with another professional in order to make these decisions.
Furthermore, an individual who is estate planning may wish to work with an attorney to establish a trust, write a will and prepare other documents. An attorney may ensure that the preparation is done correctly and might be able to advise the individual on various strategies for designing the trust.
Source: American Bar Association , “Guidelines for Individual Executors & Trustees“, December 03, 2014