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Avoiding trust mistakes in Nevada

When people create trust accounts in Nevada, they normally do so with specific purposes in mind. There are certain common errors about which people should be aware so they do not make them, thereby subverting the purposes they had for starting the trust to begin with.

One of the most common trust mistakes a person might make is trying to use a do-it-yourself trust planning tool. It is easy to make mistakes by using these, and if a trust is set up incorrectly, it may later be disregarded. Assets may then be sent to probate, with its associated expenses and publicity, rather than passing confidentially to intended beneficiaries through the trust.

Other common errors include setting up a trust to benefit a child too early. A child may not be sufficiently mature to receive a large amount in a lump sum when they reach age 18 or 21, for example. Another problem can occur if people fail to update the trust to reflect changed life circumstances or fail to fund it after it has been established. A common misconception is that all assets will pass according to a will or trust. Life insurance policies, retirement accounts and others will have their own separately named beneficiaries and will pass to the named beneficiary listed in the policy or on the account. It is thus important to review and update beneficiaries to those policies and accounts as needed.

It is a good idea for people to routinely review their assets, beneficiaries, wills and trusts to make certain everything is current, accurate and up-to-date. Scheduling regular reviews of all such estate plans with an estate planning attorney may also be beneficial. By doing so, people might avoid having their relatives litigate against one another due to unintended consequences caused by omissions or errors.

Source: CNBC, "Trust bust: Steer clear of the 8 biggest estate-planning mistakes", Barry Glassman, January 03, 2015

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