How trusts can be versatile estate planning tools

On Behalf of | Oct 5, 2016 | Trusts

People in Nevada who are making an estate plan may think that a trust is not useful for them if they are not looking for a way to lower their estate tax burden, but trusts can offer a variety of advantages. For example, if a person has a difficult relationship with a child but wants to leave assets to grandchildren, a generation-skipping trust can do this.

A person may choose between a revocable and an irrevocable trust. A revocable trust might initially look more attractive because a person retains control of their assets and can change the trust while this is not possible with an irrevocable trust. However, an irrevocable trust is one way to ensure that creditors cannot access assets.

With a qualified personal residence trust, a person can leave their home to a beneficiary while continuing to live in it for the number of years specified in the trust. Another type of trust, a credit shelter trust, allows a surviving spouse access to assets even after the other spouse dies and the assets pass to the beneficiaries. The assets are not included in the estate of the surviving spouse. This type of trust is less necessary since the government permanently approved portability. Portability refers to the ability of one spouse to use the deceased spouse’s remaining estate tax exemption.

An attorney may be able to assist with trust planning. In some cases, a person might not be aware that they are in a situation in which a trust could be useful. This could range from wanting to protect an asset from a beneficiary’s spouse in case of divorce to ensuring that a person only gets distributions at a certain time to taking care of an incapacitated relative and more.