Nevada residents who have already established one trust may want to create a second one. Unlike with wills, which usually include provisions that stipulate that the most recent will revokes all earlier ones, the creation of a new trust does not cancel out prior ones.
There are situations in which the second trust serves as a restatement and total amendment of the initial trust. However, in these cases, the restatement is not a creation of a new trust.Individuals should carefully consider why they want to create two trusts. If there are assets that have to be distributed beyond the scope of the existing section, the creator of the trust can add a separate provision that specifies the additional distribution.
Having two completely separate trusts can make sense in some situations. The creations of irrevocable life insurance trusts, may be used to hold life insurance policies so that the distributions remain separate from the decedent’s estate. However, the estate tax exemption has dramatically increased, and this means that ILITs are not being used as often as they used to be. To ensure that they are making the right choice by creating an additional trust, people should first determine if they can achieve their goals with just one trust that has the appropriate language. The use of one trust is more likely to be less expensive.
An estate planning attorney may advise clients about what type of trust they should use to accomplish their financial and estate planning goals. When there are beneficiaries who have disabilities, the use of a special needs trust could be advisable, as it wouldn’t jeopardize their eligibility under some government benefit programs.