A trust is a relatively common estate planning tool that individuals in Nevada and throughout the country can use. Their structure will largely determine how they are taxed and how they are controlled. It will also play a role in determining if assets in the trust are protected from creditor claims. Generally speaking, a trust can be defined as revocable or irrevocable. A revocable trust can be amended or terminated at any time by the person who has created it.
This means that the settlor has control over the assets, which may mean that they can used to settle creditor claims. With an irrevocable trust, a trustee is appointed to oversee asset distribution and tax payments. It also offers stronger protection against creditor claims. Trusts may also be referred to as fixed or discretionary. In a fixed trust, funds are distributed at predetermined times whereas a trustee has more leeway to make distributions in a discretionary trust.
Furthermore, discretionary trusts may offer protection against beneficiary claims. It is important to note that claims made against assets before they are put in the trust are generally still valid even after a transfer occurs. It may be a good idea to consult with an attorney to determine which trust best meets an individual’s needs.
The use of a living trust or other type of trust document may help individuals provide for themselves or others while alive and after they die. A legal representative can help a person decide which type of trust to create. Furthermore, the attorney may help an individual review trust documents after they have been created. If necessary, they may be altered or revoked to account for life events or changes to the tax code.