How a trust and a will could complement each other

On Behalf of | Mar 5, 2020 | Trusts

Individuals in Nevada who currently have a will might also benefit from having a trust. A will allows a person to dictate where assets go after he or she passes on. It may also be possible for an individual to name a guardian for a child and take other estate planning actions. However, a trust may be the more efficient tool for those who are looking to leave assets to beneficiaries.

Using a trust may allow an estate to avoid going through probate, which can be a long and costly process. Assets subject to probate generally cannot be distributed until a judge gives his or her blessing to do so. Another advantage of putting assets in a trust is that an individual has more control over how they are distributed. For instance, an individual could stipulate that a beneficiary receives half of an inheritance on a certain date and the other half at some point after that date.

Finally, trusts may be able to help people avoid paying state or federal estate taxes. While the federal exemption is $11.8 million per individual, some states have exemption amounts that are much lower than that. For example, those who live in Massachusetts will likely pay estate taxes if their estates are worth more than $1 million.

The use of a living trust may offer several benefits to individuals during their lifetimes and beyond. For instance, a trustee may manage a person’s affairs if he or she could no longer do so. After passing, the trustee would distribute or manage assets in accordance with the trust creator’s instructions. An attorney may be able to help an individual create a trust or learn more about why creating one might be in his or her best interest.