Some parents in Nevada who are creating an estate plan might be concerned about whether their adult children will be able to handle a sudden influx of wealth. It is not uncommon to hear stories about lottery winners or other people who mismanage their money and end up filing for bankruptcy, and parents may wonder how they can prevent this from happening to their children.
For anyone considering estate planning in Nevada, two of the main options are wills and trusts. While there are some individuals who believe it's better to opt for a trust than a will, the fact is that either one of these estate planning methods can work well. A will is a document that typically includes instructions about property and asset division among designated heirs. One can also use a will to name a personal representative to handle an individual's final affairs. Preferred guardians for children can be named as well.
Many estate planners in Nevada want to take advantage of the higher level of flexibility and autonomy offered by trusts. However, they may have questions about how trust instruments work, especially where they differ from wills. For example, some may wonder if they can create a second trust and if it will affect the first trust they created. On the other hand, a new will usually explicitly revokes prior wills; it's only possible to have one valid will at a time.
Over the next several decades, roughly $30 trillion in wealth will be transferred from grandparents and parents to their children and grandchildren. Therefore, it's important for Nevada residents to plan how the assets will be transferred. This may be made easier through the use of a life insurance policy. These policies can provide cash that might be needed immediately following a person's death.
There may be times in which a Nevada estate owner wants to disinherit a family member. While disinheriting is possible, the process should be done with the assistance of a professional. Otherwise, the disinherited person may be able to challenge the move and have it overturned. Generally speaking, it is easier to disinherit someone using a trust instead of a will. This is partially because the trust is a private document whereas a will is made public.
Some Nevada residents may be familiar with couples who were married for a long time and then died within a few weeks or months of one another. This is sometimes known as "broken-heart syndrome," and it may have played a part in George H.W. Bush passing away just over seven months after his wife Barbara Bush died. In addition to the emotional toll, these deaths in rapid succession can cause problems with estate plans.
Many people in Nevada create trusts as part of a comprehensive estate plan to leave their assets to beneficiaries. An important part of this process is putting assets into the trust.
A trust beneficiary is allowed to receive a copy of the trust document that he or she is named in. This is true in Nevada and most other states. At a minimum, the beneficiary is entitled to receive information pertaining to his or her inheritance contained within that document. The first step in resolving a trust dispute is for the beneficiary to contact the trustee about the problem.
Some people in Nevada who are creating an estate plan might be interested in creating what is known as a silent trust. This differs from most other types of trusts because in a silent trust, a trustee does not have the same obligations to keep beneficiaries informed.
Nevada residents who want to develop a successful estate plan should make sure that the plan efficiently transfers their wealth to their heirs while reducing any taxes that may be assessed. One particular legal device that can help accomplish this is an irrevocable trust.