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Posted on September 11, 2023 in trust
Nevada’s laws surrounding trusts are innovative and more cutting-edge than most states. Trusts in Nevada come with a myriad of estate planning benefits, and they meet the needs of many Nevadans. Below is an introspective look at the inner workings and resulting advantages of a Nevada trust.
A trust is a legal document that holds the fate of an individual’s assets. It defines the terms under which the grantor’s assets will be distributed upon their death. It names the beneficiaries, the people who will receive the assets of the trust according to the grantor’s wishes. It also names a trustee, the person who will ensure that the assets in the trust are properly distributed and handled according to the terms of the trust when the time comes to do so. One of the most attractive features of a Nevada trust is that it provides the grantor full access to the assets held within the trust until the grantor’s passing while at the same time preventing assets included in the trust from having to go through probate once the grantor dies.
There are 10 primary steps to establishing and successfully carrying out a trust, from initiating the trust to administration of the trust and, finally, termination of the trust.
The Nevada code of laws that regulate, define, and govern trust and trust administration is lengthy and complex. For this reason, it is recommended that anyone who wishes to create a trust enlist the help of a qualified and reputable Nevada estate planning attorney with experience in these types of legal matters so that the grantor can be confident in the validity and legality of the trust documents. It is important that nothing be left to potential misinterpretation and the establishment of the trust to prevent those beneficiaries included in the trust, as well as individuals not included in the trust, from contesting the validity or legal grounds of trust documents. There are many potential grounds that someone could challenge or contest the trust. Some examples of these are listed below.
There are exclusive advantages of establishing a trust in estate planning, and the advantages for Nevada trusts are even more enticing. Below are some of the most common reasons why individuals prefer to establish a trust when estate planning.
A: When a family trust is established, it delineates two things for the grantor. It identifies which family members will receive which assets and when those family members can receive those assets. It also allows the grantor to remain in control and to continue to have access to their assets before their passing.
A: The cost of establishing a trust in Nevada varies from one situation to another and from one attorney to another; however, the average cost ranges from $9,000 to $15,000. Factors that affect this include the size of the trust, as well as other complex and circumstantial details associated with a grantor’s situation. Trustee fees typically average from about 1% to 2% of the trust’s value. The average trustee fee in NV is $2,500.
A: Trusts are not subject to state taxes in Nevada, as Nevada residents are not required to pay state taxes at all. However, trusts are subject to graduated federal tax rates of 10% on trust income up to $2,900, and for trusts between $2,901 and $10,550, a 10% tax will be applied to the first $2,901 and then 24% for any trust income over $2,901. A trust over $10,551 will incur a tax of $2,126 plus 35% of the trust’s income over $10,551. These rates can fluctuate yearly.
A: There are a few primary benefits of establishing a living trust in Nevada. These include the opportunity to distribute your assets to your wishes upon your death or if you become incapacitated without the need for your assets to require being drug through the probate process, which is timely and can get complicated depending on the situation. It also affords the grantor the ability to indicate a timeline for the distribution of assets and allows the grantor to remain in control of the assets in the trust while still living.
If you’re considering a living trust as part of your state planning venture, Ken R. Ashworth & Associates can help you establish a seamless and binding trust that can carry out your financial legacy for generations. Our legal team is well-versed in Nevada laws surrounding trusts and the administration of trusts and can help you efficiently and successfully navigate this process and understand the laws that apply to you. Contact a member of our legal team today so you can know your assets are protected going forward.