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Creating an estate plan is never an easy subject, and for some, dealing with death in such a cut and dry manner can be quite jarring. Although somewhat uncomfortable, creating an estate plan can help facilitate a smooth posthumous division of your assets that’s in line with your wishes. One key part of an estate plan is setting up a trust, and knowing what assets to include in this trust is crucial for creating a sound plan for your surviving relatives after your passing.
A trust, typically referred to as a living trust, is a crucial part of an estate plan that allows you to delineate ownership of your assets to your beneficiaries. As you get older, you have the option to change and remove any assets from this trust, creating a trust fund. Depending on the amount of money needed to maintain the trust, as well as the value of the assets included in the trust fund, the total value of the trust can change over time.
As the grantor, you can decide which assets are delivered to which parties and beneficiaries, as well as create a system of “trustees” in charge of dividing these assets if you are incapable of acting in your interest due to injury or illness. In Nevada, a living trust begins with creating a list of assets either owned by you, as an individual trust, or shared between you and your spouse, creating shared trust. Afterward, you must choose a trustee to oversee the assets included in your trust fund before choosing beneficiaries. Finally, after naming all relevant and important parties, you can create and notarize your trust document.
Although somewhat similar in nature, a will and a trust are very different. Both can be included in your overall estate plan, but each has a certain set of duties and legal requirements. A will outlines the specific ways you would like your affairs to be handled after your passing, including asset distribution.
In contrast, trust creates a system of asset distribution involving a trustee, who inevitably distributes your assets to our chosen beneficiaries if you are unable to. Any assets outlined in both a will and a trust are listed as going to certain people, your beneficiaries, or organizations, businesses, or charities of your choice. Rather than having your assets given to each in the event of your passing, a trustee will oversee the division of your assets.
Trusts are meant to create a system of asset and money division among your living relatives after your passing. Anything from heirlooms to cash can be included in a trust, but some assets should be kept separate from any trust fund agreements. The most important assets to avoid adding to a trust fund include:
Although these are large parts of your financial and material wealth, adding any of these assets into your trust can bring on tax problems and unnecessary work. In most cases, the titles and ownership of these accounts and assets are already outlined in the paperwork attached to them when signing up for the policy, such as a life insurance plan, so designating that the owner should be your trust ends up being more of a hassle than it is a benefit.
Creating a living trust is crucial for delineating which assets you would like divided amongst your living relatives according to your wishes. Although all of your assets are to be passed down, determining which assets should be included in your trust and which should not is an important part of creating a trust. Some assets, due to the circumstances surrounding their use and implication, can be a hassle to include in your trust, causing you unnecessary stress when putting together an estate plan, and knowing which assets to avoid is crucial for a solid trust fund.
Assembling an estate plan can be stressful, but with the help of a competent legal team, creating a strong, financially sound trust is possible. Having an attorney look over any legal documents before submitting and ratifying them is ideal for creating sound paperwork, especially in situations where you have to be sure of your wishes, such as in an estate plan. At the law firm of Ken R. Ashworth & Associates, our team of estate planning attorneys can provide the legal advice needed to properly plan and solidify your living trust, helping you benefit your family after your passing. For more information about our services, including our service areas, visit our website and contact us today.