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Why Trusts Are Essential for Estate Planning

Wed Jun 12th, by General |

When it comes to safeguarding your assets and ensuring they are distributed according to your wishes, establishing a trust can be a crucial step in your estate planning. In this article, we will explore what a trust is, the different types available, and the numerous benefits of having one. If you’re considering estate planning in Nevada, understanding trusts is essential.

What is a Trust?

A trust is a legal arrangement where one party, known as the trustee, holds and manages assets on behalf of another party, the beneficiary. The person who creates the trust is referred to as the grantor or settlor. Trusts are designed to manage and protect assets, ensuring they are distributed according to the grantor’s wishes.

Types of Trusts

There are several types of trusts, each serving different purposes. Here are some of the most common:

  1. Revocable Living Trust: This is the most commonly used tool in an estate planner’s arsenal. This trust can be altered or revoked by the grantor during their lifetime. It helps in managing assets and avoiding probate, which is the legal process of distributing a deceased person’s estate. It offers versatility, control, protection and privacy. The grantor transfers their assets into the trust, including real estate and business interests, but maintains full control and retains the benefits of the assets while still living.

  2. Irrevocable Trust: Once established, this trust cannot be altered or revoked. It is often used for tax planning and protecting assets from creditors. The grantor loses control of the assets placed in an irrevocable trust, and cannot be a beneficiary. However, there are limited ways the grantor can benefit from this trust while still living. For example, the grantor could be entitled to live in a house that was placed in the trust for the remainder of their lifetime. 

  3. Testamentary Trust: Created through a will, this trust only takes effect after the grantor’s death. It is useful for managing how and when beneficiaries receive their inheritance.

  4. Special Needs Trust: Designed to support both child and adult beneficiaries with disabilities without jeopardizing their eligibility for government assistance programs.

  5. Charitable Trust: This trust benefits a charitable organization and can provide tax benefits to the grantor.

Benefits of Having a Trust

1. Avoiding Probate

One of the primary advantages of a trust is that it allows your estate to bypass the probate process. Probate is simply the process whereby a court decides how your property will get distributed after your death. Probate is lengthy, expensive, and public. It can lead to disharmony within your family, and your assets may end up with someone you did not intend. By placing assets in a trust, you ensure they are transferred directly to your beneficiaries without court intervention.

2. Privacy

Since trusts do not go through probate, the details of your estate remain private. This is a significant benefit for those who wish to keep their financial matters confidential.

3. Control Over Asset Distribution

A trust allows you to specify precisely how and when your assets are distributed to your beneficiaries. For example, you can set conditions that prevent your children from acquiring the assets until certain milestones in their lives are met, such as reaching a certain age, graduating from college, getting married, etc.

4. Protection from Creditors

Assets held in an irrevocable trust are typically protected from creditors. This means that if you or your beneficiaries face legal judgments, the assets within the trust are generally safe.

5. Tax Benefits

Certain types of trusts can offer significant tax advantages. For instance, irrevocable trusts can help reduce estate taxes by removing assets from your taxable estate.

6. Support for Dependents

Trusts can ensure that dependents, such as minor children or family members with special needs, are provided for financially. This is crucial for their well-being and security.

Why You Need a Trust in Nevada

Nevada offers some unique advantages for establishing trusts, making it an attractive option for both residents and non-residents:

  • Asset Protection: Nevada is one of the minority of states that has strong debtor-friendly laws protecting assets held in self-settled spendthrift trusts (aka domestic asset protection trusts), which can shield them from creditors.
  • Tax Benefits: Nevada does not impose state income tax or estate tax, making it a favorable jurisdiction for trust planning.
  • Modern Trust Laws: Nevada’s trust laws are considered some of the most progressive in the country, offering flexibility and robust protection for trustees and beneficiaries.


Creating a trust is a strategic move in estate planning, providing numerous benefits from avoiding probate to protecting your assets and ensuring they are distributed according to your wishes. With Nevada’s advantageous trust laws, setting up a trust can offer even greater benefits. If you are considering establishing a trust, consulting with Boley and AlDabbagh Ltd., an experienced Nevada-based law firm, can help you navigate the complexities and ensure your estate is well-protected.

For personalized advice and assistance in setting up a trust, contact our team of knowledgeable attorneys today. We are dedicated to helping you secure your legacy and provide for your loved ones.