When considering estate planning, there are a number of options that Nevada residents may consider. Among these is the option of establishing a trust. Through a trust, one may be able to control how their money is spent even after they pass away. Understanding trust administration, though, is vital to creating a trust that could very well last for generations to come.
First, there are two primary kinds of trusts: a living trust and a testamentary trust. As the names suggest, the former is funded during one's lifetime while the latter is created under a last will and testament. Yet whichever type of trust one creates, it's important to take the time to carefully appoint a trustee.
The trustee is the person who manages the trust, and it can be anyone ranging from a spouse to a bank or other institution. But depending upon who is named as the trustee, the consequences can vary wildly. For example, if the trustee and the beneficiary of a testamentary trust are one in the same, then the IRS may include the assets in the gross estates of the beneficiary for the purposes of estate taxation. Likewise, a living trust that appoints oneself as trustee could have substantial tax consequences. It may thus be far better to appoint an independent trustee in many cases.
Moreover, the trustee should be someone who is honest. The trust itself could last for decades and even across generations, so appointing someone who will diligently maintain the trust is important. The trustee should also ideally be someone with investment experience, and it may not always be advisable to choose a close family member due to familial conflicts. Of course, trust administration can become very complicated, and many Nevada residents may well consider seeking advice.
Source: Appleton Post Crescent, " Terrence Jack column: Pick estate trustee ahead of time," Terrence Jack, March 31, 2012