PB Law Blog... Trusts and Stuff

Monday, November 20, 2017

Things to be Thankful For: Giving Generously in Your Estate Plan

Things to be Thankful For: Giving Generously in Your Estate Plan

Since Thanksgiving is just around the corner, we decided to focus on being generous and the individuals your Estate Plan can help after you are gone. 

So, here it is: you spend much time, energy and money in setting up a solid estate; an estate that protects your assets, provides for your family and maybe holds and manages your business/es.  What about after you pass?  Depending on who your beneficiaries are and how you set up your trust, your estate can carry on your legacy by the act of giving.   There are many ways to give from your estate after you pass. We are going to break down a few options and explain why these may work for your estate. 



What it does


Charitable Trust

Irrevocable Trusts giving some (or all) of the Grantor’s residual money to a specific charity. The Grantor may set up the Charitable Trust as paying the Charity before the beneficiaries or paying a residual amount to the charity after the beneficiaries are paid.

Setting up this type of Trust can be for philanthropic and/or tax purposes. Donations made to the Trust may be tax deductible and can ensure that the Grantor’s wishes are carried out. This type of Trust can appeal to wealthy and middle-income individuals (ask your estate attorney on how to achieve this with your financial situation)

Special Needs Trust

Established to care for an individual who has physical or mental special needs. Either set up as a General Support Trust (acting as the primary source of income for the individual) or a Supplemental Needs Trust (acting as the secondary source of income for the individual), this type of Trust can provide care to loved ones after the Grantor is gone. Usually, a Trustee or guardian will oversee the administration of the Trust for the sole benefit of the individual in need.

Providing care to loved ones who are unable to care for themselves is a common concern of many Grantors. Usually, Grantors wish to maximize the benefit to the individual through government-assisted programs, or they don’t have the financial capacity to support the individual 100%, and therefore a Supplemental Needs Trust is preferable.

Children’s Trust (Minor’s Trust)

When you want to leave assets to a younger person (typically under the age of 18 or 21). This type of Trust bequeaths certain assets to a minor, but because minors cannot legally own property, keeps the assets in the trust until a designated age either set by the Grantor or as allowed by state law. The Trustee will oversee the assets and may provide the minors with care from the Trust if the Grantor so provided.

In the event that something happens to the Grantor unexpectedly, this type of Trust can ensure that the Grantor’s children will receive the assets eventually, even though they cannot possess them at the time of the Grantor’s death. Usually, the Grantor’s Revocable Living Trust will pour over into the Children’s Trust. If there are multiple children, the Grantor may establish a Children’s Trust for each child. If you have small children, this is a great way to give to your children while providing you with peace of mind. Children’s Trusts are not taxable until the gift is disbursed to the child. Additionally, the gift tax is exempted if the gift is valued lower than $14k per year per recipient.


The most obvious way to give is to name beneficiaries within your existing Trust. If it is a Revocable Living Trust, the Grantor can add, change, remove beneficiaries and specify a percentage, fraction, or specific gifts the beneficiary will receive from the Trust. In an Irrevocable Trust, it is much harder to amend the beneficiary, but it can be done (either by consent of all parties or court approval). The Grantor can set up the terms of the gift as they wish, and the Trustee and/or Trust Distributor makes sure that the gift is given per the provisions within the Trust.

This type of gift allows for the Grantor to give to whomever they want without worrying about the administration or setting up alternative trusts. This is ideal for family or friends that are not dependents. This type of gift is exempt from state Inheritance and Estate Tax in Nevada and may only be subject to Inheritance Tax if the gift is over $5.49 million per individual. Therefore, in Nevada a Grantor may leave up to $5.49 million dollars to a beneficiary without imposing tax liability on to the beneficiary.


Now that we have compared some examples of leaving a generous estate, you may be wondering how, when and where do you set this up.  All estate plans should be set up by a reputable and licensed estate planning attorney who can take your wishes and apply them to the best trust planning option for you and your family.  Communicating your family dynamics, who your dependents are, who could become a dependent and what you want overall for your family is imperative in establishing an estate plan.  Giving generously is a motto that is widely endorsed and appreciated, and ensuring that your generosity is given with the greatest of deference in planning for your estate is essential.

With that in mind, everyone at Phillips Ballenger wishes you a safe and a very happy Thanksgiving!!


-by Laura Bown (Law Clerk/JD Candidate, 2018, Boyd School of Law, UNLV) with Tiffany Ballenger Floyd, Esq. (Nevada & California Estate Planning Attorney), © 2017, Phillips Ballenger, PLLC

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