Having a significant estate can be a blessing but can also have its complications. When one spouse in an affluent couple passes away, it can be challenging to know the best way to handle the remaining assets. While the surviving spouse will typically come to solely own those assets, there may be a matter of asset protection to consider, especially if the Nevada residents wish to maintain those assets for generational use.
Luckily, parties considering this route have a number of options to consider. In particular, creating a credit shelter trust could be of use in some cases. After a spouse’s passing, it is possible that a surviving spouse could face taxation on the remaining assets, but a credit shelter trust could help protect those assets from estate or inheritance taxes by removing the assets from the surviving spouse’s direct control.
The ways in which a trust could add protection include the following:
- Allowing the surviving spouse to act as the beneficiary of the trust without facing the tax implications
- Preventing creditors and other parties from being able to make claims on the assets in the trust
- Allowing the surviving spouse’s heirs to avoid estate tax as well due to the assets being kept out of the taxable estate
Taxes can easily wreak havoc on the remaining assets of a substantial estate, which is why it is often helpful to consider ways to avoid taxes. Trusts in their various forms, including credit shelter trusts, could act as useful asset protection that could benefit the surviving spouse and generations to come. Nevada residents interested in gaining more information on this protection option may wish to discuss it more thoroughly with experienced estate planning attorneys.