There are two types of trusts—revocable and irrevocable. A revocable trust, also known as a “living trust,” allows you to transfer assets in and out while you are alive, and a trustee can manage and preserve the funds after your death until they are gone.
Revocable trusts are flexible and can be altered if needed, while irrevocable trusts must undergo a complicated legal process to modify any terms. Contact our firm better to understand the difference between revocable and irrevocable trusts.
How Does a Trust End?
A trust can be terminated in a few different ways. Early termination of trust might make sense if the assets are worth less than $100,000, a trustee needs to be removed, or the trust value is less than the administration fees.
Other reasons include the death of a beneficiary, life events such as marriage or divorce, or an intervention by the court.
Another way a trust might end is through natural causes. A trust is meant to hold and manage assets until they’re gone. If all assets have been distributed or funds have run out, there is no reason to pay the fees to keep it going.
Can You Dissolve an Irrevocable Trust?
Once an irrevocable trust has been created in Nevada, you cannot change or dissolve it unless certain circumstances allow it. The purpose of an irrevocable trust is to move assets into it that you don’t mind losing control over. It’s a tax-efficient way to transfer your accumulated wealth to your beneficiaries or heirs and protect it from creditors.
There are limited exceptions for reversing or dissolving an irrevocable trust, and an attorney with experience in trusts is best suited to help you through this process. For instance, you might be able to make this change if you get all beneficiaries to agree or you sell all of the assets in the trust.
An irrevocable trust is a viable asset protection strategy for the right situation. There are no estate taxes, they make for easy charity donations, and you can avoid probate while protecting your money and property from creditors.
Why Would You End a Trust?
A trust allows control over an estate. If a trust no longer serves its purpose or if it requires dramatic changes due to life events, it might make sense to dissolve it and start fresh. For example, divorce is one reason the grantor might decide to end a trust or if the provisions need to be amended for other reasons.
The first step in dissolving a revocable trust is removing all of the assets from it. As this is a flexible trust option, there typically aren’t any legal loopholes to jump through. Trusts can also end if there are no more assets or not enough assets in the trust. This is also an excellent reason to dissolve it.
Speak with our attorneys to learn more about trusts and the dissolution process if this is a need for you and your family right now. Call us today: (702) 553-3266.