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Trust Department

Living Trusts

Trusts and wills are two means of passing upon death.

What is a trust? - A trust is an agreement between a grantor and the trustee. In the trust agreement, the grantor can tell the trustee to manage a distribute the trust assets. For example, the grantor can put cash, stocks, bonds, real estate or other assets in the trust. The trust agreement tells the trustee what to do with the trust assets. This only applies to the assets which are held in the trust.

What are the requirements for a trust? - The Grantor must have:

What is a living trust? - A living trust created during the Grantor's lifetime. It may also be called a "Grantor Trust", a "Revocable Trust" or an "Inter Vivos Trust".

Can the grantor change their trust? - A revocable trust means that the grantor can change their mind - and their trust. The Grantor can revoke the trust or amend it. This means they can cancel the trust and get their property back. The Grantor can also change the instructions contained in the trust agreement.

The Grantor can also make an irrevocable trust, one in which the Grantor cannot change their mind. Once the Grantor sets up an irrevocable trust, they can never change it. The Grantor of an irrevocable trust cannot cancel the trust or change the instructions.

What are the advantages of a living trust or will?

Privacy. A living trust is not usually filed in court to become a public record. However, in many cases, an inventory must be filled with a court upon death. The inventory will at least show the size of the trust and may be required to list the assets. The inventory is used for inheritance tax determination and is a public record. The amounts received by each beneficiary may also be a public record.

Avoid Probate. Assets in a living trust usually avoid probate at death. However, Nebraska has the Uniform Probate Code which considerable simplified probate. Remember, the assets must have been transferred into the living trust to avoid probate.

Disability. A trustee can continue to manage trust assets (those actually transferred into the trust) if the Grantor becomes disabled without the court appointment of a conservator. However, a durable power of attorney may provide the same benefits.

Asset Management. If the trustee is an expert, professional management of the trust assets may be available for a fee.

What happens to property not placed into the trust? - If the ownership of all the property is not transferred to the living trust, it remains subject to the normal rules for transfer of property at death and might be subject to probate.

Can a trust be put into a Will? - Yes, a trust can be created under a Will. This is called a "Testament Trust".

Can a living trust be a beneficiary under a Will, life insurance policy, annuity or pension? - A living trust may be named as a beneficiary of a Will. In most states, a living trust can be a beneficiary of a life insurance policy or annuity. A living trust can also be the beneficiary of a pension plan or other employee benefit plan if the spouse dies before the grantor. If the spouse is living at the death of the grantor, federal law requires the spouse to be the beneficiary of the pension plan or any other employee retirement plan, unless the spouse agrees in writing on a special notarized form.

Can a trust be contested? - Yes, it is possible to contest a trust. With a trust, the court may require all of the beneficiaries to be each named as parties to the lawsuit.

Will a living trust save on taxes? - Using a trust instead of a Will does not save any taxes. It is not whether a Will or a trust is used which determines taxes saved; it is HOW the Will or trust is used which may save taxes.

Planning for Lifetime

Power of Attorney - Allows for a designed individual to act on your behalf in the handling of your affairs. Nebraska recognizes a "durable" power of attorney, which is effective until death.

Inter Vivos Trust or Living Trust - The Grantor can transfer property into a trust, designate a trustee and direct through the trust document how the trust property may be used. The Grantor may also direct the disposition of any remaining property in the trust upon their death.

Common advantages for using such a trust are:

Guardianship or Conservatorship - Court appointment of a guardian or conservator authorizes an individual to act on the individual's behalf in the handling of personal needs or property management.

Use of Power of Attorney / Inter Vivos trust arrangement can usually avoid the need for a Guardianship or Conservatorship.

Living Will - A "living will" is a document that sets forth wishes in the event an individual is terminally ill.

Planning for Death

Planning for Disposition of Property

Estate Without a Will: Intestacy - Without a Will, property may pass pursuant to the rules established by Nebraska's "intestacy" laws.

Joint Tenancy Property and Other Non-Probate Transfer Arrangements - Transfer of property after death may be controlled by:

Disposition by Will and by Trust Testacy - Disposes of property as the the individual wishes.