The primary purposes of a properly funded Revocable Living Trust is to avoid probate. If the Grantor’s real and personal property is properly transferred to the Living Trust, then such property is not subjected to the probate process upon the grantor’s death.
As such, the probate process — of Missouri, Nevada or any other state for that matter — becomes less important, given the fact that the probate process is by-passed by the use of a properly funded Revocable Living Trust.
Stated another way, a properly funded Revocable Living Trust avoids the probate process entirely because the title to the assets are owned by the Trust and can be controlled by the Trustee after the death of the grantor — for every state.
To be clear, there is a difference between a state’s trust laws and its probate system. While some may believe that Nevada has one of the most “friendly” probate systems in the country, Nevada (like all states) must give full faith and credit to the laws of other states with regards to Trusts.
So, if a Trust is prepared in Missouri and the Grantor is a resident of Nevada at the time of his or her death, the state of Nevada is required to recognize the Missouri Trust as valid. Remember, assets properly held in a Revocable Living Trust are not subject to a state’s probate court or system.
It is true that Nevada is quite progressive with regards to its Trust laws. For instance, Nevada has implemented laws that allow for the creation of an Asset Protection Trust. This type of Trust is an Irrevocable Trust, which potentially provides the grantor with the ability to protect certain assets from his or her creditors.
Other states — Ohio, Alaska, Nevada and South Dakota, for example; currently 17 states total — have similar laws that permit the creation of such asset protection trusts.
But again, these Asset Protection Trusts are IRREVOCABLE and the grantor of such a Trust may also be a beneficiary.
With such irrevocable trusts, assuming that the state statutory provisions are carefully met, these types of trust offer protections from the grantor’s creditors. If the grantor properly transfers some portion of his or her property to these types of irrevocable trusts, the assets so contributed to the trust would be protected from the Grantor’s creditors.
These asset protection trusts are governed by state statute. And each state law has different requirements and qualifications for the proper creation of such trusts. But if the Grantor does not fully meet all of the statutory requirements, the asset protection will be lost.
Irrevocable asset protection trusts are of such a nature that, in our opinion, legal advice should be sought when being created.
Standard Legal only offers Revocable Living Trusts. Due to their legally complex nature, we have chosen not to offer self-help documents for Irrevocable Trusts — we believe most people will not properly create then manage such trusts.
Standard Legal’s Revocable Living Trusts are valid and binding in all states. There is no Nevada- or Missouri-specific Revocable Living Trust per se, as our Trust complies with the laws of all states to accomplish the purpose of probate avoidance and to permit the grantor to distribute or control property according to the grantor’s wishes after his or her death.