What are the Nevada requirements for using a trust as a life insurance beneficiary?

Nevada allows trusts to be named as life insurance beneficiaries, a common estate planning strategy. Understanding the requirements ensures the trust is properly structured to receive and administer the death benefit as intended.

Any valid Nevada trust can be named as beneficiary. The trust must be in existence (or at least validly created to come into existence) at the time the insured passes. If the named trust doesn't exist or has been revoked, proceeds revert to the estate, which can delay distribution and create probate complications.

For irrevocable life insurance trusts (ILITs), the trust must be properly drafted by a Nevada attorney, the insured cannot be the trustee, and the trust must be funded—meaning the policy is owned by the trust or assigned to it properly. For proceeds to be excluded from the taxable estate, the insured must not retain any incidents of ownership in the policy.

Nevada's Uniform Trust Code (NRS Chapter 163) governs trust administration, including trusts receiving life insurance proceeds. Nevada has favorable trust laws that attract trust-based planning.

When naming a trust as beneficiary, use the full legal name of the trust (as stated in the trust document), the trustee's name, and the date the trust was established: for example, "The Smith Family Living Trust, dated January 1, 2020, John Smith, Trustee."

Coordinating life insurance beneficiary designations with Nevada estate attorneys ensures your insurance planning and estate plan work together as intended.