One of the most crucial decisions within your life plan is determining who will manage the estate when you aren’t around anymore, or are no longer fit to do so. This individual is called the successor trustee.
A large amount of responsibility comes with being nominated as a successor trustee. Because of the complicated procedures, time they’ll need to dedicate, and risks that the trustee will assume, many people consider hiring a professional fiduciary (like an estate planner) to be their trustee.
When hiring a professional to carry out the duties of trustee, you’ll first need to ensure that a terms of engagement document is signed by both parties to lay out the relationship between parties. This should be a separate document from the one that identified their duties as your estate planner. You’ll also want to look for the following qualifications (and potential red flags) when deciding whether to carry out the relationship.
Even if a professional fiduciary is able to draft a thorough terms of engagement document, that doesn’t necessarily mean that they have all the resources to properly administer your trust. Don’t be afraid to ask questions. You need to make sure that the professional fiduciary takes the trustee role seriously, and that they are well-equipped to take on the job. The below functions should be well within the wheelhouse of a satisfactory candidate for a professional trustee:
Even seasoned estate planners who take on the responsibility of trustee can find it difficult to fit your estate management into their schedule. The professional that you hire should be responsive and accessible. This is especially the case when the trust requires critical decisions related to distributions, beneficiary health, maintenance, education, and support. After you are gone, your beneficiaries will also be in constant contact with your hired fiduciary, and even more so when distributions are made on a reoccurring basis.
For instance, one of your beneficiaries may request an early distribution to cover the expenses of a medical procedure. Or perhaps the period to take advantage of government benefits is drawing to a close on a distribution amount. Will your professional trustee pick up the phone or quickly respond to an email in these instances? Proper communication is paramount to deal with the intricacies of your family’s lives, and your hired trustee must be passionate about providing them service when needed.
No one can work forever, and even your hired trustee must retire at some point. Do they have a plan in place to transfer their responsibilities to another individual or firm? The terms in your trust should outline who will become your successor trustee, but in the case that your trust puts the power of designating the successor in the hands of the trustee, you’ll want to ask your professional fiduciary who will fill their place if something happens to them.
Some instances will require your professional trustee to communicate with the caregivers of your beneficiaries. This could be due to the beneficiaries being minors, or perhaps because they are disabled.
In the case that a beneficiary is not able to manage the assets they’re gifted in the trust, it’s vital that your professional trustee can communicate with caregivers to understand their needs and translate them into actionable estate management duties.
After applying these suggestions when considering a third party trustee, notify them of your decision to nominate them. Even though they won’t assume trustee duties until you are unfit or no longer around, being proactive benefits the planning of your affairs.
Your nominated professional trustee does not necessarily have to accept the position. But by finding out if they’d like to take on the responsibilities sooner than later, you’ll have ample time to make an educated decision if you need to select another individual.
If you have any questions about selecting a professional estate planner to be your trustee, the knowledgeable attorneys at Anderson, Dorn & Rader can help. We offer Trustee Services to help guide you in the process of choosing an adequate trustee to carry out your wishes and preserve your family’s wealth.
Schedule a FREE consultation to discover the benefits of choosing Anderson, Dorn & Rader as your professional corporate trustee. We look forward to serving your needs with a high level of professionalism, experience, and dignity to match the values of your family.
Life is riddled with unknowns. While you can control certain events like whether you’ll have kids or tie the knot, other milestones are not as easy to predict. Life comes at your fast, and sudden, unexpected events can muddle with estate planning. For this reason, make sure your plan is flexible.
You’re able (and it’s recommended) to update your estate plan as you age. But when you die, the plan is more or less set in stone. To curb some of the unknowns that will inevitably arise, it’s a good idea to incorporate milestones into your estate plan. Milestones trigger predetermined decisions that allow you to exercise your wishes and pass wealth to loved ones after you are gone.
If-then statements are pre-made decisions that are carried out based on conditions you set. They are commonly seen in legal documentation, including estate plans.
The concept of if-then statements is straightforward. If a certain criteria is met, then a given action is put into motion. Take the following for example: “If my spouse and I both pass away before our children are fit to care for themselves, [Relative X] will be nominated as their rightful guardian."
Clauses like these can reserve some of the power you have over otherwise unforeseen circumstances. They also offer more flexibility than more simplistic declarative statements (“I leave the property in The Hamptons to my oldest daughter”, for example).
If-then statements can build upon one another to account for various future scenarios. So you could say, “If my spouse and I both pass away before our children are fit to care for themselves, [Relative X] will be nominated as their rightful guardian. If [Relative X] is unfit to care for our children, [Friend A] will assume the nomination.”
The beauty of conditional actions in your estate plan is that they can take on many forms. Aside from if-then statements, you can also include asset allocations or gifts that are put into motion when certain milestones are reached.
Check out these events that are commonly incorporated to trigger gifts or distributions to loved ones:
These milestones are just the tip of the iceberg, and can be combined or modified. For instance, you may give wedding money to a child while storing the rest of their inheritance within a trust. This ensures that if they get divorced, the assets you pass on won’t fall into the hands of their ex-spouse.
You can also set up your estate plan to allocate more money to an individual if the value of that asset increases over time. Remember that if-then statements can be used to make such allocations flexible. The possibilities are endless.
It's a complicated process to populate your estate plan with if-then statements and other milestones. But the work you do up front will protect you and your loved ones from the unknowns of the future.
The professional estate planners at Anderson, Dorn & Rader will help to put all your wishes in writing. To simplify the proceedings, we can spell out your conditional statements with flow charts and diagrams. These can then be integrated into your estate plan to provide clarity after you’re gone.
Whether you’re looking to update an existing life plan, or start from scratch, our estate planning lawyers can help. Contact Anderson, Dorn & Rader to secure your plans for the future and continue your legacy after you’re gone.
Tune into any major news outlet and you’ll hear about the rise – and tumultuous market behavior – of cryptocurrency. As with any other investment that fluctuates with market activities, there are risks associated with buying and selling. No matter how savvy you may be, if you’re investing in crypto, you need an asset protection plan. The following stories show just that.
Christopher Matthews was a businessman and investor who came from good money on both his mother and father’s sides of the family. He passed away in March 2018, and at that time, his estate was valued at $180 million. A large chunk of that came from a hearty $1.8 million investment in cryptocurrency. He bought his shares through a company we’ll call Wayve.
Matthews death was sudden, and as a result, his estate plan was outdated and didn’t reflect his cryptocurrency trading. After some phone calls with Wayve, it was found that the logins to his crypto accounts were kept on several devices throughout the country, and under other names as well.
Luckily, Wayve worked with Matthews’ lawyers to grant access to these accounts, though this isn’t always the case for account holders with less financial esteem. Even though Matthews’ estate attorneys caught a break with the accessing the accounts, they weren’t as fortunate in distributing the Wayze funds in a timely manner. It was critical that the accounts be liquidated to pay off outstanding debts and other tax obligations.
However, Matthews had a withstanding agreement with Wayze that put a cap on how many cryptocurrency shares could be sold at once. This agreement set back the distribution of affairs because the shares had to be sold over the course of several months. While this allocation process was going on, the remaining money in Matthews’ crypto account values began to plummet (thanks to a large dip in the market). By the end of the allocation process, the accounts lost about two thirds of their value, dropping the total value of the estate to less than half of what it was at the time of Matthews’ death.
Matthews’ surviving benefactors would have been in much better financial shape if he had disclosed his crypto trading activities with the individuals involved in his estate. Essentially, they would have been able to sell off shares sooner and reap the benefits of his investments. Instead, the market dip wiped out a large portion of the investments. Furthermore, an actionable plan should have been in place to avoid relying on the cryptocurrency investments to pay off the outstanding debts in the first place.
Steven Thompson was in tune with the latest trends and became an early Bitcoin investor. He even shared this knowledge with online followers in a 2011 video, which earned him 7,000 Bitcoin. Steve set up a digital hard drive with the company SteelLock to store his Bitcoin – in other words, a digital wallet.
It’s been over a decade since Steven set up his SteelLock, and he’s been busy mining Bitcoin ever since. Unfortunately, he’s forgotten the password that he initially used to configure it, and SteelLock only allows 5 wrong attempts before locking the account. To date, his portfolio amounts to well over $100 million. Unless he can remember the login credentials, he’ll never get to see or sell the money accrued.
The key takeaway is that accounts requiring a password need to be secure, but should also have a backup to enable access in the event of a forgotten password or estate distribution. It’s good practice to establish a plan at the onset of investment activities, because before you know it, a decade of investments will accrue and you may just forget your password when it’s needed most.
Jeff Connely was a Bitcoin miner who died doing what he loved – flying his Cessna in the Alaskan Bush. He was only 26 years old when he passed, and at that time, he owned a sizeable share of Bitcoin. The problem? No one, not even his parents or close friends, knew where he stored it, how much he owned, or how to access it.
The amount he owned would have been a nice influx of money that his loved ones could have managed after his passing. But since he didn’t share the details with his family, the shares he owned, and total amount of funds, went with him in the plane crash. Relatives may be able to estimate your net worth and property assets after your death by sifting through email, bank statements, or physical paperwork at your residence, but this is especially difficult to do with Bitcoin.
It’s not always obvious to loved ones that Bitcoin assets are a serious investment and may be worth an astonishing amount. That’s why a plan needs to be put in place. Let a trustworthy person in your network in on the details of your cryptocurrency activities, and how to access them should the unthinkable happen. Not only that, it’s smart to include details on how you want assets to be used when you’re gone. If you don’t do this, you’re putting your hard-earned investments up to the whims of how much documentation you left behind, and how easily loved ones can access it.
Cryptocurrency is a powerful investment tool that can be leveraged to one’s advantage and build generational wealth. It’s also very new to many of us, so working out a management strategy can be uncharted territory. To be prepared for the unexpected, lean on the knowledge of our estate planning professionals. We can craft a sound cryptocurrency plan to protect you and your loved ones. Whether you’re a seasoned crypto investor, or are considering just diving in, we encourage you to reach out to our advisors to plan for the future.
For the Reno snowbirds out there, the first snow of the season often signals that it’s time to move to a second residence with a warmer climate. While this move may seem innocent enough, there are a few legal matters to consider before locking up the house and heading south. One of the matters in question is which state you consider ‘home’.
Your state of domicile is where your permanent, principal residence is located. It affects family law matters, estate planning, and of course taxes. It is possible to be a resident of multiple states, but you can only call one your state of domicile. There are some subtle differences in state domiciliary laws, but usually, it’s were you live a large portion of the time and return to after going elsewhere.
For those who split time between multiple US states, it’s important to review your tax records with an advisor to ensure you are filing them correctly, and are maximizing use of tax laws. For instance, if you pay taxes in Nevada, you already know you’re among the seven states that do not have personal income tax.
Before heading south, take a look at your estate plan documents. It’s easy to glance over life events that may have happened recently, but they can affect how you want your wishes to be carried out. Keeping your estate plan current is a habit everyone should get into, as it ensures a seamless transition of your legacy. Ask yourself the following questions to help:
You may also need help with transactions and other financial matters while away from your domicile. That’s why it is important to determine whether your financial power of attorney is ‘springing’ or ‘immediate’. A springing financial / medical power of attorney means your agent can only step in and take action when you are no longer able to do so. On the other hand, an immediate financial / medical power of attorney means your agent can act on your behalf right away, even if you are able to take action yourself.
The knowledgeable team at Anderson, Dorn & Rader can help you determine which designation your estate specifies, and aid in performing changes if desired.
As you prepare for your upcoming travel, please do not hesitate to give Anderson, Dorn & Rader a call. We are here to answer any questions and to make sure you are properly protected no matter where you may roam. We are available to meet with you in person or via video conference. To schedule a meeting, call us at (775) 823-WILL (9455) or fill out our contact form. We look forward to meeting you!
Death is a delicate subject, but can be made simpler with proper planning. In the best case scenario, all paperwork and assets associated with a passing loved one is prepared with the utmost detail prior to death, allowing friends and relatives to fondly remember the deceased and take time to grieve.
Anderson, Dorn & Rader, and the estate planning business as a whole, aims to simplify the legal processes surrounding death so legacies can be transferred to surviving loved ones in a fair, stress-free manner. To accomplish this, savvy individuals will often take measures to ensure they don’t burden their surviving relatives with undue complications like the probate process.
Several tools are available through qualified attorneys to keep your property and monetary assets out of probate. Among these, establishing co-ownership of bank accounts and home titles, as well as lining up beneficiaries on investment and insurance accounts are great to start with. But a revocable living trust is one of the most favored comprehensive options that an individual can set up to avoid probate. Let’s check it out:
A trust is a fiduciary arrangement that grants a third party, or trustee, the legal permission to hold and manage assets on behalf of a beneficiary or beneficiaries. A living trust is enacted while an individual is still alive, rather than upon death. Arrangements can be made to grant you oversight duties on your own living trust until you become incapable of soundly managing your assets, or pass away. Upon your incapacitation or passing, the successor trustee assumes responsibility over the assets in the trust and manages them on behalf of all involved beneficiaries.
The Probate process involves transferring ownership of all monetary assets and property that haven’t been assigned to beneficiaries, or don’t contain a pay-on-death or transfer-on-death designation upon your passing. Often times with probate, the court gets involved, and the long-winded process to account for the assets ensues.
With a trust, your assets are ready to be transferred to your beneficiaries upon your death, if they haven’t already been transferred to the trust while you’re still alive. This puts probate out of the question, as your assets are all accounted for and can be distributed in a timely manner.
Even better, trusts can incorporate pretty much any category of asset: from real estate, to stock holdings, to bank accounts, to family heirlooms. This keeps your legacy from being administered through the probate court, ensuring everything you worked for ends up in the hands of the individuals you deem as successors. Not only does this eliminate costly court costs, but it keeps your records out of the public’s eye and enables beneficiaries to remember the deceased and carry on the good fortune of the trust without running into road blocks.
The language and investment surrounding the establishment of a trust can be daunting, often prompting individuals to delay the process or put it off entirely. But to plan without a doubt where your assets will end up, and with whom, it’s vital to create a trust. It’s peace of mind for both you and your loved ones when you pass.
Planning the details around your death is sometimes a difficult topic to breach, but can be made simpler with the help of your family and knowledgeable attorneys like Anderson Dorn & Rader. While you are ultimately at the helm when it comes to important decisions, our estate planning group truly cares about maximizing the legacy you will leave to your loved ones. For any questions about how to start the trust formation process, please give us a call or fill out our contact form. We look forward to bringing you and your family peace of mind.
The days are flying by, and before you know it, the New Year will be here. Plan ahead and fine-tune your gift giving before the holiday chaos ensues. It’s possible to make annual, medical, and educational exclusion gifts that aren’t technically considered as such under federal gift tax law.
Annual exclusion gifts are one type that you can give that do not trigger federal gift tax. For the year 2022, the gift tax threshold is $16,000 per person. That is expected to increase to $17,000 in 2023.
With annual exclusion gifts, assets amounting to $16,000 or less that are given to an individual within the calendar year are not considered gifts (for tax purposes at least – the recipients will still be thankful!).
Hypothetically, that means you can gift assets amounting to $16,000 or less to as many individuals you’d like up to December 31st of this year, then follow that gifting criteria again for the same recipients on January 1st, 2023 without having to file them under federal gift tax law.
Some sources may indicate that married couples are able to effectively double the annual exclusion amount ($32,000 per calendar year). Even if a married couple abides by this threshold, in some cases they may still be required to file a gift tax return. We recommend consulting our estate planning services to see if you need to report these “split gifts”, as they’re referred to.
Qualified medical exclusion payments / gifts are another type of transfer that aren’t considered ‘gifts’ under federal tax law.
To take advantage of medical exclusions, one must make a payment directly to a healthcare institution or medical insurance provider. Generally, this exclusion can be applied to any medical expense qualifying for a deduction under federal income tax guidelines.
For instance, you could have given $20,000 to the hospital that your grandchild was treated in for an emergency procedure earlier in the year, then give the same grandchild up to an additional $16,000 amount before December 31st, 2022. You could even go as far as to gift another $16,000 on January 1st, 2023. Even in this extreme example, these gifts would not trigger the federal gift tax threshold, as long as they are accounted for and transferred with the exclusions in mind.
An important note: the medical exclusion gift / payment must be made directly to the medical institution or medical insurance provider, not the individual receiving the medical care or insurance money. Even if the payment is “earmarked”, the patient cannot touch it, or the federal tax law will kick in and consider it a gift.
Gifted assets that meet the criteria of educational exclusions are another type of transfer that aren’t considered ‘gifts’ under federal tax law. This includes qualifying payments made directly to both domestic and foreign institutions.
So hypothetically, you could pay for your grandchild’s emergency procedure (referenced above), pay for their educational tuition amounting to $25,000, give them an additional $16,000 by December 31st, then give them $16,000 on January 1st, 2023. That’d be one thankful grandchild, and you likely wouldn’t trigger any federal gift tax returns.
Remember two things before initiating an educational exclusion gift: First, the payment must be made directly to the educational institution, not to the individual enrolled. Next, the payment can only be put towards tuition. Not supplies, books, dorm payments, or other related educational expenses.
It can be exciting to gift money and property to loved ones. After all, they will carry on your legacy in the future. While it’s tempting to simply transfer it to the recipient’s bank account, consider the guidelines surrounding annual, medical, and educational exclusion gifts to avoid the burden of taxes and maximize your financial picture. For assistance in doing so, contact the experienced Reno estate planning attorneys at Anderson, Dorn & Rader. We are happy to walk you through the process to make it enjoyable for all parties involved.
Let’s examine a scenario all too common for divorced parents and their children. Imagine you just finalized the divorce from your spouse. Your retirement plan from work and your life insurance policy are the largest assets you own, and you have designated your two minor children to receive the money from these accounts when you pass. Your divorce was rather nasty, so of course you do not want your spouse to receive or manage the money in these accounts after you’re gone. They cannot be trusted to pass the money down to your young ones.
You pass away one year later. Both of your kids are still under 18, so in order to receive any assets from your retirement or insurance plan, an adult must be appointed to collect it on their behalf. Of course, the court’s obvious choice of who will take management of the assets is the living parent of your children: your ex-spouse. In Nevada, the caretaker of the money is called a guardian. The guardian has complete control over the funds since your children are not legally able to manage significant assets.
Most often, the loved ones of divorcees bare the brunt of their poor use of estate planning tools. While naming beneficiaries to receive your insurance or retirement assets has good intentions tied to it, these basic tools are often rendered useless by the complexities surrounding dissolved relationships. With the proper planning tools, there are means to fully protect your children’s inheritance against the unknowns.
A trust is a powerful tool that lets you direct and control your estate in ways no other life plan process can. Trusts enable you to manage property while you’re alive, then quickly transfer it upon death. The trust is comprised of a few main players. The person that sets up the trust (you) is often called either the Trustmaker, Grantor, or Settlor. Next is the Trustee, who manages the trust’s owned assets. Usually, you’re the Trustee during your life, then you appoint someone else as trustee to manage the assets when you’re no longer able. Finally, there are the Beneficiaries. These are the people you designate to receive the benefits of the trust (often your children and close loved ones).
A trust protects your children’s inheritance in a few ways:
Gaining full control of how you’d like your legacy to be utilized by you beneficiaries is crucial, especially after divorce. Even if you are wondering whether to update estate plans, Anderson, Dorn & Rader can help to map your trust assets with a comprehensive life plan. We are Reno’s trusted estate planning lawyers. Give us a call or set up an appointment to speak with our knowledgeable staff today.
You’re probably familiar with federal taxes, especially if you see the line item deduction on your check each pay period corresponding to ‘federal income tax’. Fewer people are aware of other types of taxes though, such as capital gains taxes, gift taxes, estate taxes, and perhaps the most overlooked: the generation-skipping transfer tax.
The federal generation-skipping transfer tax (GST) comes into effect when an individual transfers property to another individual at least two generations down from them. These transfers usually involve gifts given from grandparents to grandchildren and/or their descendants. However, the GST tax can also be triggered by gifts given to unrelated individuals (not including the individual’s spouse).
The GST tax is effective for gifts transferred both during the grandparents’ lifetimes and after their death through an inheritance. The recipients of gifts that trigger the GST tax are commonly referred to as “skip persons”.
The GST was first introduced by Congress in 1976 to eliminate the ability for wealthy people to skip over their children and transfer assets directly to grandchildren, thus avoiding inheritance taxes completely, and estate taxes for the first generation. The GST abides by the gift and estate tax exemption limits, but is a separate tax in itself that applies in correspondence and in addition to any present gift and estate taxes.
Typically, the GST tax comes into effect when the amount transferred to “skip persons” is greater than $12.06 million (a transferor’s lifetime GST tax exemption amount allotted for 2022). The lifetime exemption amount consists of all gifts made throughout the transferor’s lifetime, as well as transfers made at death in the form of wills or trusts.
For instance, if a grandparent gifts $50,000 to each of their 6 grandchildren in 2022, then $300,000 is counted against their lifetime exemption allotment of $12.06 million. If this gift amount is exceeded (both during life & death), a flat 40 percent tax is applied to the overage.
If the child of a grandparent passes away before them, there is an exception to the GST tax. In the case that assets are transferred to a grandchild whose parent has already passed away, the GST tax is not applied. This would not be considered generation skipping, since the grandchild essentially assumes the position of the parent who passed away, facilitating an adjacent generation transfer.
The GST tax also doesn’t apply to medical care or tuition payments transferred directly to a designated institution. In this case, a grandparent could financially assist with a grandchild’s college tuition or medical bills if they give the money directly to the college or hospital.
The vast majority of us do not have to worry about the GST tax structure due to the high lifetime transfer amount of $12.06 million. Even so, it’s smart to be aware of the GST tax, and that the lifetime transfer amount is set to be adjusted to $5 million (to account for inflation) in the year 2026.
Proposals to lower the exemption amount are regularly introduced to Congress. That means the GST tax lifetime amount could change at a moment’s notice. Knowledge of the GST tax is vital if you or a loved one plans to transfer assets to grandchildren.
Additionally, one should keep in mind that, although married couples are essentially granted double the exemption amount, the exemption rules to the GST tax are ‘use or lose it’. It does not work in the same way as the estate tax, where a spouse who passes away can have their unused amount distributed to the surviving spouse. Any unused GST tax lifetime exemption amount evaporates at the time of the first spouse’s death.
This is not an exhaustive explanation of the generation-skipping transfer tax, and you will likely have questions based on your unique situation. The GST is a challenging subject, and few have the experience navigating the laws surrounding it than Anderson, Dorn, & Rader. Our team can assist with any questions if you plan to transfer a property amount sufficient to trigger the GST tax. The best outcome is one that satisfies your desire to pass wealth down to the next generation, so when you’d like to start the conversation on transferring your assets, contact Anderson, Dorn, & Rader: Reno’s trusted estate-planning team.
According to recent, prominent studies, nearly two thirds of American adults do not have a formal estate plan set up.
For those in the minority who have prepared a living trust, will, or other estate documents, you’re one step ahead. However, just because you’ve established these initial steps doesn’t necessarily mean your estate plan is settled. A thorough estate plan requires continual updating as circumstances change. Even if you have been good about making updates, there are crucial components you may have overlooked. Designating beneficiaries and decision makers for retirement accounts or life insurance policies are a prime example.
Your designated beneficiaries and decision makers are living people, so it’s important to consider what may also happen to them. Even the most well thought out plans can go awry, but proper consideration of all potential scenarios can play a large role in ensuring your wishes stay intact after you’re gone.
Short answer: Yes. A proper estate plan lines up multiple decision makers to carry out your wishes.
You should put careful thought into determining which individuals to appoint as decision makers. They’ll need to be trusted, as important decisions regarding your affairs will come their way. It’s also possible that at some point, they will no longer have the capacity or willingness to carry out the decisions asked of them. This is where backup individuals are important. We recommend having at least two backups for each of the above positions.
People, and your perception of them, can change over time. Some of these changes will impact their capacity to fulfill your last wishes. For instance, the person you initially designate as trustee might turn out to lack knowledge of finances. This raises a red flag, because they’ll be the one handling your money after you’re gone. And if your designated guardian turns out to be not so great with children, you’d want to reconsider who you appoint to take care of your kids.
There doesn’t need to be any suspicious behavior to influence a decision maker change. Often times, something as predictable as age plays a factor. Somebody who you designated as a guardian when they were in their 40’s may not be as fit for the position in their 60’s. On the same token, someone too young to appoint as a guardian now may be ideal in ten or so years.
A backup decision-maker is also necessary to replace one that dies, becomes disabled, or expresses that they no longer wish to take on the responsibility of a designated position.
The main thing you should takeaway is to continually check in on your choices for designated decision makers and name backups when necessary. Alternatives act as a fail-safe to ensure that people you love and trust – not the courts – end up making decisions on your behalf after you’re gone.
Your furry, feathered, and even scaled friends are part of your family. Often, they require more day-to-day attention and care than children. So who will take care of them when you’re no longer around?
Pets are certainly not overlooked in your daily life. Some sleep on the bed, eat like royalty, and get groomed handsomely. But it’s possible that your pets weren’t given much thought in the midst of planning your estate with an attorney. After all, there’s a lot on your mind during the process.
Believe it or not, you can name a legal guardian for your pets after you’re gone. Similar to other designated positions, it’s helpful to have backups lined up if your first guardian choice doesn’t work out. Additionally, you can include information on how they can find a suitable home or shelter to be surrendered to in the case that no one can care for your pet. Aside from addressing who the caretaker will be, it’s beneficial to write out your wishes for how your pet should be cared for. This way, the designated guardian will know all of the animal’s quirks, medications, allergies, and their favorite spot to be rubbed.
A named beneficiary is the individual within your estate plan who will inherit your monetary and property assets when you die. When you pass and your estate is administered, your assets are distributed or managed by your designated beneficiaries. Some instances require a contingent (backup) beneficiary.
If you do not have a contingent beneficiary in these scenarios, your assets may be dealt with according to state law. This often involves enacting the probate process. This lengthy process can delay asset distribution, lead to increased settling costs, and cause family infighting. To avoid these unfavorable outcomes, it’s best to designate one or more contingent beneficiaries for the benefit of everyone.
It’s not fun to think about, but you should be prepared for the unthinkable situation where all the loved ones you designate as beneficiaries pass away before you.
Yes, it’s highly unlikely, but it’s happened before. In this case, having contingent beneficiaries will not suffice because nobody will legally be able to accept the assets in your estate. Depending on your state of residence, if you have no surviving beneficiaries, the government could obtain all your money and property by default.
Even though it’s uncommon, this scenario could afflict those with few living relatives. By adding a family disaster plan or remote contingent beneficiary to your estate documentation, you are able to designate a charity or organization that will receive your assets.
Unexpected life events can often prompt people to take action on their estate plan. At the very least, one should have a basic will, but many people still put off accounting for their assets once they’re gone. Procrastination, a perceived lack of money and property, and concern for the cost and energy required to implement an estate plan can turn some away from the process.
The estate planning process is not as costly or intensive as you may think, especially when hiring a knowledgeable estate sale lawyer. And considering the cost of NOT having an estate plan, it would be selfish to leave your surviving family with the burden. Not to mention, your hard-earned assets could end up in the government’s hands if not prepared adequately. For those who have already taken steps to secure their estate plan, this is a great start. With effective back-ups to weather the unexpected, your life plan will be able to determine who will make decisions, take care of your pets, and inherit your assets after you have deceased.
No matter where you are in the estate planning process, we encourage you to reach out to our real estate lawyers to ensure that everything you worked for in your life goes to the people you love and trust. Contact Anderson, Dorn, and Rader to begin your journey to peace of mind for you and your family’s future.
Everyone has the right to protect their financial future. At Anderson, Dorn, & Rader, we are firm believers that people identifying as LGBTQ+ should have a comprehensive estate plan in place to ensure that wishes are clear and contentious, costly legal battles are avoided. In the event of an accident, illness, or death, are your finances laid out? No matter your age, sexual identity, orientation, wealth, or marital status, we are here to help you protect you and your loved ones through the estate planning process.
Obergefell v. Hodges, the 2015 case that legalized same-sex marriage in the US, was a long overdue victory for LGBTQ+ people and allies. While it did simplify some aspects of estate planning for LGBTQ+ individuals, it did not resolve all of the complex issues ingrained into our nation’s discriminatory legal framework. The reality is that sexual and gender minorities will face challenges that “traditional” people and couples will not. These challenges can involve family members who do not recognize your relationship, child adoption by same-sex couples, and unmarried couples living together.
It’s important to prepare for such instances, otherwise you and your family could be subject to Nevada’s default intestate succession law, which doesn’t always take into account LGBTQ+ couples’ relationship dynamics. Additionally, if you have an existing estate plan that was created before 2015, don’t assume that your same-sex marriage status was automatically updated. Often times, it’s not. A checkup will determine if revisions are necessary to reflect the latest legal rights onto your same-sex marriage life plan.
The 2020 US Census finally shed light on some LGBTQ+ matters, including the percentage of same-sex couples living together and the number of Americans identifying as LGBTQ+.
The 2020 Census found there are:
The US Census Bureau found (perhaps unsurprisingly) that same-sex couples are more likely to be unmarried than heterosexual couples. Same-sex married couples account for only ~1% of the nation’s married couple households. 2020 Census data also indicate more than 88% of American adults identify as straight, while 4.4% identify as bisexual, and 3.3% identify as gay / lesbian.
Additionally, the Gay and Lesbian Alliance Against Defamation found that young people are significantly more likely than their older-generation counterparts to identify as LGBTQ+, likely due to more widespread social acceptance. Among the entire US population, 12% of adults identify as LGBTQ+, while 20% of millennials identify as LGBTQ—nearly three times the number that Baby Boomers indicated on their Censuses.
The word estate can conjure images of a large, lavish country home, but the legal term is different. In this case, it’s all of the property and money a person owns.
Your estate is comprised of all the physical assets you own (vehicle, home, and everything in it). Additionally, it takes into account your bank assets and liabilities, such as investments, business interests, and any outstanding debts you have at the end of your life.
Essentially, estate plans are written instructions on how you’d like your money and property to be distributed when you die. It also considers the circumstances surrounding your ability to make cognitive decisions if you suddenly become ill or incapacitated. The following are the essentials you should have in your estate plan, whether you’re LGBTQ+, straight, or anywhere else on the spectrum:
If you don’t plan for what happens to your estate when you are gone, someone else will – and that entity won’t always have your best interests in mind.
Failure to establish an estate plan transfers the decision-making power to the state. From there, they’ll determine where your money and property goes according to Nevada intestate succession law. For the LGBTQ+ community, this is an undesirable outcome due to the inequitable factors within the state’s intestate succession law.
Depending on the state’s laws, your spouse may or may not receive all the items in your estate. The laws could pose greater risk if you are single, as your money and property could go to a family member who does not internally legitimize your relationship or sexual orientation based on their own beliefs.
Unfortunately, even if you are married, your spouse cannot unilaterally make financial and medical decisions for you in the event that you become incapacitated. That’s why it’s important to create a detailed estate plan. Without it, your spouse may have to navigate the legal process to obtain decision-making powers after you pass. Even worse, the court could appoint a family member, no matter how estranged, to make these important decisions for you.
For LGBTQ+ couples with children, further legal complications can arise. The biological parents of the child(ren) usually have legal priority. In severe cases where one, or neither partner, are biological parents, the child could be assigned to their birth parents after you die without a will. Proper planning, such as an court-ordered adoption, can strengthen rights to avoid such cases where LGBTQ+ parents are not legally recognized as guardians.
Luckily, social acceptance for LGBTQ+ people has been steadily increasing over the last few decades, though it still has a long way to go. According to Gallup polling, support for gay marriage has increased from 26% to 70% since 1996.
Civil unions and domestic partnerships were common “workarounds” for homosexual couples to be together prior to the 2015 Supreme Court ruling that made same-sex marriage legal. Unfortunately, previously-recognized arrangements are not automatically updated to reflect current marriage laws within estate planning. This means that without proper reversal, past partners can have a legal interest in your estate. Therefore, it’s important to update the terms of your life plan to reflect your current relationship status, which should include terms like husband, wife, or spouse.
Beyond your current relationship interests and status, your estate plan should also consider other life events that may have taken place. For instance, perhaps you acquired property, received an inheritance, or adopted a child! Our LGBTQ estate planning professionals recommend updating your plan every few years to keep up with life events.
No matter if you identify as LGBTQ+ or not, it’s important to have a well thought out plan for how your estate will be distributed after you pass. Anderson, Dorn, & Rader are the region’s only estate planning lawyers who are allies in providing comprehensive financial guidance and documentation for you and your loved ones.
We will create a curated plan that captures your financial picture and situation. For questions about LGBTQ+ estate planning or to get started, please contact Anderson Dorn & Rader to set up an appointment with our knowledgeable attorneys.
References:
1 U.S. Census Bureau, Who Is Living Together? Same-Sex Couples in the United States, Census.gov (Nov. 19, 2019), https://www.census.gov/library/visualizations/2019/comm/living-together-same-sex.html.
2 Brian Glassman, Census Bureau Implements Improved Measurement of Same-Sex Couples, Census.gov (Sept. 17, 2020), https://www.census.gov/library/stories/2020/09/same-sex-married-couples-have-higher-income-than-opposite-sex-married-couples.html.
3 Id.
4 U.S. Census Bureau, Sexual Orientation and Gender Identity in the Houeshold Pulse Survey, Census.gov (Nov. 4, 2021), https://www.census.gov/library/visualizations/interactive/sexual-orientation-and-gender-identity.html.
5 New GLAAD Study Reveals Twenty Percent of Millenials Identify as LGBTQ, GLAAD (Mar. 30, 2017), https://www.glaad.org/blog/new-glaad-study-reveals-twenty-percent-millennials-identify-lgbtq.
6 Id.
7 Justin McCarthy, Record-High 70% in U.S. Support Same-Sex Marriage, Gallup (June 8, 2021), https://news.gallup.com/poll/350486/record-high-support-same-sex-marriage.aspx.
Generational wealth is often the means by which families retain economic status and live comfortably over time. Family members before you worked throughout their lives to make a living, care for their assets, and pass some of that down to the next generation: you. In the event that you are expecting an inheritance, do you have the proper measures in place to confidently acquire and manage it?
Estate planning plays an integral roll in maximizing an expected inheritance by laying out how it will be used by your family in the future. Expert research analyses predict that the largest transfer of wealth in history will occur over the next several decades. However, with an uncertain economic climate and a trend towards spending over saving, heirs of inheritances often spend, lose, or donate large portions of what they receive. Planning for inherited wealth can help you anticipate and prepare for these instances, while sill protecting the legacy left to you. With an expertly-crafted inheritance plan, you are helping to ensure financial security for you and your family.
Sometimes, our emotions guide our financial decisions, rather than logic. The feelings surrounding the transfer of an inheritance are often unsettling – grief, guilt, anger, confusion. It’s difficult to consider the facts and hard numbers associated with the passing of a loved one. Not to mention, there are lengthy procedures one has to go through to legally confirm the transfer of wealth. It’s important to stay level-headed during the decisions that could affect you and your family’s financial well-being.
An inheritance can be an unexpected stroke of good fortune in a time of loss. Since our brains often classify them as “found” money rather than “earned” money, inheritances don’t tend to be utilized as conservatively as the money we work for. That’s why most inheritances are drained within just five years. A failure to realize the implications of careless spending can get us accustomed to living a lifestyle above our means, only to have it disappear as quickly as it came.
A sudden acquisition of assets and cash can greatly affect you and your family’s life. When handled correctly, you’ll respect the legacy of your loved ones that came before you. When caught unprepared though, you could be burdened by tax payments, careless spending repercussions, and even creditor issues.
Before any pen & paper planning begins, it’s best to have a conversation with your loved ones while they are still living and mentally fit. It can be awkward to talk about what happens to assets after one passes, but go in with the frame of mind that each party will be helping each other. The benefactor will be giving you vital information and consent, and you will be giving them peace of mind that their legacy will live on. By discussing their hopes of how the inheritance will be used after they pass, you’ll get a better understanding which you can use in the planning process.
Using the conversations with loved ones as your guide, it’s crucial to then meet with a financial planner and an estate planning attorney to discuss the amount and types of assets you anticipate inheriting. There are nuances to the processes in which you’ll handle various types of assets. For example, inherited real estate is handled much differently than inherited stocks and bonds. An estate planning attorney can also help you understand the distribution schedule to receive the assets. It could be all at once, in installments, or custom-configured based on a will. Not to mention, a financial planner can help you navigate the taxes associated with your inheritance.
Life happens, and a legacy left to you by a loved one can alter the vision of your financial picture. Anderson, Dorn, & Rader are your trusted team of estate planning lawyers and financial planners in Reno.
If your family is expecting an inheritance, wants to update estate plans, or has questions about the planning process, give our office a call so we can help you maximize your windfall and honor the loved ones that worked hard to pass on their good fortune to you.
With roughly 40 percent of U.S. adults suffering from a mental illness, it’s time to remove the stigma surrounding the topic. With greater awareness, there is greater opportunity to ensure that those affected by mental illness receive the help or treatment that they need, not just now, but in the future as well. Estate planning for someone with a mental illness will give you peace of mind that your loved one will be well taken care of in any unforeseen event.
The odds that you or somebody in your family is living with a mental health condition are 2 in 5. Rather than dismiss these issues because they are uncomfortable, we recommend being proactive about these challenges so that you’re prepared for whatever life brings your way. The best way to do this is with the help of an incapacity and estate planning attorney who will be able to draft a trust that covers all your bases.
Nearly 50 Million Americans Suffer from Mental Illness
Saying that America is dealing with a mental health crisis is not an exaggeration. According to the National Alliance on Mental Illness, approximately 40 percent of US adults experience mental illness, which is an increase of 20 percent from the year 2020. Additionally, 1 in 20 who experience serious mental illness, and 17 percent of American youth experience a mental health disorder.
The mental health crisis has worsened during the coronavirus pandemic. Loneliness and isolation are fueling increases in anxiety, depression, and thoughts of suicide and self-harm, reports Mental Health America. More people are seeking mental health screening and treatment, but around 23 percent of Americans with mental illness are still not receiving the services they need.
Improvement starts with acknowledging that there is a problem. Talking to a healthcare professional about mental health struggles and treatment options leads to better outcomes. One improved outcome can be creating an estate plan that takes into account your own, or a family member’s, mental health.
Your Mental Health and Your Estate Plan
Every estate plan should be tailored to the individual’s needs and their unique family dynamics. A number of estate planning documents are available to address concerns about your mental health. Chief among such concerns is the possibility that, at some point, you may be unable to manage your own affairs. To prepare for that contingency, consider having the following documents in place:
Importantly, for these documents to have legal authority, you must have mental capacity when you sign them. To ensure capacity, you may want to obtain a professional opinion from a licensed mental health provider stating that you are of sound mind and understand the meaning and effect of the documents you are signing. Alleging lack of capacity is a common basis for contesting an estate plan.
In addition, if you are entrusting somebody with power of attorney authority, and that person has their own mental health concerns, you should discuss the issue with your family as well as your estate planning lawyer.
Your Beneficiaries’ Mental Health
Having beneficiaries who suffer from mental illness presents a different estate planning challenge. You must pass your legacy to them in a way that serves their best interests. Discretionary trusts and supplemental needs trusts are two ways you can look out for a mentally ill loved one even after you are gone.
There is a significant difference between suffering from a severe mental illness, such as bipolar disorder or schizophrenia, and a more minor issue such as anxiety or depression. Some people’s mental health issues can come and go over the course of their lifetime. Others’ illnesses are prolonged or recurrent. In some cases, a person may be genetically predisposed to mental illness that has not yet manifested. Proper proactive estate planning can protect you and your loved ones from whatever type of mental disorder may be of concern to you.
These are some of the factors to consider when making estate planning decisions based on mental illness in your family. Every individual and every family is unique. Your estate plan should reflect what you know now and be updated to reflect changes in your life and the lives of your family members. Contact us to learn how mental health considerations can fit into your estate plan.
Estate planning is a sensitive subject and it can be even more sensitive when the issue of mental health is involved. If you need to set up an estate plan, or revise an existing estate plan, around mental health concerns, we are here to help. Please contact our office to set up an appointment with an estate planning attorney.
Most parents want to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles, and good friends sometimes want to leave gifts to beloved young children too. Unfortunately, good intentions and poor planning often have unintended results. Don’t make these common, expensive mistakes. Instead, here’s how to both protect and provide for the children you love.
Many parents think if they name a guardian for their minor children in their wills and something happens to them, the named person will automatically be able to use the inheritance to take care of the children. But that's not what happens:
Most parents would prefer that their children inherit at a later age, but with a simple will, you have no choice; once the child reaches the age of majority, the court must distribute the entire inheritance in one lump sum.
A court guardianship for a minor child is very similar to one for an incompetent adult.
All of these expenses are paid from the inheritance, and because the court must do its best to treat everyone equally under the law, it is difficult to make exceptions for each child's unique needs.
Instead of using a simple will, a better option is to set up a children's trust in a will:
The best option is a revocable living trust, the preferred option for many parents and grandparents:
For many folks, the absolute best solution is to keep the assets in trust for their lifetime or until assets get spent down. Assets that are trust protected are there for your child, but can’t be taken from them. Your children will grow up and need the continued protections you can provide in a revocable living trust.
While we’d all like for our lives to turn out exactly as we had planned when we were in our 20s, this is highly unlikely. Life can change in the blink of an eye and it’s unrealistic to expect that an estate plan drafted by you in your early thirties will still reflect your wishes as a 50 or 60-year-old. Learn more about how to legally prepare for your future with the Reno estate planning lawyers at Anderson, Dorn & Rader by assessing the Johnson family’s history with estate planning below.
Patricia and Sal Johnson married at the ages of 23 and 26. Just a few years later, their first child, Simon, was born which prompted them to get an estate plan in place. Just three years later, their second child, Pamela, was born, leading them to update their estate plan to include both children.
Later in life, the couple attended one of our estate planning seminars, which encouraged them to update their estate plan yet again, this time with a trust-based plan in place that will not only protect themselves, but also their children, grandchildren, and even the family dog, Rudy.
However, rather than taking part in client maintenance opportunities that allow the Johnson’s estate planning lawyers to keep their plans up-to-date, they chose to just call in when they wanted to make amendments. This resulted in the estate plan going untouched for many years, and updates were never made despite their continued life changes.
As stated earlier, life is going to change over time. How you choose to update your estate plan and when will help you deal with all of those changes accordingly. Here’s what’s changed in the Johnson family’s lives in the last 10 years:
How do you think their estate plan will look now that there have been some major life changes throughout the whole family? Surely, they will need to update the estate plan to reflect these changes, which are typical of what 10 years can bring.
Now that you’ve seen how the Johnson’s lives have changed, let’s apply this to you and your family. What changes have you experienced in your life? Have you moved? Did you purchase a new home? Do you have more children or grandchildren? Have you started a business? Has anyone suffered any health problems? Do you have new accounts or investments? Do you now care for a parent, pets, or dependent children? Have you remarried, gotten divorced, or retired?
All of these factors can greatly impact your current and future estate plans, but you’ll also need to consider how the lives of those around you have changed as well. Has someone you loved died? Have friends or family named in your plan as trusted helpers moved away, or has your relationship changed? Are your children now adults and able to help you? Do you want to help with the grandchildren’s college or sports interests?
Surely, many things have changed in the past 10 years and it’s important that your estate plan reflects the changes in your personal life, financial situation, and overall goals.
To update your estate plan, or get one started, reach out to Reno estate planning lawyers Anderson, Dorn & Rader today. They’ll be able to help you define your goals and draft an estate plan that fits your specific needs. Connect with us to learn more.
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Unexpected personal tragedies are not particularly common, but they do occur and they can dramatically change the course of a child’s life. Parents in the United States have a statutory right and responsibility to name a guardian for their child or children. If a guardian isn’t legally appointed by the parent, it becomes the responsibility of a judge to determine guardianship following the parents’ passing or incapacitation. In such instances, custody of the child may go to anyone chosen by the judge, regardless of what the parents would have wanted.
The guardianship of a child who is originally from another country can be even more complicated to manage. A child custody attorney can help citizens and non-citizens determine proper guardianship for children in the event of their incapacitation. Learn more about guardianship in Nevada below.
A general rule of thumb regarding guardianship in Nevada, or any state in the U.S., is that all parents have a fundamental and constitutional right to the care, custody, and control of their child. This essentially means that a parent has the right to make all decisions for their child without interference so long as they do not put the child in danger. This right was eventually extended to non-citizen parents that reside in the U.S. legally, allowing both citizen and non-citizen parents to name whomever they want as a guardian to their children—so long as they meet the state requirements.
It’s important to note that it is not only a parent’s right to choose a guardian but also their responsibility. This is the only way to keep the courts from determining guardianship of the child.
Children who legally reside in the U.S. as citizens but are native to another country may face further obstacles. Because it’s easier for a judge to oversee the safety and care of a child within their jurisdiction, it can be difficult to move a child to another country. To combat this, parents should be clear about who the child will live with and where (whether in the U.S. or not).
Parents of children with attachments to other countries should always apply for dual citizenship for the home country and the United States. This will prove to the court that the parents intended for their child to have connections to their home country and provide a basis for relatives living outside of the U.S. to request guardianship assistance from their own state department. Proving dual citizenship will help the process of expatriation and ensure the child is able to travel back to their home country.
It’s also possible that a non-citizen may be appointed as the guardian of a child. However, if the parents request for the child to remain in the U.S., there is no guarantee that the guardian will be allowed to stay in the U.S due to the guardianship alone. The person who is appointed as the child’s guardian will need to become a U.S. citizen through their own legal proceedings for this to be accepted.
It is possible for the law to interfere with a parent’s choice of guardianship under specific circumstances. A court may invoke the policies of “Best Interests” and protections made by the Hague Convention to retain custody of a child who would otherwise be sent to a country where they would be endangered or persecuted. While this is not very common when handling guardianship in Nevada, it is an issue that could possibly arise.
During interim periods between emigration, which can take months, a child may be stuck living in the U.S. before they can be united with their new full-time guardian. In these cases, a temporary guardian will also need to be nominated for the time being.
The child custody attorneys, Anderson, Dorn & Rader, are here to ensure the decisions you make regarding your child’s care are kept and seen through. If you need help legally determining guardianship in Nevada for your child, connect with us today.
Every February, American Heart Month begins as a friendly reminder to think about your heart health. This commemorative month was established in 1963 and prompts us to combat heart disease, the leading cause of death in America. Even with the high mortality rate of Covid-19, heart disease continues to be the dominant cause of death in the United States. Ultimately, American Heart Month is a great time to review your heart health and build healthy habits for the future. Of course, don't forget to consider who will act as your medical agent if you are unexpectedly stricken with a heart attack.
Various states have differing titles for medical agents, including a medical power of attorney, an advanced health care directive agent, a health surrogate, a health or medical proxy, and more. Regardless of the title your state uses, this person will make all medical decisions for you if you ever become too ill to communicate your wishes.
This person plays an essential role in making critical decisions regarding your health. Your medical agent should understand your medical wishes because they decide what care you will or won’t receive by communicating with providers caring for you. Also, keep in mind this person gains access to your private information, so you should consider all these factors before deciding who will act on your behalf.
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It is easy to assume anyone close to you is fit to be your medical agent, but this is not the case. Consider someone you know will stay level-headed in emotional situations since everyone handles stress differently. Your medical agent should be reasonably assertive because of the many family opinions and doctor recommendations they will have to navigate. This person should be comfortable silencing others opinion to focus on your wants and needs when making decisions.
Your medical agent should live close to you because something unexpected can come up at any moment. This person will have to act on your behalf quickly and efficiently so that you don’t have to wait for care if you are incapable of speaking for yourself.
It is crucial to make sure your medical agent is willing to set time aside in case of a medical emergency. Having this title is both time-consuming and emotionally draining, so reach out to the person you’d like to act as your medical agent and address any concerns. Doing this in advance will help you choose someone willing to take on this responsibility.
You must choose a medical agent who will make decisions following your wishes. The person you choose needs to set aside their own wants to focus on making the decisions you expressed previously. Your medical agent acts as your voice even if they don't agree with your course of action, so be sure to find someone you can trust to follow your wishes if you are incapable.
Remember, even if you believe someone is right for the title, some states prohibit certain individuals from acting as a medical agent.
Many states don’t allow minors to be patient advocates, but there can be exceptions. Also, remember not everyone over the age of 18 qualifies to act as a medical agent so talking with a professional can help clarify state restrictions.
Not every state restricts health care providers from acting as medical agents, but most do. These restrictions can be overlooked if the health care provider is a family member, but make sure to take the proper steps to allow this. Furthermore, Kansas, Missouri, and Kentucky allow your health care provider to act as your medical agent if they are an active member of your religious organization.
If you haven’t decided who will act as your medical agent, Anderson, Dorn, and Rader can help determine the best fit. If you need someone to act as a backup, our attorneys are willing to build a strong relationship with you to understand your needs in case of an emergency. We will ensure that your wishes are carried out and written as required by state law.
Contact us now to discuss how to properly name a medical agent, as well as discuss other advance care directives.
An estate plan consists of several parts and considerations, including a living trust. A living trust is a legal arrangement set up during a person’s lifetime that places their assets into a trust overseen by a trustee. The living trust also determines how the trustor’s assets will be distributed once they pass or become incapacitated. Some factors that may cause someone to create a trust range from tax benefits and avoiding probate to caring for family members with special needs. See how working with an estate planning attorney to create a living trust will help your family.
Avoiding probate is the most common reason for seeking out a living trust. Probate is the courts’ process of proving a will is accepted as a valid document that can be used to effectively distribute assets. There are several reasons in which you would want to avoid probate. The first is that probate can be a costly way to transfer your assets upon death. There are multiple parties that may need to be paid out during a probate proceeding, including the court, which add up quickly.
Probate is also a very lengthy process. It can take six to nine months (sometimes longer) to fully go through probate. There are many factors, documents, and people involved in the probate process, so it’s easy for complications to arise. Problems such as a contested will or an inability to find clear records of all of the deceased's assets and debts can extend this timeline.
Lastly, your probate proceedings will be publicly recorded for the court, meaning your case will become public knowledge and will be available to anyone. This significantly limits you and your family’s privacy which is not ideal during a family member's death.
A living trust provides tax savings to those estates that are subject to estate or gift taxes. There are many types of trusts to choose from, but the most common are irrevocable trusts and revocable trusts. A revocable living trust allows you to make amendments and changes to the documents as necessary, even during the trustor’s life. An irrevocable trust cannot be amended after the document has been signed, but it does offer significant transfer tax benefits that are not subject to the typical gift tax requirements. When you work with us, we'll make sure to align the type of trust with your family's tax-saving needs and other goals.
When it comes to your trust, it’s important for you to understand that a trust only controls assets that are put, or funded, into the trust. Living trusts need to be continually updated to accommodate changes such as marriage, childbirth, home purchases, and tax laws that could affect the trust. With a living trust, the trustor is able to amend the document to reflect their wishes. Because of this, it’s crucial that you work closely with your estate planning attorney to make sure your assets are properly aligned with your trust. This will not only help you get organized, but it will also make things easier for your heirs when you pass away.
Call our office at (775) 823-9455 or visit us online at wealth-counselors.com to schedule a complimentary consultation.
Estate plans are more than your monetary net worth. Categories of your estate can include real estate, pets, possessions and all other property you own. Some people forget how priceless personal property, such as family heirlooms and keepsakes, can be to those you leave behind.
It is important to work out what will happen to these valuable items after your death by creating an estate plan.
Heirlooms have been passed down to family members for generations. These items can vary in monetary value, but the memories attached to them are copious, giving them an emotional and sentimental value that shouldn’t be discarded or auctioned after your passing.
Keepsakes are slightly different from heirlooms because they apply to specific items you owned during your life. These items can be anything from cutlery sets, furniture, or jewelry that you left behind for your family. While these valuable items only have been passed down once, they have nostalgia your family wouldn’t want to lose.
Family members can have different values associated with certain heirlooms and keepsakes. It can be crucial to talk with each family member about their feelings and expectations towards certain items in advance. This common knowledge will help your family avoid unnecessary fighting for heirlooms or keepsakes after your death.
It is a good idea to decide if you need to have your family heirlooms or keepsakes appraised. By doing this, you provide your heirs with the necessary documentation to understand the value of each object passed down to them. Plus, you might realize you want to get some of these items insured due to their worth. Handling this before you pass will make it easier for your heirs to go through the mourning process and avoid unnecessary externalities.
There is no proper way to distribute these valuable and irreplaceable items after your death. Of course, these valuables could end up lost or undervalued if they end up in the wrong hands when there is no plan in place for family heirlooms and keepsakes.
Here are some ways to distribute these precious items to your heirs.
Some people prefer to equally distribute heirlooms and keepsakes to their heirs by focusing on each items' monetary value. An estates planning attorney can offer you guidance when understanding the liquidity of each family heirloom and keepsake.
It is important to note more than two of your heirs may desire the same heirloom or keepsake. You can resolve this dilemma before you pass by creating a personal property memorandum. This document is a chance for you to explicitly state your wishes and avoid any conflict that may come after your death.
One benefit to this type of inheritance planning is that a property personal memorandum is referred to as your last will and identifies who is to receive said property. Also, you don't need to execute a new will or amend your trust if you decide to make modifications to which heirs receive these family heirlooms and keepsakes.
You may prefer to gift special items to your heirs before passing away. Doing this could be a consideration if you find enjoyment in seeing how your family reacts to receiving their heirloom or keepsake.
Of course, you don't want to forget the gift tax you may incur after giving any items to your heirs while alive. Furthermore, you may want to consider if you should factor them into what share of your estate your heirs receive after your death depending on their value.
Anderson Dorn and Rader’s attorneys have the expertise and knowledge to help you create an estate plan that considers all your assets. Family heirlooms and keepsakes are just one piece of the puzzle. Define all your wishes for what your heirs receive with an estate plan to help avoid conflict between your heirs later on.
