The process of estate planning involves some very measured and informed decision-making. If you make certain assumptions as a layperson you may be making errors of commission and omission.
Because of the fact that there are websites on the Internet selling do-it-yourself generic, fill-in-the-blanks last wills, more and more people are getting the idea that they can go it alone. Unfortunately, this is increasing the numbers of people who are not properly prepared.
With a will, you need to consider the fact that your estate must be probated before the heirs receive their inheritances. The probate laws in the state of Nevada require rigid formalities that may cause delay and expense if they are not followed precisely.
When you work with a qualified estate planning attorney who is licensed in Nevada you can be certain that your will is properly constructed.
If you use a boilerplate document that you picked up on the Internet or at the book store you have no way of knowing if the will is truly up to par.
And then there is the simple fact that a last will may not be your best choice.
Last Will Alternatives
The probate process that we mentioned above is time-consuming, and, when all the costs, fees and expenses are considered, quite expensive.
There are effective ways to arrange for asset transfers to your heirs directly, outside of probate. One of them would be through the creation of a revocable living trust.
With these trusts you can retain control of the assets while you are alive and well. If you were to become incapacitated, your successor trustee would be empowered to handle your financial affairs, usually avoiding the need for a guardianship.
Upon your passing the trustee administers the estate outside the probate court and then distributes assets to the beneficiaries in accordance with your wishes.
Specialized Concerns
There is no one-size-fits-all estate plan because different families have different concerns. For instance, if you have estate tax exposure you must take steps to position your assets in a tax efficient manner to avoid a 40% hit.
If asset protection is a concern you would implement certain strategies that would not be important if you were not concerned about shielding assets from creditors and litigants.
Special needs planning is a factor for some people. You have to be careful about the way you set aside money for a person with a disability who is relying on government benefits like Medicaid and Supplemental Security Income.
People who are owners of small businesses are going to have estate planning concerns that differ from those who work for someone other than themselves.
These are just a few examples of the unique circumstances that require varied approaches.
Decision Makers
It is also important to include an incapacity component within your estate plan. The courts could, at considerable expense to your estate, appoint a guardian to manage your affairs if you don't take the appropriate action. This guardian may not be someone that you would have chosen.
You can select potential future decision-makers using an appropriate revocable living trust combined with a durable power of attorney.
All these solutions are best handled with a qualified estate planning law firm.
The role of Life insurance is extremely important when considering your estate plan. We would like to highlight three commonly asked questions about the tax implications, and provide the answers to them here.
I have been made aware of the fact that I am the beneficiary of a life insurance policy, and I'm concerned about the tax implications. Will I be required to report the receipt of the proceeds when I file my income tax return?
This is a frequently asked question, and the answer is probably going to be a welcome one. In general proceeds received from a life insurance policy are not going to be looked at as taxable income by the Internal Revenue Service.
I own a number of insurance policies, and my estate is quite valuable. Will the value of the insurance policy proceeds count as part of my taxable estate for estate tax purposes?
Unfortunately the answer to this question is yes. At the present time the estate tax exclusion is $5.25 million, and the maximum rate is 40%. If the sum total of your assets is in excess of $5.25 million, including your life insurance policy proceeds, the estate tax may indeed be a factor.
Can anything be done to remove these policies from my taxable estate?
Yes, it would be possible to place the policies into an irrevocable life insurance trust. However, to satisfy IRS regulations you must live for at least three years after transferring the policies into the trust for the assets to be effectively removed from your estate. There are ways to avoid the three-year wait, but they must be addressed by a qualified estate planning lawyer.
The last will is the most commonly utilized asset transfer vehicle in estate planning. Many individuals assume that this is their only logical option because they are under the impression that trusts only serve the interests of the very wealthy.
In fact, this is not true at all. There are indeed trusts that are created to serve the interests of high net worth individuals. However, some trusts, such as revocable living trusts, don't provide the asset protection and estate tax efficiency that many wealthy people would be seeking.
Revocable living trusts enable asset transfers outside of the probate process. This is the primary reason why people create them.
Probate is a time-consuming process that comes along with some considerable expenses. With a living trust you may save your heirs a considerable amount of time as you avoid probate expenses.
Another one of the pitfalls of probate is the fact that you and your family's personal matters are no longer private. The probate court will be supervising the administration of the estate, and the things that go on are a matter of public record. Anyone could access the probate court records to probe into the business that was conducted during probate.
For various reasons many people would prefer that their final affairs remain private and confidential.
If you'd like to learn more about the value of revocable living trusts we invite you to download our free report on the subject. You can gain access by clicking this link: Free Nevada Living Trust Report.
People who use a last will for their estate plan should be aware of the process of probate and the role of the executor. Probate is a court supervised process to ensure that creditors of an estate are paid and to facilitate the distribution of an estate to the decedent's designated beneficiaries or heirs. During this legal process the court will determine the validity of the will, hear any challenges that may be presented and supervise the administration of the estate.
When you work with an estate planning lawyer to prepare your last will you must choose an executor or executrix. This individual will be charged with the various responsibilities that must be undertaken to administer your estate. The executor, or Personal Representative, should have an ability to manage the administration of assets. Also, the executor will require the assistance of a qualified probate attorney.
We have prepared a report that will serve as a good overview of this process. To access the report we ask you to simply click the link that follows and fill in the form so that you will see on the page:
An Executors Role & Responsibilities
Your estate represents everything that you have worked for throughout your life. And, passing along your legacy to your loved ones will be your final act of giving to those that you care about the most.
This is a very profound act, and it is important to go forward in an informed and intelligent manner when you are making preparations for the inevitable.
It in not unusual for many to lack an understanding of estate planning techniques. Our firm has developed a series of special reports that we have prepared as part of our educational initiative. One of the reports that we are making available at the present time examines the probate process.
You may have heard the term "probate" without having a complete grasp on exactly what it is. If you download this report and take the time to review the information contained within it you will no longer look upon probate as a mystery. To obtain a copy of the report click this link and complete the form that you will see to the right of the page:
Nevada Probate Report
Once you gain an understanding of the probate process you will see why it is important to work with a good estate planning lawyer when you are establishing your estate plan. If you have questions, please contact us at (775) 823-9455 to set up a free consultation.
Part of the estate planning process involves the execution of documents that direct the transfer of assets to your heirs after you pass away. Most people will use either a will or a trust to accomplish this.
Making sure that you have legally binding documents in place is absolutely essential. However, when you are working with an estate planning lawyer to draw up these documents you should consider the matter of postmortem planning as well.
A document can't get up off the desk and take action. The will or the trust is going to provide instructions, but you must also arrange for human beings to make your wishes become a reality after you pass away.
Individuals who express their wishes through the execution of a will must understand the fact that the estate will be passing through the probate process. Your family may not have any any idea how probate works. At least the executor that you chose should have some understanding of the probate process.
A wise course of action may be to make arrangements for the attorney who assists you as you are drawing up your will to act as the probate attorney after your death.
The same thing is true of trust administration. You should instruct your trustee to speak with your attorney about administering the trust upon your incapcity or death. This will help ensure that your fiduciaries will have the legal support that they need to carry out your estate plans for the benefit of your loved ones.
Back in July the actor Sherman Hemsley died at his home in El Paso, Texas at the age of 74. We reported on this a while back and there is now some updated news to share.
A court date wasset for Halloween day in El Paso. The probate court judge has required the individual challenging the estate, Richard Thornton of Philadelphia, to provide the results of a DNA test.
Thorton says that he is Sherman Hemsley's brother by blood. Hemsley left behind a last will leaving everything to Florida Enchinton, who was referred to as his "beloved partner" in the will. Reports indicate that she was also his manager.
Hemsley's body is still being held in an El Paso funeral home and no services can be held until the matter has been resolved by the court. These facts seems to disturb Enchinton more than anything. It should be noted that observers suggest that the value of Hemsley's estate is quite modest.
The probate process does indeed open the door for those who want to challenge the stated wishes of a deceased individual, and as you can see from this case it can be quite time-consuming.
There are however things that can be done to avoid probate and arrange for future asset transfers in a private, confidential, and direct manner.
If you would like to gain an understanding of probate avoidance strategies as you plan your own estate, don't hesitate to pick up the phone to set up an appointment to speak with a qualified Reno NV estate planning lawyer.
Imagine living with someone for 10 years as a committed partner. Your partner is diagnosed with a terminal illness and he or she creates the Last Will making you the executor and the sole heir. You have known this individual for 20 years and you have been made aware of the fact that he or she has never been married and had no children.
After your beloved one passes away you will be grieving and anxious to take care of final arrangements in accordance with the wishes of the decedent. This is the situation that a woman named Flora Enchinton experienced recently. She was the partner of the recently deceased actor Sherman Hemsley. He was the individual who portrayed the character George Jefferson on the classic television sitcom The Jeffersons.
Hemsley apparently lived a simple life. He resided in El Paso, Texas with Enchinton and this is where he died. He reportedly had a much different personality than that of his on-screen alter ego. Hemsley was a shy, quiet, and unassuming man who had no interest in publicity or attention.
Flora Enchinton is being forced to deal with a difficult situation. The estate is being challenged by a Richard Thornton, who contends that he is the actor's brother. For some reason Thornton thinks that he is entitled to the assets that Sherman Hemsley accumulated throughout his life.
Because of the realities of probate law the court must hear his arguments and they are doing just that. As of this writing the body of the late actor is being held at the funeral home, and needless to say this is a source of great dismay for Flora Enchinton.
There are numerous reasons why people choose to avoid probate when they are preparing their estate plan. The one that is most commonly cited would be the fact that probate is time-consuming, taking up to a year in simple cases and several ears in more complicated situations.
Probate also comes with some significant expenses including probate proceedings in each states where property of the estate is located. This would be another motivation that would compel many individuals to look for ways to transfer assets to their loved ones outside of probate.
There is however a third very good reason to consider the implementation of probate avoidance strategies. The process of probate is an open proceeding that takes place under the supervision of the probate court. Court records are accessible to the general public. As a result, all the details of the administration of your estate would be available to anyone who wanted to take the time to do the research.
Probate and all of the various pitfalls that go along with it will not be a factor if you arrange for the transfer of your assets througha revocable living trust rather than a last will. This is a very popular otion today even for those who would not consider themselves wealthy. If you are interested in creating a revocable living trust the first step is to discuss your options with a licensed and experienced Reno estate planning attorney.
Many of us grew up listening to “The Monkees” and watching their comedy sketch shows. Many of us remember the introduction to their television show (“Hey, hey, we’re the Monkees, and people say we monkey around . . .”)
The Monkees were so popular with teenagers, especially female teens, that the term “Monkeemania” was coined to describe the mania displayed by teenage fans. Davy Jones was probably the most famous of all the Monkees. Jones went on to pursue a successful solo musical career and acting career.
Davy Jones died on February 29, 2012 at age 66 of a heart attack. He left behind several children and his third wife. Jones married his third wife only a few years before his death. However, sources say that he may not have included her in his most recent will. According to news sources, Davy Jones last revised his will in 2004, several years before he married his third wife, Telemundo actress Jessica Pachecho. When they wed, Jones was 63, while she was only 32.
Unfortunately, we may never find out the details of the famous Monkee’s probate records because of the unusual decision by a Florida probate judge to grant a motion to seal the singer’s records filed by his eldest daughter.
In the United States, a decedent’s estate is potentially subject to an estate tax upon death. Whether or not the estate tax will apply, and the rate at which the estate will be taxed if it does apply depends on the laws in place at the time. For many years, an estate has been allowed an exemption amount from the estate tax. This means that each estate may have assets valued up to the exemption amount before the estate tax kicks in. After that, the estate will be taxed at the current estate tax rate. As of 2012, the exemption amount is $5.12 million and the estate tax rate is 35 percent; however, those are both set to change for 2013.
The current exemption amount is at an historic high. Just a few short years ago the lifetime exemption amount was set at $1 million. The legislation that raised the exemption amount to the current $5.12 million limit is set to expire at the end of 2012. Congress basically has three options--extend the current exemption limit; create a new exemption limit; or do nothing. If Congress fails to act, the exemption amount will go back to $1 million. Likewise, the current estate tax rate of 35 percent is historically low, but will also return to the rate of 39 - 55 percent unless Congress acts before the end of the year.
So what does all this mean to you? The average person will not be impacted at the current exemption limit; however, if the limit is reduced to $1 million, even a relatively modest estate could face estate taxes upon death. Talk to your estate planning attorney now so that you can make any necessary changes to your estate plan so you are prepared no matter what congress and the President may do.
When you lose a parent, it can be one of the most emotional times of your life. Despite the grief, there will be estate administration matters that must be addressed. If a decedent leaves a Last Will it will be admitted by the Court for a probate process. If the decedent died without a Last Will or living trust the estate will go through a similar probate process. Although each state has slightly different procedures and rules, there are a few common things you should know that may help you understand the process and determine whether your parent’s estate must be probated.
If a Last Will was not found, then the laws of intestacy of the state with jurisdiciton over the estate will be applied. If a Last Will was discovered then the estate will distribute to the beneficiaries identified in the Last Will. The size of the estate and the type of assets involved often impacts what type of probate process is required.
Nevada offers a form of less formal probate know as a set-aside administration for uncomplicated estates valued at less than $100,000. Although a Court hearing is required, this process can usually be accomplished in a matter of weeks.
A more formal probate process will be required those estates with values exceeding $100,000. This process will take months and sometimes years to complete and can cost the estate a significant amount of money. Some assets, such as life insurance proceeds or retirment funds, which already have beneficiaries identified, may not have to pass through probate.
Contact a qualified estate planning and probate attorney to learn more about the probate process.
A trust is often used as an estate planning tool in order to accomplish a variety of goals. At its most basic, a trust consists of a grantor (sometimes called a settlor, or trustor) who establishes the trust, a trustee who administers the trust assets, at least one beneficiary, and assets to fund the trust. Often, all three positions -- grantor, trustee and beneficiary -- can be held by the same person. Beyond that, trusts come in numerous forms that range in complexity; however, one simple distinction centers around whether the trust is revocable or irrevocable. Understanding some of the important features of the two options can help you decide which one is right for you.
All funded trusts, including the revocable trust, avoid probate. What this means is that the funds held in the trust are not required to pass through the often lengthy legal process that follows the death of the grantor, making the trust benefits available to the beneficiaries in a much more timely fashion. A much more important aspect of a revocable trust is that a revocable trust, as implied by the name, can be revoked, amended or modified by the grantor at any time. This feature can be very important if you feel that you may wish to change the beneficiaries or the specific terms of the trust at some future point. This flexibility makes a revocable trust an attractive option for most people.
An irrevocable trust cannot be revoked, amended or modified without court intervention in most states. Under most circumstances, the grantor may not be the trustee or the beneficiary. All control and access is delivered to an independent trustee and a third party beneficiary. What the grantor receives, however, for giving up the ability to control the trust is asset protection, probate avoidance, possible estate tax avoidance and potential income tax and, when the beneficiary is a charity, capital gains tax advantages. These are highly complex strategies and must be entered into with appropriate caution. The expertise of a qualified estate planning attorney should always be sought.
When you create a trust, one of the most important decisions you must make is who to appoint to succeed you as your trustee. Although each trust is unique, there are some basic considerations that you may wish to take into account before making a decision regarding the appointment of a trustee.
When you start to do some research into the topic of estate planning you will invariably see frequent mention of probate avoidance strategies. For people who deal with these matters professionally the term speaks for itself, but the layperson has no particular reason to know what probate is much less why you might want to avoid it.
Probate is the legal process that an estate must pass through before assets can be distributed according to the will of the deceased. If there is no will, the laws of your state determine how assets will be distributed. In the will you nominate an executor or personal representative. That person, or if there is no will, the person who desires to serve as personal representative, is required to present the court with a petition to be appointed. Once the court makes the appointment, this person is responsible for actually administering the estate, but he or she does so under the supervision of the probate or surrogate court.
The reasons that some people choose to implement strategies that enable probate avoidance are usually twofold. For one, there are a number of expenses that go along with probate. There are court costs, attorney fees, personal representative fees and bond fees. In addition, the final taxes of the deceased must be paid so an accountant is often necessary, and sometimes there are appraisers that must be paid as well as estate liquidators.
The other primary reason why probate avoidance strategies can be attractive is that probate can be time consuming. Depending on the complexity of the estate it can take anywhere from several months to several years for the estate to close. And of course, the heirs do not receive their inheritances until the probate process has been completed.
All of this having been said, probate serves a useful purpose. If anyone wants to contest the will or present an alternate will, they would do so in probate court. Consider a scenario when an octogenarian marries a twenty-something and then passes away three months later with a new will leaving everything to his new spouse. You can see how this person's children might be grateful for the opportunity to address the court.
Plus, even in uncontested cases, the supervision of the probate court ensures the transparency of transactions made on behalf of the estate by the executor. For some families, this additional protection is worth the extra expense and time of the probate process.
When you start to look into the subject of estate planning you see a lot written about employing strategies that are intended to help you avoid probate. Unless you are in the field you may not know exactly what probate is and why you might want to avoid it, an explanation may be in order.
Probate is the legal process that the typical estate has to pass through, and it is supervised by the probate court. The court must determine the validity of the will, and it is the venue within which any claims against the estate are heard. So if you wanted to contest a will or attempt to collect a debt owed to you by the deceased, you would do so in probate court.
There are two primary reasons why some people would prefer to avoid the process of probate. One of them is that it is expensive and it can reduce the value of your estate by anywhere from 2-7% depending on the specifics of your situation. There is a fee that must be paid to the court itself, and the personal representative of the estate is going to have to retain a probate lawyer, who will of course charge a fee. In fact, the personal representative is entitled to a fee as well, and he or she may have to bring in an accountant to assist with tax matters and an appraiser of assets as well as an estate liquidation company. All of this adds up.
Aside from the expense involved in the probate process, it is also time consuming. Depending on the size and scope of your estate and whether or not any aspect of the will is contested, it can take anywhere from six months to multiple years for the process of probate to run its course.
As you can see, there are some significant pitfalls that go along with the probate process, and this is why so many people are interested in doing whatever may be possible to avoid it.
Probate is the court administered process by which a decedent’s final affairs are publically settled. During this process an executor is appointed, the estate is inventoried, debts and taxes are paid, an accounting is rendered and property is finally distributed to the beneficiaries. Not all estates require probate. So, when is probate necessary?
Sole Property Ownership
If any of your property is titled solely in your name or if you have an account where you have not listed a beneficiary, that property must be probated to pass to your heirs. If property is titled in the name of a Trustee of a trust, it can pass to your heirs outside of probate. If you do have a Revocable Living Trust, but some property is left out of the Trust at your death, probate will be required to transfer ownership of those items to your Trustee.
Tenants in Common
If you own an asset as a tenant in common the other tenants in common will not receive your share of the property upon your death as with joint tennacy. Instead probate will be required to pass your interest in the asset to your heirs.
Will
If a beneficiary deceases testate, or leaving a Will, the estate will necessarily be subject to a probate pprocess.
No Valid Will
If you pass away without making a Will you will have died intesteate. This means state law will determine the heirs of your estate. Probate will be necessary to name your estate executor and to decide your proper heirs.
Probate can be a frustrating, time consuming, expensive process that is controlled by the Court through a publioc process. This process can be avoided by the use of a Revocable Living Trust. Your designated Trustee can privately administer your estate in an efficient and cost effective manner preserving your hard earned estate for your loved ones avoiding unnecessary delays and administrative expenses.
If you or a loved one passes away without a valid Last Will and Testament, intestacy laws (sometimes called succession laws) will be used to settle your estate. These laws are unique to each state and determine who inherits property when no Will is available to make the decision.
If you do not create a Last Will and Testament or your Will is deemed inadmissible by a court of law, all property in your state of residence and any real property located in other states will be subject to a court supervised probate proceeding in each state. The court will apply the laws of intestacy relative to its state of jurisdiction.
Intestacy laws not only establish who inherits, they also decide how much each person receives. When laws from multiple states affect an estate, different heirs may inherit the property in each location. In some cases, heirs you would have liked to include may receive nothing or heirs you would not have liked to include will receive an inheritance.
Whether you decease with a Will or intestate probate proceedings will be required. The court will appoint a personal representative or executor or executrix to administer your estate. The personal representative will work with an attorney to determine what assets are subject to probate and who the beneficiaries or heirs will be in each state where a probate may be required. This can be a lengthy process. During this time, family members may not agree on decisions made by the personal representative, which can slow the process down further.
Probate is a costly procedure. Costs include court costs, attorney fees, personal representative fees, publication fees, appraisal fees, tax preparation fees and real estate agent fees to name a few.
If you live in Nevada, get in touch with Anderson, Dorn & Rader, Ltd. to learn about Nevada intestate succession. To avoid the concerns that are created by intestacy laws, it is recommended that you work with qualified estate planning attorneys to create a Last Will and Testament. To avoid the costs and inconveniences of probate altogether, ask a your attorney about the benefits of a trust.
