Upon the death of a loved one, great emotional sadness sets in as family and friends support each other during this time of loss. After finding a firm emotional foundation, it is time to address the task of administering the estate set up by the deceased.
Included below is a brief list of the actions which you or your Personal Representative and Trustee should take immediately upon death. (Many of these actions may similarly be required in the event of incapacity). This is not intended as an exhaustive or detailed explanation of all actions which should be taken. Rather, it is for use as a checklist to help the appointed representatives step in and handle as expeditiously as possible those items which demand immediate attention.
If you have answered ‘YES’ to any of these questions, it is a good idea to schedule a Nevada estate planning appointment.
Feel free to make an appointment with our firm to review your estate plan.
When you are being introduced to the benefit program at your first “real job,” you typically get initial exposure to a couple of long-term planning concepts that you may have never considered before. Most packages come with a certain level of life insurance, and you can typically participate in a 401(k) plan to save for retirement.
In many instances, the employer will match your contributions up to a certain percentage. This is nothing more or less than free money that you can receive on a sustained basis for decades if you stay with the same job. You absolutely must take advantage of this golden opportunity.
Many people will plan their retirement with the knowledge that they are going to extract money from their retirement savings account to fund their golden years. This is what it’s all about in general, but if you never need the money, an IRA can be quite useful from an estate planning perspective.
Generally speaking, there are two different types of individual retirement accounts that are utilized: traditional accounts, and Roth IRAs. There are some similarities, and there is one major difference between the two of them. First, we will look at the aspects that are the same.
You cannot withdraw money from either type of individual retirement account without being penalized until you are 59 ½ years old. However, there are a handful of exceptions to the rule. If you are buying your first home, you can extract up to $10,000 to assist with the purchase.
Under the rules governing individual retirement accounts, you can pay school tuition with assets in the account without incurring any penalties. If you have non-reimbursed health care expenses that exceed 7.5% of your adjusted gross income, you are not penalized if you pay them with funds from the account.
Now we can get into the differences. The contributions that you make into a traditional account are not taxed, and this reduces your taxable income. This is a positive when you file your returns, but it all comes back around full circle when you take distributions.
The withdrawals are subject to regular income taxes, and you don’t have the luxury of keeping the money in the account untouched for the rest of your life with estate planning in mind. Because the IRS wants to start getting their cut at some point, you are forced to take mandatory minimum distributions when you are 70 ½ years old.
With a Roth IRA, you pay taxes on the income before you contribute into the account. You do have to wait until you are 59 ½ years old to avoid penalties, but the distributions are not taxed.
The Internal Revenue Service does not require you to take mandatory minimum distributions at the age of 70 ½ or any other age, because they don’t have to try to retroactively collect taxes.
Because of the nature of Roth IRAs, they can be used quite effectively in an estate planning context. The beneficiary (assuming it is not your spouse) would be required to take mandatory minimum distributions upon assumption of ownership of the account. This being stated, the word “minimum” is quite operative here.
The minimum that is required would depend upon the age of the beneficiary; a younger beneficiary could take less than someone that is older, because it is about life expectancy.
Assets in the account will grow consistently if the economy is functioning, so it is wise for the beneficiary to take only the minimum to maximize the tax-free growth for as long as possible. Whenever distributions are taken, they would not be subject to taxation.
We have provided a basic explanation of this concept here, and there is another resource that you can access through this website that takes it to another level. Our firm has established a library of special reports that cover many different estate planning topics. One of them is devoted to this topic, and you can click the following link to gain access: Estate Planning With IRAs.
For a lot of people, estate planning is simply a matter of slicing up a pie. You decide who will have a seat at the dessert table and how large the respective slices will be for each individual. In a very basic sense, there is truth to this, but there is much more to take into consideration if you want to plan your estate effectively.
First, you have to recognize the fact that there are different types of “pies” as it were. The way that assets are distributed if you use a last will is different than the process if you decide to go with a revocable living trust, or another type of trust. You should certainly explore all the options so that you can make fully informed decisions.
Arranging for the asset transfers is a large part of the equation, but you should also consider the estate administration process that will unfold before the assets can be distributed to the heirs. Gaining an understanding of the different possibilities could definitely influence your perspective.
With the above in mind, we will look at the potential for inheritance disputes that can enter the picture after you are gone if some people are not going to be happy with the decisions that you have made.
When a last will is used as an asset transfer vehicle, the executor would be the estate administrator. This person or entity is not permitted to act in a vacuum. Under the laws of the state of Nevada, the probate court must provide supervision during the administration process.
The estate will remain open while it is being probated for the better part of a year. During this interim, anyone that feels as though there must be some problem with the decedent’s will can come forward and contest the validity of the will.
It is not easy to convince the court that something is amiss, but in some instances, compelling evidence is presented. The thing that is relatively simple is the ability to issue the challenge in the first place. This is one of the drawbacks of probate, but there are others.
If you use a living trust instead of a last will, there is no readily available window of opportunity for people that may want to issue challenges. This is something to think about if you do have concerns about how someone will react to your distribution decisions.
A disgruntled party could file a lawsuit under these circumstances, but it would be complicated and expensive. Plus, you can provide a powerful disincentive when you create the trust declaration. A no contest clause can be included, and this would trigger the total disinheritance of any beneficiary that sues to challenge the trust terms.
Most people keep their monetary affairs close to the vest throughout their lives, and they don’t have a conference call with everyone in the family every time they make a financial decision. This is understandable, and you can apply the same principle to your estate planning efforts.
The final decision is yours, but the dynamic is quite a bit different than it is during your life when you are handling your personal affairs. This financial matter involves everyone that would expect to receive an inheritance, so your choices are impacting them quite directly.
If you know that someone is going to be very displeased, you may want to have a conversation with this person in advance. Clearly, this is not always going to be the way to go, but it is something to seriously consider. While it is true that you will not be around to experience the blowback, other family members will be in the crosshairs.
In a perfect world, you would probably like your surviving family members to maintain good relationships with one another and provide support when they can. When someone feels slighted and isolated from the rest, there can be ongoing resentment that never goes away.
We are holding a number of Webinars in the near future, and you can learn a great deal if you attend the session that fits into your schedule. There is no charge at all, and you can see the dates and obtain registration information if you visit our Reno estate planning Webinar page.
When we consult with clients, we often hear many of the same questions. With this in mind, we present a hypothetical question-and-answer session with a Reno estate planning lawyer in this post.
To die without an estate plan is called dying intestate. Under the rules of intestacy, the probate court would supervise the administration of the estate. Creditors would be given an opportunity to come forward seeking satisfaction, an estate is inventories and valued, disputes are resolved, and ultimately the assets would be distributed under intestate succession laws.
That’s the good news, but the bad news is that it is very possible that your assets would not be distributed in accordance with your wishes. For example, if you are happily married, you have no children, and your parents are still living, you would probably want your spouse to inherit everything. In Nevada, under intestate succession rules, your spouse would inherit half of your separate property, and your parents would inherit the rest. Intestacy law does not appropriately deal with most issues that arise with separate property. Further, intestacy law does not account for many modern day families, such as blended families with step-children, non-traditionally married couples, and a myriad others.
There is no reason to surrender control of your estate to the judicial process when it is so easy to engage the services of a licensed Reno estate planning lawyer.
It is true that there are some types of trusts that are used by high net worth individuals that are exposed to the federal estate tax. However, there are other types of trust that can be quite useful for people of relatively ordinary means.
Far and above the most common is the revocable living trust. If you use a last will, it would be admitted to probate after you die. The court would provide supervision, and the executor would handle the estate administration tasks. But this process will take eight or nine months to a year to run its course, and inheritors receive nothing during this interim. There are also innumerable expenses that pile up during probate, often at a cost between 4% up to 8% of the estate value.
If you use a living trust instead, the trustee that you name in the trust agreement would be empowered to distribute assets to the beneficiaries outside of probate. This is one advantage, but there are a number of others, including the option to protect an inheritance through a trust against lawsuits, creditors, divorcing spouses, or other predators.
A living trust is beneficial whenever a client has a goal to avoid probate and make the process easy for their loved ones. It's not only for wealthy people, but for people who want to better take care of their life planning.
Since the Internal Revenue Service requires you to report all sources of income, you may assume that inheritances that you leave to your loved ones would be taxed. In actuality, inheritances are not subject to taxation, with the exception of inheriting retirement accounts (such as traditional IRA or 401(k) accounts).
There is, however, a federal estate tax that might apply to your estate before everything is distributed to the beneficiaries as an inheritance. But, the vast majority of people do not have to be concerned about the estate tax because there is a VERY large exclusion. Only the portion of your estate that exceeds the amount of this exclusion would be taxed. At the time of this writing in 2019, the exclusion stands at $11.4 million.
These are a few short questions that we frequently hear from our clients, and you can ask your own if you attend one of our upcoming Webinars. The information sessions that we hold provide a treasure trove of useful information, so we strongly encourage you to attend the Webinar that fits into your schedule. To get all the details, visit our Webinar page and follow the simple instructions to register for the date that works for you. Starting in 2019, we are offering Webinars semi-monthly in the evening to accommodate those people that cannot attend during the middle of the day.
Some need the money and postpone retirement or get a part-time job; others simply have the urge to keep busy in some constructive way during retirement and choose to do some type of work.
These days financial planning experts often write about the value of working longer. This can be necessary if you simply need more time to accumulate the resources that you need to retire. Others who don't absolutely have to work choose to do so because they want to have plenty of discretionary income so they will never be pinching pennies. Some simply feel the need to remain productive.
When you think about working during what would otherwise be retirement you can expand your vision; you are not limited to what you have been doing throughout your career. There are many different ways that you can make money from the comfort of your own home from freelance opportunities within your areas of expertise to maintaining an online store.
You could also consider going into business for yourself outside the home in a store or office. Many people incorporate their passions into a business later in their lives, such as a flower shop or a restaurant.
It is certainly nice to have a source of significant income going into your retirement years to make your Social Security benefit more of a supplement and less of a staple. You are in fact allowed to earn any amount of money while receiving Social Security without being penalized once you reach the age of full eligibility.
If you look ahead and take the appropriate steps you can potentially step right into your own business and work a bit on your own terms during your retirement.
It is said that there are some things that money can't buy, and wisdom would certainly be one of these things. When you are planning your estate your primary concern is going to involve our valuables. However, you may be able to pass on your values as well by maintaining a blog during your retirement years.
A lot of people have an interest in writing their memoirs once they have the time to devote to the project. This is a great way to share formative experiences with people that you care about. There is no substitute for learning by experience and some of these stories may be very instructive to the people that you will be leaving behind.
But what about publishing? And what if you don't finish the book prior to your passing?
There is a very simple solution these days in the form of self publication on your own blog. You can actually start your own blog without having any particular technical expertise by using very user-friendly platforms that are offered on sites such as WordPress.org.
When you have your own blog you can publish your work incrementally as you see fit so your family and friends can always have something new to read if you are updating it regularly. If you work on your blog throughout your retirement years you will have assembled a significant body of work by the time you pass away.
While it will forevermore exist in cyberspace, most blog sites provide a publication service, so you can print off a book of your blog. Now family members and even future generations of your family can draw from your experiences into perpetuity. There is no time like the present, so get started!
If you are like millions of Americans, you probably own at least one pet. Have you taken the time to consider what will happen to your pet when you die? If you haven’t, now is the time to do so before it is too late.
When you die, your assets will all be secured until your executor or personal representative has the chance to inventory them and file the proper documents with the probate court. But what about your pet? Someone needs to look after your pet immediately after you die. A well meaning loved one may step in for a few days, but what happens after that? Who will pay for his or her care? Sadly, thousands of cats and dogs end up in shelters each year because their owner failed to make plans for the animal in the event of their death. You can ensure that your beloved pet is not one of these animals by creating a pet trust.
A pet trust takes all the guesswork out of your pet’s future after your death. Not only can you appoint a trustee whose job it is too ensure that the pet is well cared for, but you can also leave behind sufficient funds that are earmarked just for your pet to cover the cost of his or her care. Don’t take any chances with your pet. Take the time now to create a pet trust and give both you and your pet some peace of mind.
Anyone who owns a pet knows the love that can be shared between a human and an animal. Not surprisingly, many people want to make sure their pet is properly cared for in the event of their death in the same way they want to make sure family members are taken care of financially. One way to do that is to create a pet trust. Although a pet trust is a wonderful estate planning tool, be sure that you do not create a probate nightmare as a result of the terms of your pet trust as did the late Leona Helmsley.
For anyone not familiar with the story, Leona Helmsley was a New York hotel heiress who was known as the “Queen of Mean”. Upon her husband’s death, Helmsley bought a Maltese puppy whom she named Trouble. Trouble was an apt name as it turns out.
Helmsley created a pet trust for her beloved pooch and designated a whopping $12 million to fund the trust. As if this excessive amount was not enough to raise the attention of the probate court charged with overseeing her estate upon her death, she also disinherited many close family members, including some of her grandchildren. After a lengthy court battle, the trust was decreased by the court to $2 million and Trouble lived out the rest of his life in luxury.
Given Helmsley’s reputation, it may actually have been her intention to cause a probate battle upon her death; however, most people strive for the opposite--an estate free from challenges and lengthy probate battles. If your goal is to be sure your pets are cared for, by all means fund the trust with sufficient funds to care for your pet after your death. In most states that authorize a pet trust, there is a provision that requires the principal of the trust to be a reasonable amount. This opens the trust to challenge in a court if the remaining beneficiaries consider the amount you have specified to be unreasonable. Take a lesson from Leona - steer clear of an excessive amount that begs for an estate challenge to be filed.
Have you considered who would manage your financial afffairs if you became incapacitated? Married couples are sometimes under the impression that their spouse will automatically be given access to all the assets. This may not be the case. Assets that are titled jointly may be easily accessed but that is not always the case. Take for instance real property that is jointly titled. If the well spouse desired to refinance, obtain a secured loan or sell real property that is jointly owned a legal representative would have to be appointed to sign in behalf of the incapacitated spouse. A power of attorney may not adequately authorize an agent to handle these transactions. Then there is the issue of a retirement account or pension benefits solely in the name of an incapacitated spouse. In these cases, the well spouse, child or parent woul likely need to seek a court’s permission to access your assets taking a significant amount of time and money.
Often, when someone becomes incapacitated, assets that are needed by loved ones to maintain the household or pay bills are inaccessible when most needed. Even worse, a dispute can arise as to who should manage the assets which can prolong the process of obtaining a court order.
There are, however, a variety of estate planning tools that can be used to avoid the need for court intervention. Executing a comprehensive durable power of attorney or creating a revocable trust may also be viable options. With just a small amount of pre-planning on your part you can avoid a lengthy and costly court process in the event of your incapacity.
Once the world began to get over the shock of the death of music legend and golden girl Whitney Houston, reports began to surface that there was trouble brewing with regard to her estate. Houston was found dead in her Beverly Hills hotel room at the age of 48 and left behind only one heir -- 18 year old Bobbi Kristina. While fans rushed to buy anything related to Houston, Houston’s family was already poised for a fight over her estate with Houston’s ex-husband Bobby Brown. With the news this week that Houston left behind a trust, everyone in Houston’s camp can breath a sigh of relief.
Despite unprecedented success in her professional career throughout the 90s, Houston was plagued with personal problems as a result of a battle with drug and alcohol addiction as well as a stormy relationship with Bobbi Kristina’s father, singer Bobby Brown. After finally divorcing Brown in 2007, Houston appeared to be on the road to a comeback when she was found dead last month.
While Houston’s daughter is of age to inherit directly, she allegedly battles her own issues with drugs and alcohol, making her susceptible to a claim that she is unable to handle her own finances and in need of a conservator. Houston’s family was reportedly worried that Brown would petition a court to become her conservator, effectively gaining control of Houston’s fortune. Houston, however, apparently thought ahead and created a trust for Bobbi Kristina. By creating a trust, Houston put a stop to any attempts to gain control of the money and put control of the money in the hands of someone she hand picked as trustee.
We all leave behind a legacy when we die -- what your legacy is depends on how much time and effort you put into creating it prior to your death. You don’t have to have a vast fortune in order to create a legacy plan; however, the wealthier you are, the more important it is to create a legacy plan that is consistent with your objectives.
A legacy plan is your chance to elaborate on your basic estate plan. Your basic estate plan allows you to determine who will receive your assets when you die. A legacy plan allows you to ensure that those assets are preserved for generations to come and/or allows you to continue contributing to causes that have meant something to you during your lifetime. Without a legacy plan, your wealth may be significantly reduced by various taxes levied on your estate at the time of your death. In addition, you will lose the opportunity to direct how your wealth will be managed after your death.
A legacy plan often incorporates trusts and other estate planning tools that can allow you to direct how your assets will be used for generations to come. A generation skipping trust, for example can provide income for your children and ensure that assets are preserved for your grandchildren. A charitable trust can be created to provide a mechanism for you to continue to support a cause that was important to you during your lifetime long after your death. Start planning now so you can create a legacy of which you can be proud.
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.
Owning a dog is rewarding in a number of different ways, and for seniors a dog could provide a very welcome companion at a time when loneliness can be an issue. There is no replacing your family of course, but for many people, dogs are indeed man's best friend. You may find that a canine in the household will uplift your mood and perhaps even provide you with protection.
If you are a dog owner you should consider who would be caring for your pet if you were to pass away before the animal. This is obviously a serious consideration for senior citizens who own pets, but it is also important for anyone who owns an animal just as a precaution because life is uncertain at any age.
Your first task is going to be choosing a capable caretaker. It is very possible that a particular person will immediately come to mind. You may have a friend or family member that knows the pet well and who already has somewhat of a relationship with the animal.
Once you determine who would become the pet's caretaker in the event of your death you have to consider the financial side of things. You can provide financial resources to the caretaker by giving this individual a direct inheritance earmarked for the pet's care. A better option, however, would be to create a pet trust for the benefit of your dog. Doing so will keep your pet from becoming a burden to those left to care for it.
If you have any questions about pet planning, simply take a moment to arrange for a consultation with a good Northern Nevada estate planning lawyer.
A recent article in Forbes, quoting statistics provided by the Harris organization, found that out of 1022 people polled only 35% had executed a last will. Among younger Americans the figure was even lower as you might expect, with just 24% of the people who participated in the survey, under the age of 35, had executed either a last will or a living will.
Estate planning is an area where procrastination not only puts that person at risk it also puts there loved ones in a difficult position in the event of death or disability.
Most younger families rely on earned income to maintain quality of life. For this reason, it is essential that such families have an income replacement vehicle. This need is often met through life insurance. Coverage should be revisited as financial responsibilities increase. All families are well advised to implement a sound long-term financial plan. If this sounds like a good idea to you, take the first step and arrange for a consultation with a licensed and experienced Reno financial planning attorney.
The dictionary definition of the word "legacy" will tell you that your legacy involves gifts of property and monetary assets after your passing. This is of course a large part of it, but there could be more to shaping your legacy than simply arranging for the passing of your assets to your family members.
Depending on your resources exactly how you go about this can vary considerably. There are those who will make a donation that is specifically used to finance some type of building project. This may carry your name into perpetuity, which can be quite rewarding for many people.
Some people will leave behind the resources to provide a scholarship or scholarships to worthy students. This too can be an enriching portion of an individual's legacy.
You can also choose to pass along the wisdom that you have acquired throughout your life by committing your experiences to writing. Some people choose to write a full-blown autobiography and leave it behind for future generations to draw from. Others will author an ethical will that passes along their moral and spiritual values. Today, there are many resources to assist in writing an interesting personal history that can be found online or in bookstores. The same is true of writing an ethical will.
Carefully selecting certain family heirlooms and/or personal possessions and handing them on to particular respective heirs for specific reasons can also be part of a carefully planned legacy.
There are many possibilities to take into account when you are preparing for the latter portion of your life and your eventual death. If you're interested in taking estate planning to a higher level, don't hesitate to get in touch with a Northern Nevada legacy planning attorney to arrange for an informative consultation.
