Most of us assume that anyone worth millions of dollars would certainly go to the trouble of creating a comprehensive estate plan, or at the very minimum a Last Will and Testament. As with many assumptions, that one would be incorrect. A surprising number of the rich and famous have died intestate, or without leaving behind a valid Will, including the following:
Sonny Bono: Best known early on as half of “Sonny and Cher”, Bono later went on to become the mayor of Palm Springs, California and a member of the U.S. House of Representatives before dying in a tragic skiing accident in 1998. Bono did not leave behind a Will. Shortly after his death, his wife and mother became embroiled in a legal battle over Bono’s estate.
Steve McNair: The NFL star was shot and killed by an alleged girlfriend at the age of 36. McNair left behind a family and a fortune, but no Will.
DJ AM: Although this name may only be familiar to those of a certain age group, the famous DJ died of a drug overdose in 2009 without having executed a Will prior to his death.
Howard Hughes: The eccentric billionaire who was worth in the neighborhood of $2.5 billion when he died in 1976 failed to leave behind a Will. Although one was produced after his death, it was later determined to be a forgery. Eventually, 22 cousins inherited Hughes’s fortune.
Pablo Picasso: The famous artist died at the age of 91 leaving behind homes, cash and artwork valued in the millions, but did not leave behind a Will. Six years later, at an estimated cost of $30 million, his estate was settled.
You may not be famous or rich, but if die intestate you leave the problems for the courts and the state to decide. It leaves children unprotected, special people in your life disappointed and causes undue financial expense on the estate.
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.
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.
When you pass away, your estate must be settled. If you have an estate plan, such as a trust or will, then your assets will be distributed in accordance with your estate planning documents. It is called “intestate succession” when you don’t have a trust or will when you pass away. Your estate will be distributed according to the laws of the state of your residence and any other state where you might own real estate.
Now, before you start thinking this might not be so bad, consider this:
When you die intestate, you have no say over how your assets are distributed or who will oversee the process. With a will, you may designate an executor, someone you trust to ensure your estate is properly administered and that your assets are divided up the way you want. This process is overseen by a court and is known as a probate. A trust works in a similar way allowing you to designate a trustee to oversee the process except that a court is generally not involved maintaining the privacy of your beneficiaries.
But in the absence of a will or trust, the court will appoint a personal representative to oversee your estate. This person will be responsible for not only distributing your assets but also settling any outstanding debts and selling off assets if there’s not enough funds in the estate.
That means that some of your most treasured heirlooms – the baseball card collection, the antique grandfather clock or your great-grandmother’s sterling silver tea set may very well end up being sold in an auction rather than in the hands of your loved ones. And of course, you won’t be around to stop it.
To learn more about the dangers of Nevada intestate succession and to create your own estate plan to prevent this from happening, contact the estate planning attorneys at Anderson, Dorn & Rader, Ltd.