Many Northern Nevadans know the dangers that come along with this time of year. A 2019 statistic showed that 17% of all accidents happen during winter conditions, highlighting an increased chance for individuals to experience an accident due to extreme weather changes. Ultimately, no matter how long you’ve lived in the region, less sunlight, alongside rain, snow, and black ice creates challenges for anyone driving on the road. While no one ever thinks they will fall victim to an accident, knowing what to do after a fender bender is crucial to ensuring a headache-free experience.
Following these guidelines can help you document the incident calmly and efficiently.
While many people believe there is no reason to immediately report minor accidents, following these steps avoids unnecessary complications and significant penalties down the road.
If an accident occurs making you unable to speak or communicate decisions clearly, you will need to have someone talk to medical professionals on your behalf. This should be a previously planned and trusted individual who would be deemed your medical power of attorney. This person will arrange treatment with doctors until you regain consciousness, so it's crucial you've assigned this power to someone. Your medical power of attorney will expedite medical treatment in the case of an emergency. Furthermore, your medical power of attorney should know where to obtain a copy of this documentation to help expedite treatment.
Opting for minimum coverage can be detrimental to your savings and property in the event of a serious lawsuit. You and your car must be fully covered to prevent this from happening. Plus, you should speak to your insurance broker to find out if umbrella insurance makes sense for you. Umbrella insurance is a low-cost way to gain extra liability coverage and protect yourself from damages that may exceed the limits of your car insurance. Umbrella insurance ensures you have access to a bigger pool of money in the event of a car crash lawsuit against you, protecting your savings and future prosperity.
After a car accident with significant property damages and medical injuries, it may feel necessary to protect your assets from excessive lawsuit demands. You may attempt to do this by transferring funds to friends and family, but be careful because this is against the law in some states. These transfers used to protect assets won’t be ignored by the courts. If considered fraudulent, court judges have the full right and power to reverse transfers. This means that these assets can be obtained by the party in the event of a successful lawsuit against you even after being gifted to a friend or family member.
Revocable trusts are used to protect your assets and trust from creditors and lawsuits after your death. Unfortunately, while some people believe that these trusts protect their assets during their life, this is a misconception and not their design. These trusts fail to completely protect your assets because you have complete control of all assets placed in a revocable trust. Your ability to control these trusts means a judge can order you to revoke the trust to pay creditors and lawsuit judgments.
However, with the guidance of an experienced asset protection and estate planning attorney, you can use properly designed strategies to enhance protection for your assets and property. That means taking the time to sit down with an experienced attorney well before an accident occurs offers you the best chance to maximize asset protection for your estates.
SPEAK WITH AN ESTATE PLANNING ATTORNEY
Contact us today to see how AD&R can provide you with the finest legacy and wealth planning advice Northern Nevada has to offer. We help get you the proper insurance and design estate planning to help you overcome unexpected lawsuits after an accident. Give us a call today so that we can help prepare you for the perils winter might bring.
To date, twenty-four states have enacted or introduced model legislation referred to as the Uniform Voidable Transactions Act (Formerly Uniform Fraudulent Transfer Act). The full text is available on the website of the Uniform Law Commission at https://www.uniformlaws.org/committees/community-home?CommunityKey=64ee1ccc-a3ae-4a5e-a18f-a5ba8206bf49.
In the attempt to progress towards a modern US tax system, the Biden administration has proposed a number of changes to the current tax code. According to a publication released by the U.S. Treasury early this year, they hope to push these changes through Congress which is necessary to gain approval for the amendments. It’s true that many Americans are divided on the best methods for stimulating the US economy, however, one fact remains undoubtable - careful estate and tax planning is crucial for the wealth and financial security of American families.
The Greenbook, a publication that provides information regarding the Administration’s revenue proposals, details the proposed changes which will ultimately impact estate planning in numerous ways. Many of the effective estate planning strategies that have been diligently defined by professionals in the industry for decades may be discarded. However, this could also enhance certain processes in estate planning by implementing other key strategies.
Notably, the reduction of estate and gift tax exemption amounts is absent from the list of proposals. While it’s possible that this could change in the future, we know that for now, these tax exemptions remain extremely high. It’s important to understand the law as it is written today so that you can make appropriate decisions with your assets and prepare for other coming changes.
As it stands today, the estate tax laws that were passed under the Trump administration will expire and reset to the prior laws starting in 2026. If there is no action made by Congress to change this, the reset will restore the estate and gift tax exemption amount to $5 million, as it was in 2016. However, the rate of inflation must also be included in this amount which brings the total to roughly $6.6 million by 2026.
With this information in mind, it’s crucial that you do all you can now to determine the expected return on your investments for the future. To do this, you should consider the average rates of return on your current investments, compounded annually. Many people have found that a healthy return of 7% annually could double one’s net worth in just 10 to 12 years. However, if estate tax exemption amounts are reduced by roughly 50% and continue to increase with the inflation rate, you risk having to pay significantly high estate tax rates.
It can be difficult to prepare for the uncertainties that may affect your tax and estate planning strategies. Without knowing what the future holds, how do you determine the best way to protect your assets? To make a more accurate decision, some of the other Greenbook proposals should also be considered, such as:
These changes haven’t been approved yet by Congress, but their consideration could help sway your strategic plans. The following strategies are still effective tools under current tax law, and implementing them now could provide significant tax savings.
A grantor retained annuity trust (GRAT) is an estate planning strategy that allows the grantor to contribute appreciating assets to chosen beneficiaries using little or none of your gift tax exemption. To do this, you would transfer some of your property or accounts to the GRAT in which you will still retain the right to receive an annuity. Following a specified period of time, the beneficiaries will receive the amount remaining in the trust.
Another estate planning strategy that may be beneficial for you is to gift seed capital, typically in the form of cash, to an intentionally defective grantor trust (IDGT). You will then sell appreciating or income-producing property to the IDGT in which they will make installment payments back to you over a period of time. If the account or property increases in value over the period of the sale, the accounts or property in the trust will appreciate outside your taxable estate and will therefore avoid estate taxes. Additionally, the trust does not have to pay income taxes on the income the trust retains since the taxes are already paid on the income generated and accumulated in the trust.
In a spousal lifetime access trust (SLAT), the grantor is to gift property to a trust created for the benefit of their spouse and possibly their beneficiaries. An independent trustee can make discretionary distributions to those beneficiaries, which can also benefit you indirectly. Contrary, an interested trustee should be limited to ascertainable standards when making distributions, such as health and education. With this estate planning strategy, you can take advantage of the high lifetime gift tax exemption amount by making gifts to your spouse. This trust avoids the use of the marital deduction which means the assets in the SLAT will not be included in either your or your spouse’s gross estate for estate tax purposes.
Finally, there are irrevocable life insurance trusts (ILITs). This trust allows leveraging life insurance to ease the burden placed on your estate if it becomes subject to estate tax at your death. This type of trust is established by transferring an existing life insurance policy into the ILIT in which you make annual gifts to the trust in order to pay the premiums on the policy. At your death, the trust receives the insurance death benefit and distributes it according to the trust’s terms. The death benefit and the premiums gifted to the trust are completed gifts, meaning your estate would not include any of the trust’s value.
We are holding a series of webinars over the coming weeks, from which you can obtain a great deal of useful information. Just choose the session that fits into your schedule. The webinars are being offered on a complimentary basis, so you have everything to gain and nothing to lose. This being stated, we do ask that you register in advance so that we can reserve your seat.
To sign up for an estate planning webinar, visit Anderson, Dorn & Rader here. Once you find a date that is right for you, click on the button that you see and follow the simple instructions to register. For more information regarding estate tax exemptions and planning, connect with our estate planning attorneys today.
SPEAK WITH AN ESTATE PLANNING ATTORNEY
Give Anderson, Dorn & Rader Ltd. a call at 775-823-9455 to make a free consultation with an estate planning attorney
and see how we can help protect your legacy and your family.
The primary purposes of a Revocable Living Trust are to avoid Probate Court's costs at death and a guardianship proceeding should the creator of the Trust (the Trustor) become incapacitated during life. In order for a Successor Trustee to properly administer the Trust in the event of incapacity or death, the assets in the Trust should be identified.
Typically attached to an individual Revocable Living Trust is Schedule A that lists all the Trust assets. This provides a roadmap for the Successor Trustee to find the Trustor's assets held in the Trust and to begin administering the assets correctly. For married couples completing a joint Revocable Living Trust, Schedule A will identify Community Property, Schedule B will identify the Husband's Separate Property, and Schedule C will identify the Wife's Separate Property. Identifying the property's character can be very important for the Successor Trustee to properly administer the Trust for beneficiaries and determine if the step-up in income tax basis to Fair Market Value at death is applicable to the asset. The Trustors should update Schedules A, B, and C in writing as material changes are made to their assets such as new bank accounts, brokerage accounts, real estate, life insurance, safe deposit boxes, etc. While the Trustors can make updates and changes to their Schedules, the Trustors should never write on their trust document as any handwritten modification to a Trust document that is not properly executed/notarized will not be effective.
An example of Schedule A is included at the end of this article for a sample client assuming all their property is Community Property. While Schedule A provides the roadmap for administering Trust assets for Successor Trustees, it does not by itself fund assets into the Trust. To properly fund real property into a Trust, a deed must be prepared and recorded, bank account and brokerage accounts re-titled to the Trust, qualified plans and IRA beneficiary designations updated, life insurance beneficiary designations completed, and business interests assigned to the Trust.
While Estate planning can be complicated, it is essential in protecting yourself and your loved one's financial future. Give Anderson, Dorn & Rader Ltd. a call at 775-823-9455 to make a free consultation with an estate planning attorney and see how we can help protect your legacy and your family.
Many people who are not wealthy assume that trusts are only useful for high net worth individuals. They are under the impression that last wills are for "the rest of us."
This may be a mistaken assumption. All trusts are not created equal. Different trusts serve different purposes. Yes, there are trusts that are used to accomplish objectives that are needed primarily for the wealthy. On the other hand, there are other types of trusts that would not only be useful to high net worth individuals, but to the "mere mortal," as well.
One of these trusts is the revocable living trust.
The Value of a Revocable Living Trust
With a revocable living trust you as the person creating the trust will be referred to as the trustor. You name a trustee to administer the trust. You also name a beneficiary or beneficiaries who will receive distributions out of the trust.
At first you as the trustor can act as both the trustee and the beneficiary. Under this arrangement you do not surrender control of the assets while you are living. Further, because the trust is revocable, you can actually dissolve it at any time. You can also amend the terms and add or subtract beneficiaries as you see fit.
In the trust agreement you name a successor trustee who will assume this role after your death or incapacity. This is the individual or entity that will administer the trust in accordance with your wishes.
You can ask someone you know to act as trustee. However, there are other options. First of all, you may not have a personal relationship with anyone who has experience in asset management.
Secondly, even if you did know someone who is qualified, if he or she passes away or becomes incapacitated, you should have an alternate to replace them.
As an alternative you could name a trust company or the trust department of a bank to act as trustee.
When you convey assets into a living trust, your beneficiaries will receive their inheritances outside of the process of probate. When you use a will the estate must be probated before inheritances are distributed.
Probate can take a significant amount of time. There are also expenses incurred during probate. Probate costs will decrease the amount of the inheritances that will be received by the heirs.
With a living trust probate is not a factor. The trustee distributes assets to the beneficiaries in a fast and efficient manner.
Another benefit is the fact that you can include the selection of a disability trustee. If you were to become incapacitated and unable to handle your financial affairs, this disability trustee would administer the trust on your behalf, because you are still the primary beneficiary.
Probate stands in the way of your heirs and their inheritances when your assets are in your name at the time of your death. Nevada probate can take a significant amount of time (often a year or more), and most people would like their heirs to receive their inheritances in a more timely manner. For some, this wait is not a problem. For other families, however, there may be an immediate need for liquidity.
The waiting period is only one of the problems with the Nevada probate process. Expenses can accumulate during this process , and they can ultimately consume a noticeable percentage of the estate (often 4% - 8% or more if there is a contest). This is all money that could have gone to the heirs if probate was avoided.
It is possible to avoid probate in Nevada. There are a number of ways to go about it, and one of the most popular probate avoidance solutions is the revocable living trust.
Once you convey assets into the name you have given to your revocable living trust you name a trustee that is empowered to manage the assets that are titled in the trust. You also name a beneficiary or beneficiaries who would receive distributions out of the trust. The nature of these distributions would be decided by you when you create the trust agreement.
Initially you may serve as both the trustee and the beneficiary. By doing so, you do not surrender control or beneficial use of the assets. You can distribute assets to yourself, manage your own investments, and change the terms of the trust agreement if you want to do so. Since the trust is revocable, you can even revoke it entirely if you ever choose to do so. Since the point is to facilitate the transfer of your financial assets after you pass away you name a successor trustee, and you name beneficiaries who will receive distributions out of the trust after you die.
Once the assets have been conveyed into the revocable living trust they are no longer considered to be probate assets under the laws of the state of Nevada. As a result, when the trustee distributes monetary resources to the beneficiaries of the trust these asset transfers are not subject to the process of probate.
The creation of a revocable living trust is one way to avoid the probate process, but there are others as well. If you would like to discuss all of your options with a licensed professional please feel free to contact Anderson, Dorn & Rader, Ltd. to request a no obligation consultation.
We will listen carefully as you explain your objectives, gain an understanding of your unique personal situation, and make the appropriate recommendations. You can then go forward with a tailor-made estate plan that will facilitate a fast, efficient, and cost-effective transfer of assets to your loved ones when the time comes. To learn more, please download Anderson, Dorn & Rader, Ltd.'s free probate process report.
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.