Establishing a revocable living trust is a critical step in creating a well-rounded estate plan. Many individuals assume that setting up a trust automatically helps them avoid the complexities of Nevada probate. However, this isn’t always the case. Simply creating a trust is not enough; you must also ensure that your assets are properly transferred to the trust or have appropriate beneficiary designations.
Anderson, Dorn & Rader Ltd. in Reno specializes in Nevada estate planning. This article explores the essential factors that determine whether a living trust will help you avoid probate, what types of assets are subject to probate, and the consequences of not properly funding your trust.
For a revocable living trust to function as intended and bypass probate, it must be fully funded. Funding your trust involves transferring ownership of your assets—such as real estate, bank accounts, and investments—into the trust or naming the trust as a beneficiary.
For example, if you own property, you need to re-title it in the name of your trust. Similarly, financial accounts that you wish to include in the trust must have the trust named as the owner or beneficiary. Without this step, these assets will remain outside of the trust and may be subject to probate proceedings in Nevada.
Failing to properly fund your trust can negate the primary benefit of avoiding probate, leading to potential delays and additional costs for your heirs. Anderson, Dorn & Rader Ltd. can help you ensure all necessary assets are included in your trust.
Not all assets are automatically exempt from probate simply because you have a trust. Probate is required for assets titled solely in your name without a designated beneficiary or joint ownership agreement. Examples include:
Additionally, assets owned as tenants in common with another person will need to go through probate unless explicitly included in your trust or assigned to a beneficiary. A thorough estate plan accounts for these nuances, helping you avoid unexpected probate proceedings.
Certain assets are not subject to probate and will pass directly to beneficiaries upon your death. These include:
It’s important to ensure that beneficiary designations are updated and reflect your current wishes. Anderson, Dorn & Rader Ltd. offers personalized estate planning services to help align your beneficiary designations with your overall trust strategy.
Even with a well-prepared revocable living trust, if your assets are not transferred or titled correctly, they could still end up in probate. This creates additional burdens for your loved ones, who may need to navigate the probate process while managing your estate.
To address this issue, some individuals include a pour-over will in their estate plan. This type of will directs any unfunded assets to be transferred into your trust during probate. However, relying on a pour-over will is not an ideal solution—it still involves going through probate, which can delay the distribution of assets and increase legal fees.
The best approach is to work with estate planning professionals who can help you avoid the pitfalls of unfunded trusts. Anderson, Dorn & Rader Ltd. in Reno provides guidance on properly funding your trust to ensure that your assets are transferred efficiently and according to your wishes.
At Anderson, Dorn & Rader Ltd., we understand that each estate plan is unique. We take a personalized approach to ensure that your revocable living trust is fully funded and aligned with your goals.
Proper planning reduces the risk of probate and ensures that your assets are distributed smoothly to your heirs. Our team will help you review your trust, update beneficiary designations, and transfer assets as needed to avoid probate complications.
If avoiding probate is a priority for your estate plan, setting up a revocable living trust is only the beginning. You must also ensure that your assets are correctly transferred into the trust or designated with appropriate beneficiaries.
Contact Anderson, Dorn & Rader Ltd. in Reno for expert guidance on funding your trust and avoiding probate. Our personalized estate planning services will help ensure your trust operates as intended, protecting your assets and providing peace of mind for you and your loved ones.
Planning for your child's future is an important part of Nevada estate planning. Anderson, Dorn & Rader Ltd. understands that choosing the right individuals to care for your child and manage their financial assets requires careful thought. Deciding whether the same person should serve as both the guardian and the trustee is one of the most significant decisions parents must make. This article explores the roles, benefits, and challenges to help you make an informed choice that aligns with your family’s needs.
A guardian takes on the responsibility of raising your child if you are no longer able to do so. This includes making decisions about their education, healthcare, and emotional well-being. A trustee, on the other hand, manages any financial assets or inheritance left for your child, ensuring those resources are used wisely for their benefit.
Both roles are essential, but they require different skill sets. While a guardian focuses on providing emotional and physical care, a trustee must have the ability to manage finances responsibly. Anderson, Dorn & Rader Ltd. can help parents evaluate potential candidates to ensure each role is filled by the right person.
There are situations where appointing the same person as both guardian and trustee can simplify the process. This approach streamlines decision-making by ensuring consistency between your child's care and financial management. For example, the same individual can make informed choices about education or healthcare costs without needing approval from a separate trustee.
Choosing one person to serve in both roles can also prevent disagreements between the guardian and trustee, fostering a unified approach to your child’s upbringing and financial planning. This solution works well when you have complete trust in an individual’s ability to manage both responsibilities.
Despite the advantages, assigning both roles to one person may also present challenges. Managing a child’s emotional needs while handling their financial affairs can be overwhelming for a single individual. Even a well-intentioned guardian may struggle to keep up with budgeting, investments, or legal responsibilities without prior experience in financial management.
Another risk is the possibility of conflicts of interest. A guardian might unintentionally use the child’s assets for purposes that do not align with the original financial plan. Anderson, Dorn & Rader Ltd. advises parents to carefully consider these potential challenges before deciding.
Appointing different individuals as guardian and trustee can provide important checks and balances. The trustee focuses solely on managing finances, ensuring that funds are preserved and used appropriately over time. Meanwhile, the guardian can dedicate their attention to your child’s well-being without the added pressure of financial responsibilities.
By separating the roles, families reduce the risk of conflicts and ensure that each individual is best suited to their specific responsibilities. Anderson, Dorn & Rader Ltd. recommends this approach for parents who want to create a balanced structure of care and financial management.
When it comes to securing your child’s future, there is no one-size-fits-all solution. The decision to assign the same person as both guardian and trustee—or to split the roles—depends on your family’s unique circumstances. Anderson, Dorn & Rader Ltd. can help you evaluate the pros and cons of each option to design an estate plan that provides emotional stability and financial security for your child.
When planning for the future, few topics are more important than the care of your children and the protection of your assets. If something unexpected happens, ensuring your children are raised by someone you trust is essential. At Anderson, Dorn & Rader Ltd. in Reno, we understand the complexity of these decisions. One critical step is naming a guardian for your minor children and ensuring a sound financial plan that includes leaving an inheritance to grandchildren.
This article explores the importance of naming a guardian and trustee, financial planning for children’s future needs, and strategies to ensure that your legacy benefits your grandchildren.
In Nevada, if you don’t name a guardian, the court will make this decision for you, which may lead to unwanted outcomes. Judges are required to consider the child's best interests, but they do not know your personal values, preferences, or relationships. There is a risk that your children could end up with a relative you don't approve of or, in some cases, a stranger.
By naming a guardian, you gain control over who will raise your children and ensure their upbringing aligns with your values and vision for their future. Your selected guardian will step in to provide emotional support and continuity during a challenging time, following your wishes regarding their education, well-being, and daily life. This peace of mind can be invaluable for parents thinking long-term.
Selecting a guardian requires careful thought. Factors such as the relationship between the potential guardian and your children, their parenting style, and shared values are essential considerations. Stability is also crucial—how familiar your children are with the person, whether they live nearby, and if they can maintain your children’s current school, friendships, and routines.
It is also important to consider the guardian’s health, age, and long-term ability to care for your children. While grandparents may have time and experience, they may struggle with the physical demands of raising young children. On the other hand, younger guardians, such as siblings, may not be in a stable life stage to take on the responsibility.
Before making a decision, have open conversations with your chosen guardian to ensure they are comfortable taking on this role. Naming an alternate guardian provides an extra layer of security if your first choice cannot serve.
Raising children should not impose a financial burden on the guardian. Many parents plan ahead by designating funds through savings, life insurance, or other financial assets. These resources can cover essential needs like housing, education, healthcare, and daily living expenses.
When leaving an inheritance to grandchildren, it is wise to plan how these funds will be managed. Some parents also provide additional financial support, such as helping the guardian upgrade their home or buy a larger vehicle to accommodate their children comfortably.
Ensuring financial stability is crucial for your children’s future and eases the guardian’s responsibilities, allowing them to focus on providing emotional and practical care.
In many situations, it makes sense to assign separate individuals for the roles of guardian and trustee. While the guardian provides emotional and physical care, the trustee manages financial assets for your children or grandchildren. This division of responsibilities ensures that financial resources are used correctly, reducing potential conflicts of interest.
For example, a trusted family member who loves your children may not have the financial expertise to manage investments, life insurance payouts, or property assets. Appointing a trustee with financial experience ensures that funds are managed properly and distributed according to your wishes. This structure also creates accountability, preventing misuse of the inheritance meant to benefit your children or grandchildren.
If no guardian is named in your will or estate plan, a judge will decide who raises your children. In this situation, anyone—including estranged family members—can petition the court for custody. This process can lead to disputes among relatives and result in outcomes that may not align with your preferences.
Naming a guardian as part of your estate plan ensures the court respects your wishes. It also spares your children the emotional stress of uncertainty during an already difficult time.
Proactive estate planning, including naming a guardian and trustee, ensures that your children and grandchildren are protected. While these decisions are challenging, they are essential to creating a secure future for your family.
At Anderson, Dorn & Rader Ltd., we help families in Nevada develop customized estate plans. Whether you need guidance on naming a guardian or advice on leaving an inheritance to grandchildren, our team is here to help.
Planning for the unexpected is an act of love. Naming a guardian and planning financial support through life insurance or inheritance are critical steps in protecting your children’s future. At Anderson, Dorn & Rader Ltd., we offer personalized estate planning services tailored to your family’s needs.
Take the first step toward peace of mind by contacting us for a consultation. We’ll help you navigate the complexities of estate planning, from selecting guardians to managing finances for your children and grandchildren.
Contemplating the future of our loved ones after we're gone can be tough. While acknowledging our mortality isn't easy, proactive estate planning allows us to ensure our wishes are fulfilled, providing a secure future for those we care about. In Reno, effective estate planning ensures your assets and wishes are properly managed and respected.
The initial step in estate planning is identifying your priorities. Your unique circumstances, the needs of your loved ones, and your philanthropic goals will shape these priorities. Clarifying your goals is essential to work with advisors and ensure sufficient resources to meet your wishes. This teamwork also helps avoid conflicts or issues within your estate plan.
Consider the following common estate planning priorities:
Take the following steps to prepare for creating your estate plan:
Creating a comprehensive estate plan in Reno can be one of the most valuable gifts for your loved ones. By clearly defining your priorities and working with experienced professionals, you can ensure your estate plan reflects your wishes and secures your loved ones' future. Contact us to learn more about how we can help you design a plan tailored to your needs.
What Is Next for Your Estate Plan?
Having an estate plan is a great way to ensure you and your loved ones are protected today and in the future. When creating an estate plan with our estate planning attorneys in Reno, we look at what is going on in your life at that time. But because life is full of changes, it is important to make sure your plan can change to accommodate whatever life throws your way. Sometimes, we can make your first estate plan flexible to account for potential life changes. Other times, we must change or add to the tools we use to ensure that your ever-evolving wishes will be carried out the way you want.
Life is constantly changing. The following are some important events that may require you to reevaluate your estate plan in Reno:
It is important to know when you create your first estate plan in Reno, that you are not locked into this plan for the rest of your life. The following are common changes we can make to your estate plan to ensure that we adequately address your evolving concerns and wishes.
A will (sometimes referred to as a last will and testament) is a tool that allows you to leave your money and property to anyone you choose. It names a trusted decision-maker (a personal representative or executor) to wind up your affairs at your death, lists how your money and property will be distributed, and appoints a guardian to care for your minor children. If you rely on a will as your primary estate planning tool, the probate court will oversee the entire administration process at your death, but the probate process is expensive, time-consuming, and on the public record.
On the other hand, a revocable living trust is a tool in which a trustee is appointed to hold title to and manage the accounts and property that you transfer to your trust for one or more beneficiaries. Typically, you will serve as the initial trustee and be the primary beneficiary. If you are incapacitated (unable to manage your affairs), the backup trustee will step in and manage the trust for your benefit with little interruption and with less potential for costly court involvement. Upon your death, the backup trustee manages and distributes the money and property according to your instructions in the trust document, again without court involvement.
If your wealth has grown or you have new loved ones to provide for, you may find the privacy, expediency, and potential cost-savings associated with a revocable living trust more appropriate for your situation. Consult with Estate Planning Reno to see if this option is right for you.
At some point, you may decide that you need life insurance—or more of it—to provide for your loved ones sufficiently. If the value of your life insurance is especially high, you may want to consider adding protection for the funds in your estate plan, as well as engaging in estate tax planning. Both goals can be accomplished by using an irrevocable life insurance trust (ILIT). Once you create the ILIT, you fund it either by transferring ownership of an existing life insurance policy into the trust or by having the trust purchase a new life insurance policy. Once the trust owns a policy, you then make cash gifts to the trust to pay for the insurance premiums. These gifts can count against your annual gift tax exclusion, so you likely will not owe taxes at the point of these transfers. Upon your death, the trust receives the death benefit of the policy, and the trustee holds and distributes the money according to your instructions in the trust document. This tool allows you to remove the value of the life insurance policy and the death benefit from your taxable estate while allowing you to control what will happen to the death benefit. An ILIT can also be helpful if you want to name beneficiaries for the trust who differ from the beneficiaries you name in other estate planning tools.
As you accumulate more wealth or become more philanthropically inclined, you may wish to include separate tools to benefit a cause that is near and dear to your heart. Depending on your unique tax situation, using tools such as a charitable remainder or charitable lead trust can allow you to use your accounts or property that are increasing in value to benefit the charity while offering you some potential tax deductions.
A charitable remainder trust (CRT) is a tool designed to potentially reduce both your taxable income during life and estate tax exposure when you die by transferring cash or property out of your name (in other words, you will no longer be the owner). As part of this strategy, you will fund the trust with the money or property of your choosing. The property will then be sold, and the sales proceeds will be invested in a way that will produce a stream of income. The CRT is designed so that when it sells the property, the CRT will not have to pay capital gains tax on the sale of the stocks or real estate. Once the stream of income from the CRT is initiated, you will receive either a set amount of money per year or a fixed percentage of the value of the trust (depending on how the trust is worded) for a term of years. When the term is over, the remaining amount in the trust will be distributed to the charity you have chosen.
A charitable lead trust (CLT) operates in much the same way as the CRT. The major difference is that the charity, rather than you as the trustmaker, receives the income stream for a term of years. Once the term has passed, the individuals you have named in the trust agreement will receive the remainder. This can be an excellent way to benefit a charity while still providing for your loved ones. Also, you may receive a deduction for the value of the charitable gifts that are made periodically over the term. These deductions may offset the gift or estate tax that may be owed when the remaining amount is given to your beneficiaries.
Adding Documents to Care for Your Minor Child
If you have not reviewed your estate plan since having or adopting children, you should consider incorporating some additional tools into your estate plan with estate planning attorneys in Reno. An important tool recognized in Nevada is a document that grants temporary guardianship over your minor child. This can be used if you are traveling without your child or are in a situation where you are unable to quickly respond to your child’s emergency. This document gives a designated individual the authority to make decisions on behalf of the minor child (with the exception of agreeing to the marriage or adoption of the child). This document is usually only effective for six months to a year but can last for a longer or shorter period, depending on your state’s law. You still maintain the ability to make decisions for your child, but you empower another person to have this authority in the event you cannot address the situation immediately.
We are committed to making sure that your wishes are carried out in the way that you want. For us to do our job, we must ensure that your wishes are properly documented and that any relevant changes in your circumstances are accounted for in your estate plan. If you need an estate plan review or update, give us a call. Our expert team at Estate Planning Reno is here to assist you.
When establishing a third-party special needs trust, one of the most critical decisions you'll make is choosing the trustee. The trustee will manage the trust assets, ensure that the beneficiary's needs are met, and navigate the complex regulations surrounding government aid. In this article, we will explore the key responsibilities of a trustee, the pros and cons of professional versus family trustees, the legal considerations involved, and the long-term impact of this decision.
The trustee is responsible for managing the assets held in the trust. This includes investing the assets wisely, ensuring they grow and are preserved for the future. A trustee must be knowledgeable about financial management or have access to professional advice to make informed decisions.
Another crucial responsibility is making distributions to the beneficiary. The trustee must ensure that distributions align with the terms of the trust and do not jeopardize the beneficiary's eligibility for government aid programs such as Supplemental Security Income (SSI) and Medicaid. This requires a thorough understanding of the rules governing these programs.
The trustee must balance the need to preserve trust assets with the need to provide for the beneficiary's current and future needs. This includes paying for medical expenses, education, housing, and other necessities that enhance the beneficiary's quality of life.
Appointing a family member as the trustee has several advantages. Family members are often more familiar with the beneficiary's needs and preferences, which can make them more compassionate and understanding trustees. They may also be more willing to serve without compensation, which can preserve trust assets.
However, there are downsides to consider. Family members may lack the financial and legal expertise required to manage the trust effectively. They may also face conflicts of interest or emotional stress from managing the trust, especially if they are already involved in caregiving.
A professional trustee, such as a lawyer, bank, or trust company, brings expertise in managing trust assets and navigating legal requirements. Professional trustees can provide a high level of impartiality and are less likely to face conflicts of interest. They also offer continuity, ensuring the trust is managed consistently over time.
The main drawback of professional trustees is cost. They typically charge fees for their services, which can be a percentage of the trust assets or a flat fee. Additionally, they may not have the same personal connection to the beneficiary as a family member would.
Trustees have a fiduciary duty to act in the best interests of the beneficiary. This means they must manage the trust assets prudently, avoid conflicts of interest, and comply with the terms of the trust. Trustees can be held legally liable for any breach of these duties.
Serving as a trustee involves potential legal liabilities. If the trustee mismanages the trust assets or fails to comply with legal requirements, they can be sued by the beneficiaries or other interested parties. It is crucial for trustees to understand these risks and seek professional advice if necessary.
The choice of trustee has a profound impact on the long-term welfare of the beneficiary. A well-chosen trustee can ensure that the beneficiary's needs are met without jeopardizing their eligibility for government aid. They can also provide stability and continuity, which are essential for the beneficiary's peace of mind.
A trustee's ability to manage the trust effectively will determine whether the trust can meet its intended purpose. This includes preserving assets for the beneficiary's lifetime, making appropriate distributions, and adapting to changes in the beneficiary's needs and circumstances.
Choosing the right trustee for a third-party special needs trust is a decision that requires careful consideration. It involves balancing the need for expertise and impartiality with the personal connection and understanding that a family member can provide. At Anderson, Dorn & Rader Ltd., we are here to help you navigate this complex process and ensure that your loved one's future is secure. Contact us to schedule a consultation and discuss how to set up a special needs trust with the appropriate trustee.
Ensuring the financial stability and care of a loved one with disabilities is a crucial concern for many families. One effective way to secure their future while preserving eligibility for essential government benefits is by setting up a special needs trust. At Anderson, Dorn & Rader Ltd. in Reno, we specialize in helping families navigate this complex process, providing peace of mind and financial security for their loved ones.
A special needs trust (SNT) is a legal arrangement designed to benefit individuals with disabilities while preserving their eligibility for government assistance programs like Supplemental Security Income (SSI) and Medicaid. These trusts are created to hold assets that can be used for the beneficiary's supplemental needs without jeopardizing their access to these critical benefits.
One of the primary reasons families consider a special needs trust is to ensure that the beneficiary remains eligible for government programs. SSI and Medicaid have strict income and asset limits; receiving a large sum of money directly can disqualify an individual from these programs. A special needs trust allows funds to be set aside for the beneficiary's use without being counted as personal assets.
This careful planning ensures that your loved one can continue to receive the essential support provided by these programs while also benefiting from the additional resources available through the trust.
When establishing a special needs trust, several factors must be taken into account to ensure it meets the legal requirements and effectively serves its purpose. Here are some key considerations:
The trustee plays a vital role in managing a special needs trust. Their responsibilities include:
Given the complexity of these duties, families often choose to work with professional trustees or fiduciary services to ensure that the trust is managed effectively and in the best interest of the beneficiary.
Setting up a special needs trust is a significant step in securing your loved one's future. At Anderson, Dorn & Rader Ltd., we understand the intricacies of these trusts and can guide you through the process with expertise and compassion. Contact us today for a personalized consultation to explore how a special needs trust can be tailored to your family's unique situation, ensuring that your loved one receives the care and support they need without compromising their eligibility for essential government benefits.
As we look ahead to 2026, the landscape of estate taxes is poised for significant changes that could impact your financial planning. The Tax Cuts and Jobs Act (TCJA) of 2017 brought substantial changes to the federal estate tax exemption, raising it to $13.61 million in 2024. This increased exemption allows individuals to transfer a larger amount of wealth to their heirs without incurring estate tax liabilities. However, this generous exemption is set to sunset at the end of 2025, potentially bringing major implications for estate planning.
The Congressional Budget Office projects that the new exemption amount will decrease to $6.4 million in 2026, adjusting for inflation. This reduction means that what is exempt from estate tax today might not be exempt tomorrow. As such, it's crucial to seek guidance from a professional, like an estate planning attorney in Reno, to navigate these impending changes effectively.
The federal estate tax has a long history, first introduced in 1916 to generate government revenue. Over the years, the exemption limits and rates have seen numerous adjustments. Notably, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) progressively increased the estate tax exemption and lowered the tax rates until the exemption hit zero in 2010. However, without further legislative action, the exemption reverted to the 2001 levels for deaths occurring in 2011, setting the exemption at $5 million.
The TCJA of 2017 was a game-changer, doubling the estate tax exemption from $5.49 million to nearly $11 million, aiming to stimulate economic growth and job creation. This adjustment continues to account for inflation, offering an unprecedented opportunity for individuals to transfer significant wealth free from federal estate taxes.
Embedded within the TCJA is a sunset provision that limits the duration of the higher estate tax exemption. Without legislative intervention, this exemption will be cut in half to $5 million, adjusted for inflation, by 2026. This potential reduction could create an estate planning crisis for individuals with substantial estates as the December 31, 2025, deadline approaches. According to the Congressional Budget Office, the exemption is expected to drop to $6.4 million in 2026.
As we approach 2025, it is vital to reassess your estate planning goals and strategies in light of potential changes to the federal estate tax exemption. Collaborating with trusted advisors, including an estate planning attorney in Reno, is essential to review and potentially adjust your estate plan, investments, and property. This proactive approach ensures that your financial legacy remains protected despite upcoming legislative changes.
An estate planning attorney in Reno can help you navigate these complexities, providing insights and strategies tailored to your specific situation. Whether it involves lifetime gifting, reassessing property values, or developing comprehensive succession plans, professional guidance is crucial to minimize your estate tax liability and safeguard your wealth for future generations.
As the estate tax exemption is set to change in 2026, individuals with significant wealth need to act now to address potential future tax burdens. The Tax Cuts and Jobs Act (TCJA) currently provides a high estate tax exemption, but this is scheduled to decrease in 2026. Preparing for this reduction is essential, and working with an estate planning attorney in Reno can help you develop and implement effective strategies to minimize estate tax liability.
Consider the Andersons, a wealthy family living in a high-cost state. Robert Anderson, a successful entrepreneur, and his wife, Sarah, an accomplished artist, have built a substantial estate worth $16 million. Their assets include business holdings, valuable artwork, life insurance, real estate, and other investments. Their two adult children, James and Emily, are actively involved in the family business
With the current federal estate tax exemption set at $13.61 million per individual, adjusted for inflation, the Andersons have felt secure in their estate planning. This exemption is projected to increase to $13.61 million by 2024. The Andersons have taken initial steps to secure their financial legacy, such as creating a trust, considering a family limited partnership, and exploring gifting strategies. However, if the exemption drops to $6.4 million adjusted for inflation in 2026, they may face significant estate tax challenges. An estate planning attorney in Reno can provide essential guidance in navigating these complexities.
The family business forms a significant part of the Andersons' estate. To ensure its continued viability, they need a comprehensive business valuation and succession plan. This planning will help minimize the estate tax burden and facilitate a smooth ownership transition to their children, James and Emily. Consulting an estate planning attorney in Reno is crucial for developing a robust succession plan.
Given the potential changes in estate tax laws, the Andersons must reassess their financial accounts, retirement investments, life insurance policies, real estate, and artwork. Accurate valuations are essential to determine how these assets will impact their estate tax calculation. This reassessment will help them understand the potential tax liability they face if the exemption amount is reduced.
To reduce their taxable estate while the higher exemption is in place, the Andersons might consider accelerated lifetime gifting strategies. The IRS has clarified that gifts made under the increased exclusion from 2018 to 2025 will not be subject to additional taxes if the exclusion amount drops after 2025. Gifting up to $13.61 million in 2024 can be done without tax liability, but exceeding $6.4 million in 2026 may have significant consequences. An estate planning attorney in Reno can ensure these gifts are managed correctly.
To provide for their loved ones, the Andersons should consider using life insurance. Establishing an irrevocable life insurance trust to own the policy can remove its value from their estate, protecting the death benefit for their beneficiaries. Consulting an estate planning attorney in Reno is vital to ensure this strategy is implemented correctly.
High-net-worth families like the Andersons may benefit from advanced tax planning techniques, such as an AB trust. This approach optimizes each spouse’s estate tax exemption, potentially minimizing their liability. Upon the first spouse's death, an amount equal to the current exemption is placed in a trust, and the remainder goes to a second trust for the surviving spouse, qualifying for the unlimited marital deduction.
Spouses can transfer an unlimited amount to each other without estate or gift tax concerns. However, filing an estate tax return at the first spouse's death can document the unused exemption, allowing the surviving spouse to add it to their own exemption. This portability can be crucial for estate planning, and an estate planning attorney in Reno can guide you through this process.
If the Andersons are inclined towards philanthropy, establishing a charitable remainder trust could be an excellent option. Though setting up such a trust can be complex, it offers significant tax benefits and aligns with their charitable goals.
If your situation resembles the Andersons', seeking expert advice is essential to address estate tax concerns. Understanding how the potential reduction in the estate tax exemption will impact your estate is crucial. Consulting an estate planning attorney in Reno can provide the specialized expertise needed to navigate these challenges, protect your assets, and ensure a smooth transition of wealth.
As we move into 2025, reviewing your estate planning goals and strategies is vital. The TCJA's estate tax exemption, currently set at $13.61 million adjusted for inflation, may revert to pre-2017 levels by the end of 2025. Depending on your assets, including business interests, life insurance, and real estate, you may need to reassess their values to avoid exceeding the lower exemption limit.
Developing a comprehensive business succession plan is critical, particularly if you want your business to continue after you retire or pass away. Strategies like gifting shares to the next generation or creating a family limited partnership can help minimize tax liability. An estate planning attorney in Reno can assist in structuring these plans effectively.
Life insurance can play a crucial role in your estate plan. Reviewing your policies with the federal estate tax exemption in mind is essential. Transferring policy ownership to an irrevocable life insurance trust can protect the death benefit and reduce estate tax liability.
Real estate can present unique challenges in estate planning. Reassessing property values and using trusts, like qualified personal residence trusts (QPRTs), can help transfer real estate to heirs while minimizing estate tax exposure. Creating entities to own real estate may offer additional asset protection.
The estate tax landscape is evolving, making it crucial to keep your estate plan current. Collaborating with trusted financial and tax advisors ensures your plan is customized to your unique circumstances. Consulting an estate planning attorney in Reno can provide the expertise needed to navigate these complex challenges and protect your financial legacy.
In the world of estate planning, Dynasty Trusts have become increasingly popular due to their ability to bypass estate taxes and shield assets from creditors across many generations. Not all states are created equal when it comes to the laws governing these trusts. Alaska, Delaware, Nevada, and South Dakota have emerged as leaders in attracting out-of-state Dynasty Trusts, thanks to their favorable laws.
A Dynasty Trust is a robust irrevocable trust crafted to last through several generations. It's designed not only to preserve family wealth but also to offer protection from creditors, divorce settlements, and bankruptcy. These trusts often empower the primary beneficiary with significant control over the trust assets, mimicking outright ownership but without the associated risks.
Alaska allows trusts to potentially last up to 1,000 years and offers strong protections against creditors, including protection from claims by divorcing spouses.
Delaware is known for its perpetual trusts for personal property, though real property trusts are capped at 110 years. It has unique decanting laws that allow for flexibility in trust management but requires careful drafting to avoid issues with divorcing spouse claims.
Nevada boasts a 365-year limit on trust duration and is noted for its lack of state income tax on trusts, robust spendthrift provisions, and flexible decanting rules that enhance creditor protection.
South Dakota allows for perpetual trusts and has advantageous decanting and creditor protection laws, making it a strong contender for setting up a Dynasty Trust.
Decanting Laws Across States
Decanting is a process that allows trustees to transfer assets from one trust to another—a useful feature that can adapt a trust to changing laws or family circumstances. Among the four states, Delaware, Nevada, and South Dakota offer more flexibility in decanting practices compared to Alaska, providing significant strategic advantages in long-term trust management.
While Alaska, Delaware, Nevada, and South Dakota are top choices, other states like Tennessee, Ohio, and Wyoming also offer strong Dynasty Trust provisions. Selecting the right jurisdiction depends on specific trust goals, the location of trust assets, and the residence of beneficiaries. Working with knowledgeable estate attorneys in the chosen state can ensure that the trust is set up to maximize benefits.
For those considering a Dynasty Trust, these states offer compelling reasons to look beyond your home state. With their strong legal frameworks for long-term asset protection and tax benefits, they present golden opportunities for securing family wealth across generations.
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.
When a loved one suffers from a mental illness, one small comfort can be knowing that your trust can take care of them through thick and thin. There are some ways this can happen, ranging from the funding of various types of treatment to providing structure and support during his or her times of greatest need.
Let’s explore a few ways you can help take care of a loved one struggling with mental illness with the help of your estate planning attorney:
Trusts can be disbursed in many ways. If your loved one is involved in an inpatient care facility or an ongoing outpatient program, you can structure your trust so that its disbursements cover the costs of that treatment as time goes on. This also helps your loved one because it relieves them of the responsibility of managing large sums of money on their own. They can rest easier knowing that their care is covered without having to set up a complicated payment plan on their own.
In some cases, the person suffering from mental illness doesn’t have the capacity to enroll themselves in the right type of care. If an intervention of care is needed, your trust can also help encourage involuntary treatment that ultimately serves your loved one’s best interests in the long run.
Selecting a trustee isn’t always an easy feat. That’s one of many decision-making areas where we’re more than happy to step in and walk you through the process. When you have a loved one battling mental illness, your choice of a trustee becomes even more of a nuanced decision.
We’ll help you deduce the perfect person to not only manage the wealth contained within the trust but also keep a compassionate watchful eye on your loved one benefitting from the trust. An astute trustee can look for early warning signs surrounding your loved one’s mental health issue and make sure to get them connected to the care and services they need in no time.
Most people don’t think of large inheritances as a burden. But this can be the case when an individual is dealing with depression, anxiety, hoarding, or diseases like schizophrenia. Lifetime trusts are an excellent way to take care of your loved one without saddling them with a challenge on top of what they are already experiencing.
A discretionary lifetime trust can be drafted in such a way that its funds can only be used to go toward certain goods and services — such as outpatient mental health care, housing, or other “necessaries” of life. Likewise, it can also prohibit spending in areas that would cause more harm than good — gambling or compulsive shopping, for example. The discretionary nature of these types of trusts makes it so your loved one doesn’t have to worry about their own potential missteps when it comes to using the wealth contained within the trust.
Do you have a family member or other loved one who could use the financial flexibility and structural support of a trust? Give us a call today, and together we’ll figure out the best ways to enhance your loved one’s life by finding the right estate planning tools to offer the most help.
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.
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
The statistics that are compiled to get a feel for the estate planning preparedness of American adults are not encouraging. Sometimes a particular publication will start to track the progress of a certain phenomenon over a number of years, and Caring.com has focused on this subject.
They have published a survey for 2020 that is eye-opening, and not in a good way. In 2017 when they started doing their research, they found that 42 percent of American adults had estate plans in place. This year, the number is just 32 percent, and lack of preparedness is not confined to young people.
Just over 27 percent of respondents that were between the ages of 35 and 54 had wills or trust, and the parents of dependent children are typically in this age group. If you want to take chances when no one is depending on you, that’s one thing, but parents are in a different category.
You would certainly think that most people that are 55 years of age and older have addressed this responsibility, but this is simply not the case. Only 47.9 percent of individuals in this age group have wills or trusts.
If you are going through life without an estate plan like most people and you never take action before it’s too late, you would die intestate. Under the circumstances, the probate court would step in to supervise the estate administration process.
They would appoint a personal representative to act as the administrator. This is a role that is similar to that of the executor that would be named in a last will.
Final debts would be paid during probate, and the court would ultimately order the distribution of the assets under the intestate succession rules of the state of Nevada.
If there are children but no spouse, siblings, or parents for living, the children would inherit the entire intestate estate. The surviving spouse would inherit the estate if there are no living parents or children.
Parents would be the sole inheritors if there is no surviving spouse and there are no siblings or children. The siblings are the inheritors if there are no children, no parents, and no surviving spouse.
When there is a spouse and one child, the spouse would assume ownership of all community property and half of the separate property, and the child would get the other half the separate property.
In a situation where there is a spouse in more than one child, a spouse would get the entirety of the community property and one-third of the separate property. The children would divide the rest equally.
If a spouse and parents survive a decedent, the spouse would inherit all of the community property and half of the separate property, and the parents would inherit the remainder.
The asset transfers that are subject to the intestate laws are transfers that would have been subject probate if there was a will. Some types of asset transfers are in a different category.
Life insurance proceeds and inherited individual retirement accounts would go to the beneficiaries that were selected by the decedent. The same thing is true with payable on death accounts and property that is held in joint tenancy.
There is no reason to take any chances with your legacy. We know that people assume that they will always have time to take care of it later on, but for far too many fate intercedes.
When you take the right steps to preserve your legacy for the benefit of your family, you can go forward with peace of mind.
If you’re ready to get started, you can send us a message to request a consultation appointment, and we can be reached by phone at 775-823-9455.
Estate planning attorneys always emphasize the fact that there is no one universal approach that is right for each and every person. The optimal way to proceed will depend upon the circumstances, and this one of the major reasons why it is important to work with a qualified lawyer.
This being stated, there are certain core components that an estate planning will have in a general sense. Let’s look at the essentials that should be addressed in every estate plan.
Far too many people assume that a will is the right choice as the document that you should use to express your final wishes. In reality, a last will is usually not going to be the best choice unless the situation is extremely simple and straightforward.
Why is a will inadequate in a lot of cases? One reason why a will is less than ideal is the fact that it would be admitted to probate. This is a costly and time-consuming legal process that strips your family of privacy, because probate records are available to anyone that is interested in them.
There are also limitations when you use a last will. Unless you include a testamentary trust as part of the plan, the will would facilitate lump-sum asset transfers. This can be a source of concern if you have people on your inheritance list that are not great at handling money.
In addition to your desires, you also have to consider the life situation of the individuals that will be receiving inheritances. For example, people with special needs typically rely on Medicaid for health insurance, and they get income through the Supplemental Security Income program.
These are need-based government benefits, so an improvement in financial status can cause a loss of eligibility. If you name someone that is in this position in a last will, they would directly receive an inheritance, and this could impact benefit eligibility going forward.
This is just one example, but there are other reasons why a will would not be the best choice to provide for some people.
There are a number of different types of trusts that can be used to satisfy various estate planning aims. They are definitely not strictly used by wealthy individuals, and some of them wouldn’t even be appropriate for high net worth families. Once again, you should explore your options thoroughly with the benefit of professional guidance.
One of the cold hard truths that you should understand when you are thinking about the future is the possibility of latter life incapacity. It is not a pleasant thing to consider, but about one third of people that are 85 years of age and older have Alzheimer’s disease.
This is not the only cause of incapacity, so you should definitely prepare for this eventuality in advance. If you do not, people close to you could petition the state to appoint a guardian to act on your behalf. You would become a ward of the state, and this is not a very pleasant fate.
A guardianship can be avoided if you take the right steps to prepare for possible incapacity. If you have a living trust, you could name a disability trustee that would administer the trust in the event of your incapacity.
Another document that you can use if you do not have a trust is a durable power of attorney for property. The agent that you choose would be able to act as your representative if you ever become incapacitated.
You should actually have one of these documents even if you have a living trust, because the agent would be able to manage property that was never conveyed into the trust.
The last pieces to the basic estate plan puzzle are advance directives for health care. With a living will, you state your preferences regarding the utilization of life-sustaining measures.
You would add a durable power of attorney for health care to name an agent to make medical decisions on your behalf. These would be decisions that are not directly connected to life-support matters.
Another document that is necessary is a HIPAA release form. This will give health care professionals the ability to speak freely with the person or people that you name on the form.
We have scheduled a number of webinars that you can attend to obtain some important information about the estate planning process. There is no charge, and you can check out the dates and obtain registration information if you visit our webinar page.
Our firm has always been very receptive to the needs of the LGBT community, and there was once a time when legal safeguards were absolutely necessary for committed gay couples. When same-sex marriages were not recognized by the federal government, people in these committed partnerships were not afforded the same inherent rights that married people enjoy.
To provide an example, if you pass away without any state estate planning documents at all, this would be looked upon as the condition of intestacy in a legal context. Under these circumstances, the probate court would enter the picture to supervise the administration of the estate.
Ultimately, the assets would be distributed using the intestate succession laws of the state of Ohio. In our state, if a married person dies intestate without any descendants, the surviving spouse would inherit the intestate property.
However, if there is no valid “piece of paper,” this protection would not exist. Surviving parents would be first in line to assume ownership of the intestate property, and if there were no parents still living, siblings would come next. The line of succession would continue from there with the closest blood relatives.
There is also the matter of health care decision making. If no provisions are made for these contingencies in advance, the next of kin would be contacted by medical professionals. Someone that is in a committed relationship that is not legally married would not have the ability to make decisions on behalf of their partner.
We should emphasize the fact that estate planning has always been quite relevant for people that are legally married. The point is that they do have some basic protections from an estate planning perspective that are built into the laws. Things weren’t the same for couples that could not get married, but all that has changed, and a women named Edith Windsor had a great deal to do with it.
Thea Spyer and the aforementioned Edith Windsor consummated a 30 year romantic relationship with their marriage in Toronto, Ontario in 2007. The following year, the state of New York recognized the marriage as well, but same-sex marriages were not federally recognized.
This was because of Section 3 of the Defense of Marriage Act (DOMA) that defined the institution as something that can only exist between a man and a woman.
There is a federal estate tax marital deduction in the United States that allows for unlimited tax-free transfers between spouses. When Spyer died in 2009, she left a sizable inheritance to her spouse. In spite of the fact that they were married, the IRS demanded over $360,000 to cover the estate tax liability.
Windsor was not prepared to take this lying down, so she filed a lawsuit, and the case ultimately made its way to the docket of the United States Supreme Court. On June 26, 2013, a majority of the Justices found that the section of the DOMA that limited the scope of marriages was unconstitutional.
Since then, same-sex marriages have been recognized by the federal government. As a result, the safeguards that have always been in place for married people are now extended to legally married members of the LBGT community.
As we have stated previously, in spite of the fact that things have changed for the better, estate planning is a must for all married people, regardless of sexual orientation. Plus, there are those that choose not to get married for one reason or another, and inheritance planning is essential for these individuals as well.
Our firm is here to help if you are currently unprepared from an estate planning perspective. We would be more than glad to sit down with you, gain an understanding of your situation, and explain your options. If you decide to go forward, we can craft a personalized estate plan that ideally suits your needs.
You can schedule a consultation right now if you give us a call at 775-823-9455. There is also a contact form on this website that you can use if you would prefer to send us a message.
A lot of people like to roll up their sleeves and embrace do-it-yourself projects, and there is certainly nothing wrong with taking the initiative to get things done on your own. It can save you money, and it can become an enjoyable hobby. This being stated, it is important to know where to draw the line when it comes to the DIY phenomenon.
There are websites on the Internet that sell do-it-yourself legal documents, including last wills and other estate planning devices. Since it doesn’t take any particular acquired skill to fill in the blanks on a worksheet, it can seem as though you can create your own will using tools that you can easily find online.
Is it wise to put an estate plan together on your own without any legal advice? This is a question that the people at the highly respected website and magazine Consumer Reports were interested in answering several years ago. To do just that, they launched an initiative that would give them some insight into the efficacy of DIY estate planning, or the lack thereof.
They assigned staff members to create last wills using downloads and worksheets that were being offered by three of the leading purveyors of do-it-yourself legal documents. In addition to wills, they actually used online tools to produce a few other legal documents that are not related to estate planning. Of course, we will stick to the last wills here.
Once the documents were in their hands, they had to find legal scholars that were qualified to examine them. Gerry Beyer from Texas Tech University School of Law was engaged, along with Norman Silber, a legal expert from Yale University. The third set of experienced eyes belonged to Hofstra University contract specialist Richard K. Neumann.
At the end of the process, they determined that there were unnecessary limitations in these templates. They found that it is unlikely that the DIY products that are on the market would meet your needs unless your intentions are extremely simple, like leaving everything to your spouse.
The fact that you really can’t trust boilerplate documents that you can get online is only one part of the equation when it comes to the shortcomings of do-it-yourself estate planning. As a layperson, how would you know what documents you should use?
And yes, we are using the plural, because a well-constructed estate plan will cover multiple bases.
When it comes to asset transfers, a last will is not your only option, and in fact, it is not the right choice for many people. A will must be admitted to probate, which is a costly and time-consuming process that strips your family of privacy.
If you were to use a revocable living trust instead, the drawbacks of probate would be avoided. There are additional benefits that can be taken advantage of as well, like the ability to instruct the trustee to distribute limited assets over an extended period of time to protect a spendthrift heir.
This is just one of numerous different types of trusts that can be utilized when you are planning your estate. The ideal choice will depend upon the circumstances, and this is why it is important to discuss your unique situation with a licensed estate planning attorney before you make any impetuous decisions.
Getting back to the concept of multiple different objectives to address, end-of-life issues should be confronted when you are planning your estate. A significant percentage of elders become unable to make sound decisions at some point in time due to Alzheimer’s disease or dementia that is triggered by some other underlying condition.
If you have a living trust, you could name a disability trustee to manage the assets if you become unable to do so yourself. You can also add a durable power of attorney for property to give someone the ability to make decisions on your behalf concerning property that is not in the trust.
A durable power of attorney for health care decision-making will also be part of a typical incapacity plan. This is an advance directive for health care, and a living will is another advance directive that should be included. With this type of will, you state your preferences regarding the utilization of artificial life-sustaining measures.
We have prepared a very useful worksheet that you can use to gain some additional insight into the estate planning process. It is being offered free of charge, and you can visit our worksheet download page to get your copy.
People that are serious about their estate planning efforts are interested in attending to every detail. This is wise, because the matter boils down to the final gifts that you will be able to give to the people that you love the most. The simpler and more efficient it is, the better for them, so you would naturally be concerned about the time frame after you are gone.
There is no cookie-cutter, one-size-fits-all estate plan, so the waiting game, as it were, will depend upon the way that you plan your estate. Let’s look at some of the details.
If you use a last will, you name an executor to handle all of the tasks that must be completed to get the assets into the hands of the inheritors. The executor is not allowed to act independently. After your passing, the executor would admit the will to probate, and the court would supervise the estate administration process.
When probate enters the picture, your heirs will not receive their inheritances shortly after your passing. The first order of business for the court would be to determine the validity of the will, and to this end, any party that wants to issue a challenge can take advantage of this window of opportunity.
Creditors must be notified, and they are given a certain amount of time to come forward seeking satisfaction. The executor would have to identify and inventory all the assets that comprise the estate, and appraisals and liquidations are typically going to be necessary.
All in all, the best case scenario would be 6 to 8 months to a year. More complex cases, like a contested estate situation, can take considerably longer. For example, it took well over a decade for the Anna Nicole Smith case to run its course.
It should be noted that this is not the only drawback of probate. Considerable expenses accumulate, and this money reduces the amount of the inheritances that will eventually be passed along to the heirs. There is a loss of privacy as well, because probate records can be accessed by the general public.
A lot of people that do not look into the subject closely assume that a last will is the right asset transfer vehicle to benefit your heirs. They are under the impression that trusts are only utilized by very wealthy people that have estate tax concerns or other complicated situations to address.
While it is true that there are trusts that are beneficial for high net worth individuals, these would be irrevocable trusts. There is another type of trust called a revocable living trust that can be ideal for “the rest of us" and actually benefit your heirs.
When you use a revocable living trust as the centerpiece of your estate plan, you maintain complete control of the assets, because you would act as the trustee and the beneficiary while you are alive and well. You name a successor trustee to take over when the time comes, and you name your heirs as the beneficiaries. After your passing, the trustee would be empowered to distribute assets to the beneficiaries in accordance with your wishes as stated in the trust declaration.
These distributions to beneficiaries would not be subject to the probate process and the undo time consumption that goes along with it. Many of the other drawbacks would be avoided as well, and a living trust would provide additional advantages. For one, you can include a spendthrift clause to protect assets that you are leaving to someone that does not manage money effectively.
Our doors are wide open if you would like to discuss your estate planning objectives with a licensed attorney. You can schedule a consultation right now if you give us a call at 775-823-9455. There is also a contact form on this website that you can use to send us a message.
