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.
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.
In some instances, a client will come to us looking for help because of a bad situation that has developed due to a lack of informed planning. We do what we can under these circumstances, and there are damage control strategies that can sometimes be implemented.
These situations are a bit frustrating for us, because we know how easy it could have been to avoid the difficulties. With this in mind, we will look at a handful of common estate planning mistakes that are made in an effort to increase awareness.
If you have been successful enough to be able to leave behind a suitable legacy for your loved ones, a last will may not be the right choice for you as an asset transfer vehicle. The notion that trusts are only for the wealthy is a major misconception that is harbored by far too many individuals that are not well-informed.
As we will look at in another section, there are certain types of trust that can be useful for people that have advanced estate planning concerns, like death tax exposure. This being stated, a revocable living trust is a legal device that can be useful for a wide range of people that are not in the upper financial stratosphere.
A living trust would actually not be the right choice for high net worth individuals. You retain incidents of ownership when you establish this type of trust, because you can in fact revoke the trust, and you can act as the trustee and the beneficiary while you are alive and well.
This is a positive for many people that would not like to surrender control of their assets permanently. It would not be good for those that want to get assets out of their own name for certain reasons.
One of the major benefits that you gain through the creation of a revocable living trust is the avoidance of probate. This is a time-consuming, intrusive, and expensive legal process that would enter the picture if you use a last will to state your final wishes.
All the assets are consolidated in one place, and this is another positive. Plus, with a last will, there is an open forum for disgruntled parties to present estate challenges. It is much more difficult to contest the terms of a revocable living trust.
Unfortunately, countless families find out about the pitfalls of wills and the probate process when it is too late to do anything about it.
Another problem with a last will is the fact that, generally speaking, you would be facilitating lump-sum asset transfers to the people that are named in the document. A spendthrift inheritor could burn through their inheritance much too quickly and have nowhere to turn for assistance later on.
If you use a living trust instead of a will, you could include a spendthrift provision. This would allow the trustee to distribute assets to the beneficiary incrementally in accordance with your wishes. The resources would also be out of the reach of the beneficiary’s creditors.
As we have stated, you can act as the trustee of your living trust while you are alive. In the trust declaration, you name a successor trustee to handle the trust administration tasks after you pass away. Some people choose someone that they know personally that they trust in a broad sense, but this can be a major blunder.
It takes a significant amount of financial acumen to administer a living trust effectively, and there are legal guidelines that must be followed to the letter. The trust administration process can be time intensive, and the trustee could face personal liability issues if mistakes are made.
You can avoid these potential problems if you engage a professional that offers fiduciary services. We would be more than glad to act as the trustee of your living trust or any other type of trust that you create during the estate planning process.
When you have a professional at the helm, you can be certain that your trust will be administered properly.
We are here to help if you would like to consult with a licensed estate planning attorney. You can send us a message to request a consultation appointment, and we can be reached by phone at 775-823-9455.
They say that the only two certainties of life are death and taxes, and everyone is well aware of the April 15th date that approaches all too rapidly. With few exceptions, most people are diligent about making preparations for tax day. Yet, for some unknown reason, the majority of the same folks totally ignore the other inevitability that we will all face at some point in time.
A while back, a website that is focused on legal matters did some research to get a feel for the estate planning preparedness of Americans. The results were quite surprising, but not in a good way. Overall, 57% of the adults in our country are going through life without any estate planning documents at all.
When you look at this figure, you would naturally assume that people that are younger are going to bolster the statistic, and they do to some extent. A rather eye-popping 92% of individuals under the age of 35 are rolling the dice without a will or a trust or any type of postmortem asset transfer plan.
You can say that people in this age group are rarely going to pass away, and generally speaking, this is true. However, accidents happen every day, and younger individuals are stricken by catastrophic illnesses. It is rather arrogant to assume that you will never be “one of the statistics.”
When you are talking about people in their mid-20s to mid-30s, a significant percentage of them are parents of dependent children. Anyone that is responsible for the well-being of minors should certainly cover all their bases with regard to any eventuality that can come down the pike.
The statistics continue to tell a sad tale when you look at the older age groups. Only 44% of baby boomers, which are people between 45 and 64, have estate plans in place. A mind-boggling 22% of senior citizens over the age of 65 have done nothing to prepare for the inevitable.
If you pass away without any estate planning documents, the condition of intestacy would exist. Interested parties would inform the probate court, and the court would supervise the intestate estate process. A personal representative would be named to serve as the administrator; this role is similar to that of an executor.
There are numerous different circumstances that can come into play that would impact the situation, and the exact details vary on a case-by-case basis. Depending on your true wishes, your family dynamic, and the nature of your assets, the outcome can be disastrous.
When final debts have been paid and the court has made all its determinations, the remaining assets would be distributed in accordance with the intestate succession laws of the state of Nevada.
In fairness, it is possible that this would wind up being consistent with what you would have done, but it is very unlikely. And even if it is, there would be a lot of totally unnecessary expenditures and time consumption during the probate process.
One of the questions that was asked in the survey that we have been looking at is somewhat humorous, but it is instructive at the same time. Right around one third of people said they would rather have a root canal, give up sex for a month, or do their taxes than engage in the estate planning process.
We can say with absolute certainty that the real experience is nothing to dread, and we go the extra mile to make our clients feel comfortable on every level. The reality is, estate planning is one of the core responsibilities of adulthood, and there is no point in running away from it.
Personalized attention is the key to a well-constructed estate plan, because there is no one-size-fits-all approach. This is exactly what you get when you make a connection with our firm. If you are ready to do just that, you can call us at 775-823-9455 to set up a consultation.
You can alternately send us a message through our contact page and we will get back in touch with you promptly.
The estate planning lawyers at our firm place an emphasis on education, because far too many people have misconceptions about wills and trusts. One of the most common ones is the idea that a will is the only choice because trusts are "only for very wealthy people." Trusts are often misunderstood as being only useful for the rich.
Yes, very high net worth individuals can benefit from the utilization of certain types of trusts. These are going to be irrevocable trusts that are used for estate tax avoidance, income tax planning, and asset protection. However, irrevocable trusts are rarely used in an individual's estate plan. A revocable living trust is a tool that is often the best choice for a wide range of different people that do not consider themselves to be among the financial elite. Let’s look at a handful of the benefits that living trusts provide.
A lot of people are under the assumption that you surrender all personal control of assets that you convey into a trust. This is not the case when it comes to a living trust. A "trustee" is the person that administers, or manages, assets in a trust, and you can be the trustee for your own trust. When you establish the trust agreement, you name a successor trustee to handle these chores after you are gone. You can name someone that you know, or you can use a professional fiduciary such as an attorney, certified public accountant, trust company or the trust department of a bank.
Other people assume that they are "giving away" their estate by transferring property into a trust. A "beneficiary" in the trust is the person that enjoys the use of the assets in the trust. You will be the beneficiary and utilize assets in the trust as you see fit for the remainder of your lifetime. You also name a successor beneficiary to receive distributions from the trust after your death. If you choose to do so, you can name multiple beneficiaries.
In other words, since you manage and enjoy your own estate in the trust during your lifetime, you retain full control and use of your property without limitation. Your control is absolute, because you are not forever beholden to the original terms that you set forth when you established the trust declaration. You can change the beneficiaries, and you can name a different trustee. Plus, you can convey additional property into the trust at any time. The trust is a tool that ensures your estate will be managed by the proper person for your designated beneficiaries upon your death.
In fact, you can dissolve the trust entirely if you ever want to because after all, it is a revocable living trust.
As we touched upon above, you can use a professional to act as the trustee after you pass away. Many people will go this route for a number of different reasons. For one, there would be no succession concerns, because the professional trustee (such as a law firm or a bank) will almost always be there upon your death. Secondly, there is going to be professional oversight with regard to the way the trust is administered.
Another benefit is the fact that a professional will know how to invest the trust assets wisely. Lastly, you can rely on the fiduciary to show no favoritism and follow your instructions to the letter without emotion.
You do not have to instruct the trustee to distribute everything in the trust right after your passing. For example, you could allow for set monthly distributions to the beneficiaries, or you could direct the trustee to distribute only the earnings without dipping into the principal at all. Some people will allow for larger, lump sum distributions when the beneficiaries reach certain age thresholds.
Of course, you could give the trustee latitude with regard to emergency distributions. The exact details are up to you, and this is another great benefit that you gain if you utilize a revocable living trust as your primary asset transfer vehicle.
Alzheimer’s disease strikes approximately four out of every 10 people that are 85 years of age or older. Of course, some people become unable to make sound decisions for other reasons, and incapacity can strike at a younger age. To account for this, you could empower the successor trustee, or a different individual or entity, to act as the trustee in the event of your incapacity.
If you would like to learn more about Reno wills and trusts and other estate planning matters, attend one of our upcoming Webinars. They are free to attend, and you can get all the details if you visit our Webinar information page. Or you can call us to arrange a free consultation to discuss living trusts, or other estate planning matters, at (775) 823-9455.
Although many people equate “estate planning” with having a will, there are many advantages to having a trust rather than a will as the centerpiece of your estate plan. While there are other estate planning tools (such as joint tenancy, transfer on death, beneficiary designations, to name a few), only a trust provides comprehensive management of your property in the event you can’t make financial decisions for yourself (commonly called legal incapacity) or after your death.
One of the primary advantages of having a trust is that it provides the ability to bypass the publicity, time, and expense of probate. Probate is the legal process by which a court decides the rightful heirs and distribution of assets of a deceased through the administration of the estate. This process can easily cost thousands of dollars and take several months to more than a year to resolve. In Nevada, a gross estate of $400,000 in assets under NRS 150.060(4) is subject to $10,000 in fees plus court costs. Larger estates have an even more onerous probate fees. Or course, not all assets are subject to probate. Some exemptions include jointly owned assets with rights of survivorship as well as assets with designated beneficiaries (such as life insurance, annuities, and retirement accounts) and payable upon death or transfer on death accounts. But joint tenancy and designating beneficiaries don’t provide the ability for someone you trust to manage your property if you’re unable to do so, so they are an incomplete solution. Additionally, joint tenancy creates pitfalls for income tax purposes versus a trust. Last, having a will only does not avoid probate.
Of note, if your probate estate is small enough - or it is going to a surviving spouse or domestic partner - you may qualify for a simplified probate process in Nevada. In general, if your assets are worth $100,000 or more, you will likely not qualify for simplified probate and should strongly consider creating a trust. Considering the cost of probate should also be a factor in your estate planning as creating a trust can save you both time and money in the long run. Moreover, if you own property in another state or country, the probate process will be even more complicated because your family may face multiple probate cases after your death, one in each state where you owned property - even if you have a will. Beyond the cost and time of probate, this court proceeding that includes your financial life and last wishes is public record. A trust, on the other hand, creates privacy for your personal matters as your heirs would not be made aware of the distribution of your assets knowledge of which may cause conflicts or even legal challenges.
A common reason to create a trust is to provide ongoing financial support for a child or another loved one who may not ever be able to manage these assets on their own. Through a trust, you can designate someone to manage the assets and distribute them to your heirs under the terms you provide. This will also protect an inheritance from being lost to a child’s soon to be ex-spouse in a family law matter. Giving an inheritance to an heir directly and all at once may have unanticipated ancillary effects, such as disqualifying them from receiving some form of government benefits, enabling and funding an addiction, losing it in a family law matter, or encouraging irresponsible behavior that you don’t find desirable. A trust can also come with conditions that must be met for the person to receive the benefit of the gift. Furthermore, if you ever become incapacitated your successor trustee - the person you name in the document to take over after you pass away - can step in and manage the trust’s assets, helping you avoid a guardianship or conservatorship (sometimes called “living” probate). This protection can be essential in an emergency or in the event you succumb to a serious, chronic illness. Unlike a will, a trust can protect against court interference or control while you are alive and after your death.
Trusts are not simply just about avoiding probate. Creating a trust can give you privacy, provide ongoing financial support for loved ones, and protect you and your property if you are unable to manage your own assets. Simply put, the creation of a trust puts you in the driver’s seat when it comes to your assets and your wishes as opposed to leaving this critical life decision to others, like a judge.
To learn more about trusts - and estate planning in general, including which type of plan best fits your needs - contact Anderson, Dorn & Rader, Ltd. today at 775-823-9455 to make an initial consultation appointment with one of our estate planning attorneys or make a reservation to attend one of our free estate planning Webinars online HERE.
It is important to understand that estate planning documents do not exist in a vacuum. Estate planning is one of the most technical and dynamic areas of the law. Properly planning an estate requires consideration of federal and state tax issues, state property law, state probate law and state trust law. Estate planning documents must be carefully customized to meet each individual’s unique circumstances and objectives. If they are not, unintended, and often costly, consequences may result.
Suppose you use a generic template that you find online to create a last will and testament or revocable living trust. Are you sure that the documents that you wind up with will stand up to any challenges that may present themselves after your death? Are you sure the tax sensitive provisions of your documents have been properly considered for your particular circumstances? Could there be conflicting clauses that require your family to go to court to interpret the document after you have passed? Has the document been thoughtfully drafted under state law so that your beneficiaries’ inheritances are protected from a divorcing spouse or other potential creditors?
Another thing to consider is best explained by way of example. Let's say that you never played golf before. You look into the bag and you see a lot of clubs, but you really don't know what club you should use. You may not use the right clubs as you try to negotiate the course without any information. The same is true of estate planning. There are numerous different legal instruments that can be utilized. Just arbitrarily deciding which ones you are going to use in a DIY last will and testament or revocable living trust is simply reckless.
These are a few things to think about, but if you would like to learn more of the facts we urge you to download our free report on DIY estate planning. This special report goes into a good bit of detail about the dangers of do-it-yourself wills and living trusts.
We urge you to download your copy of the report. Access will be granted if you follow the simple instructions that you see after clicking this link: The Dangers of DIY Wills & Living Trusts.
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.
On the Internet there are marketers that sell generic estate planning documents like wills and trusts.
Statistics tell us that most people don't have a comprehensive estate plan in place. Some of these people finally decide to put the procrastination behind them and they start searching for solutions. They come upon one of the sites, and they see an easy answer because the marketing materials can be convincing.
It is important to recognize the things that you can do on your own with a little bit of guidance and the things that are better left to licensed professionals. Consumer Reports, the highly respected magazine that has been informing people about the quality of various products and services for many years, advised against DIY wills last year.
Legal professors who examined documents constructed with online worksheets and downloads saw a number of different problems with them.
We endeavor to provide legal information that is truly accurate, covering every aspect of estate planning. To this end we have joined with the American Academy of Estate Planning Attorneys and compiled a series of special reports that are available for download on our website.
These reports examine wills, trusts, powers of attorney, legacy planning, asset protection, special needs planning, estate administration, and a number of other topics.
You can download these reports absolutely free of charge. To reach the page that contains a list of the reports and a brief description of each of them simply click this link: Free Nevada Estate Planning Reports.
If you have further questions after reviewing the information contained in the reports simply contact our firm to request a free consultation.
Imagine living with someone for 10 years as a committed partner. Your partner is diagnosed with a terminal illness and he or she creates the Last Will making you the executor and the sole heir. You have known this individual for 20 years and you have been made aware of the fact that he or she has never been married and had no children.
After your beloved one passes away you will be grieving and anxious to take care of final arrangements in accordance with the wishes of the decedent. This is the situation that a woman named Flora Enchinton experienced recently. She was the partner of the recently deceased actor Sherman Hemsley. He was the individual who portrayed the character George Jefferson on the classic television sitcom The Jeffersons.
Hemsley apparently lived a simple life. He resided in El Paso, Texas with Enchinton and this is where he died. He reportedly had a much different personality than that of his on-screen alter ego. Hemsley was a shy, quiet, and unassuming man who had no interest in publicity or attention.
Flora Enchinton is being forced to deal with a difficult situation. The estate is being challenged by a Richard Thornton, who contends that he is the actor's brother. For some reason Thornton thinks that he is entitled to the assets that Sherman Hemsley accumulated throughout his life.
Because of the realities of probate law the court must hear his arguments and they are doing just that. As of this writing the body of the late actor is being held at the funeral home, and needless to say this is a source of great dismay for Flora Enchinton.
When you hear about the pros and cons of Last Wills versus revocable living trusts you may decide that, for you and/or your family, the latter choice is a better one. One of the best things about revocable living trusts is the fact that the resources that you utilized to fund the trust can be distributed to your heirs outside of the process of probate.
Probate is a legal proceeding that can be quite time-consuming. Even in simple uncontested cases involving pretty straightforward property transfers and little or no debt it can take a number of months, up to about a year. In more complex cases it can take years.
There is something to remember, however, when you are executing a revocable living trust. You are likely to still be in possession of some resources that you have not placed into the trust at the time of your passing.
If you do nothing to account for these assets their transfer would indeed be delayed as the probate process ran its course.
Making sure that you have a pour-over will to account for your remaining personal assets is something that is routine for experienced probate lawyers. With this instrument you express your desire to have these remaining resources "poured over" into your revocable living trust.
Some people and even inexperienced advisors assume that a pour-over will avoids probate on those assets that were not funded into the trust. Just the opposite is true. Experienced attorneys will provide a document that assigns non-titled assets to the trust, such as art work and furniture. They will also give detailed instructions as to how to place specific assets into your trust. Properly drafted powers of attorney allow others to place forgotten assets into the trust if you are incapacitated.
People who use do-it-yourself estate planning downloads, or place their trust in inappropriate advisors, may never include such details. These are good examples of why it is always advisable to engage professional expertise when you are executing important legal documents.
There is a lot to take into consideration from a legal perspective when preparing a Last Will. It is not something that you would want to undertake on your own without any professional advice. While it is true that a will that you draft yourself can be valid the typical layperson could omit essential language or use language that results in unintended consequences.
Some do-it-yourself types may recognize the fact that they need guidance but are unwilling to engage professional help. If you start scouring the Internet you will find resources that will sell you worksheets and downloads that you can use to construct your own will. How effective are the products that these sites sell? This is a question that Consumer Reports had, and they put three of the most popular sites under the microscope.
Consumer Reports constructed Wills using these resources and passed them along to a trio of leading experts in the legal field. After hearing the responses that they got from the law school professors they reached a verdict: Don't utilize these DIY Wills if you want to be certain that your true wishes are carried out after you pass away.
Arranging for the transfer of your assets to those that you love the most after you pass away is a significant act, and it is one that is best taken with the assistance of professional guidance.
There are those who like to roll up their sleeves and do things for themselves, and there is nothing wrong with taking some matters into your own hands when it is appropriate. In a lot of cases you save money while you actually enjoy completing a DIY project.
It is important, however, to know where to draw the line. When it comes to drafting sensitive legal documents you would probably do well to steer clear of do-it-yourself documents, even though they are sold on the internet.
When you use Last Will worksheets and downloads that you find on the web you are leaving a lot up to chance. In fact, Consumer Reports magazine advises against utilizing these online outlets for several reasons.
They consulted with three different legal professionals who examined Last Will documents that were constructed utilizing the products that are offered by three of the leading do-it-yourself legal document websites. Their conclusion was that the wording could be misconstrued and that conflicts in clauses could be contained within these Last Wills. Many of these companies do not take into account the specific laws of your state, so it unnecessarily extends the probate case.
Consumer Reports ultimately stated that it is best to engage the services of a qualified estate planning lawyer when you are planning your estate rather than depending on a download that you find on the internet.
So the bottom line is this: Yes, anyone can legally draw up a last will. However, if you want to be certain that it actually stands up in probate court and will distribute your assets according to your wishes, it is best to draw up your last will with the benefit of expert guidance.
As estate planning lawyers , we often remind their clients about the need to take action with regard to updates when life changes take place. One of these is a change in marital status. If you don't take the appropriate action you could be leaving behind quite a tangled mess and people that you love may suffer the consequences.
The matter of the estate of popular painter Thomas Kinkade is a case in point. The self-proclaimed "Painter of Light" died on April 6 of this year at the age of 54 due to acute intoxication via the use of alcohol and Valium.
Kinkade's estate was estimated to be valued at around $66 million when he passed away but of course earnings will be ongoing as his work continues to sell.
About two years prior to his death Kinkade's wife Ninette filed for divorce but it was not finalized at the time of his passing so he was legally married. The couple had an estate plan in place and it was professionally prepared.
However, Kinkade had a live-in girlfriend named Amy Pinto-Walsh. She has produced handwritten wills signed by Kinkade that leave her $10 million and some real property.
Nanette is going to contend that these documents are not valid because her husband was not of sound mind when he executed them. Experts say that the holographic wills must have been authored when the painter was extremely intoxicated given the poor nature of the handwriting.
Clearly, you must make the appropriate changes when you enter into a new relationship if you want to provide for your significant other. Impairment, however, may occur from the effects of intoxication as from dementia. Given the nature of this issue and the amount of money involved, we can expect expensive legal wrangling for a very long time.