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Probate is just the fancy term of distributing the assets to the right people through the proper court proceedings. Basically, this is what happens when you don’t do any estate planning, or at least very little. Probate court is for those who have no trusts and have assets that were not titled as joint tenants with rights of survivorship.
For example, let’s say you die and have a house and a couple of bank accounts, all titled in your name only. You are married, and the bank accounts were acquired during the marriage, but the house you owned before marriage. That is important because the probate court is going to want to know what property is separate property and what property is community property depending on what state you live in. Nevada is a community property state, which means that everything that was acquired during the marriage is deemed to be community property, so half of it is your spouse’s, whether their name is on it or not. Those community assets, when they go to probate, also get passed to the spouse upon your death.
Compare that with separate property, which means that however it is titled, it is presumed to be that person’s separate property. What that means in probate court is that we now have to follow that state’s intestacy (distribution) laws. In Nevada, for example, because the house was yours before marriage, it is separate property. Assuming you have more than one child, that house will be split, 1/3 to spouse and 2/3 are divided equally among the kids. If you think about this, and in most cases, this is a second marriage scenario, the spouse now owns the house with your kids, not hers. This can lead to a lot of fights.
Now, we do need to mention that if you have a will, the intestacy laws do not apply. The court is going to simply follow what you’ve outlined in the will, but you still have to go through the same steps, procedures, and fees that are required with non-will probate.
That is just the distribution part of probate as well. We still need to get a person named in charge of the estate, guardian of the minor children (you don’t want to leave that up to the government, do you?), etc. The general rule for probate court is that you will spend at least 5% on attorney’s fees and court costs, and the assets will be tied up for around six months or longer. Now, that can vary depending on the size of the estate.
In Nevada, there are four types of probate matters that the estate could go through that depend solely on the value of the estate. Let’s talk about each one.
What is an Affidavit of Entitlement?
If the total estate value, meaning everything added up together, is less than $25,000, you don’t even have to go through probate court. Nevada law provides that you and your fellow heirs can sign an affidavit of entitlement stating that you are the rightful heirs of the estate, that the estate had no debt (if they did have debt, this might make this not an option), and that the value of the estate is less than $25,000. The bank or DMV then has to honor that affidavit and distribute all assets to the heirs. It must be signed in front of a notary public, and if you lie on it, you can be held in contempt of court.
The Affidavit of Entitlement is really for those super small estates or if you forgot to put one or two things into your trust.
What is a Set Aside?
A Set Aside probate is where the estate is over $25,000 but under $100,000. If the total estate is less than $25,000, you don’t have to go through probate court but simply sign an affidavit stating who the rightful heirs are. The set aside is great because it is an expedited probate court process. It only requires one hearing, and then, assuming the court agrees and no objections are made, they will grant an order to give the heirs the money/assets. The typical timeline for a set aside is around three months.
What is Summary Probate Administration?
A Summary Probate Administration is when the estate is over $100,000 but less than $300,000. It requires a minimum of two hearings, usually more, and we do have to file a 60-day notice to creditors. Once again, if there are objections or delays in selling the property, it can add to the timeline and cost, but the typical timeline is around six to nine months.
When is Full Probate Administration Necessary in Nevada?
This is probate for estates with assets over $300,000. This requires a minimum of two (but usually more) hearings, a 90-day notice to creditors, and publication of all hearing dates. The timeline for this is nine months or longer.
Everything mentioned above is a very basic overview of the probate process in Las Vegas, Nevada. Each case will be different, and so will the timeline. Plan on delays and frustration because the court systems are overworked, especially probate, where lots of people are dying, and few have their affairs fully in order.
While we definitely guide you through the difficult Nevada probate process, hopefully this serves as a reminder to stop delaying and get your estate planning done now so that your heirs will not have to go through the same mess you are dealing with.
What is Joint Tenancy?
We hear potential clients all the time say, ‘I don’t need a trust because I already put my spouse, kid, grandkid, etc., on the title of my accounts and/or house.’ While it is true that doing this can avoid probate, it only prolongs the time until probate is needed, and it isn’t the best way to transfer assets. Let us show you why.
Let’s say Mom owns her house outright. She realizes that she is getting older and might actually die, so she puts the oldest of her four kids on the deed with her. Her thought process is that ‘when I die, it will go automatically (sort of true) to my son, and then he can split it with his siblings.’ The first problem here is that nothing happens automatically. The son still has to terminate the joint tenancy upon Mom’s death. It is not a complicated process as long as you have access to the original deed that created the joint tenancy and a certified copy of the death certificate. Once you have those two items, we can help draft an affidavit terminating joint tenancy so that it can go solely into Son’s name.
The next issue we have with this scenario is that upon Mom’s death, she thinks Son will split it with his siblings. While in most cases, Son will do just that, he has no legal obligation to do so. Once Mom dies, the house is his, and the siblings have no right to get any part of it from him. If he wanted to, he could sell it and keep all of the money for himself. Or let’s say that Son did have good intentions to split it with his siblings, but he dies shortly after Mom and never transferred the house into all four siblings’ names. Because it’s in his name, the house has to go through probate court, and just like we talked about in the probate section, that house is going to be considered his separate property and distributed according to law. If he is married and has kids, the wife now owns 1/3 while the kids own 1/3, and you can bet they aren’t going to share that with Son’s siblings at that point, and they don’t have any legal obligation to do so. It will ruin the family relationship, but that happens more often than not when it comes to inheriting money.
The last problem with joint tenancy is from a liability perspective. As mentioned above, Mom owns the house outright. Let’s say that while Mom is living, Son causes a car wreck that is pretty bad and gets sued for it. Well, because he is listed as a co-owner of Mom’s house, her house is now subject to the lawsuit, and the injured party can sue, foreclose, and collect on Mom’s house to pay for Son’s debts. It’s not just the house they can come after either; it could be anything to which he is listed as a joint owner. This is one of the best ways to make sure you don’t have any asset protection.
So, how can you avoid all these pitfalls? The short answer is a living trust. Mom can name Son as the Successor Trustee when she passes and he could then manage the house for the benefit of his siblings, but he can never take it for his sole benefit. It also never becomes a liability concern either because the property never goes into Son’s name, so even if he gets sued, that property never shows up in his name and cannot be part of the lawsuit or collections.
Now, each situation is different and cannot follow a blanket roadmap. We recommend that you speak with an attorney about your situation.
Schedule a Free Consultation with Experienced Nevada Probate Lawyers Today
After someone passes away, there is generally an individual named in the will (if there is a will) who is to become responsible for taking the estate through probate court. It will be up to this person to inventory remaining assets, pay estate taxes, settle outstanding debts, identify and locate named beneficiaries, and distribute assets according to the decedent’s wishes. This can be a complex, costly, and time-consuming process in Nevada. We strongly encourage anyone going through the Nevada probate process to retain professional legal counsel from experienced probate attorneys.
To learn more about the probate process and how our legal team can assist you during this legally complex and emotionally difficult time, please get in touch with our Las Vegas law office to schedule your free 30-minute consultation today.
You can reach our Las Vegas law firm at 702-664-8858.