Practice Areas

Probate:

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 planning or at least very little. Probate court is for those who have no trust and have assets that were not titled as joint tenants with rights of survivorship.

For example, lets 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 ½ of it is your spouses whether her 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 states intestacy (distribution) laws. In Nevada for example above 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, spouse now owns the house with your kids, not hers. This can lead to a lot of fights.

Now I 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 a 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 attorneys fees and court costs and it will tie up the assets for around 6 months or longer. Now that can very depending on the size of the estate.

In Nevada there are 4 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.

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 for 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 may 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. 

Set Aside

A Set Aside probate is where the estate is over $25,000 but under $100,000. If they 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 giving the heirs the money/assets. Typical time line for a set aside is around 3 months.

Summary Administration

A Summary Probate Administration is when the estate is over $100,000 but less than $300,000. It requires a minimum of 2 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 6-9 months.

Full Probate Administration

This is probate for estates with assets over $300,000. This requires a minimum of 2 but usually more hearings a 90 day notice to creditors and publication of all hearing dates. The time line for this is 9 months or longer.

Everything mentioned above is a very basic shell overview of the probate process. Each case will be different and so will the timeline. Plan on delays and frustration because the court systems are overworked, especially probate because lots of people are dying and few have their affairs fully in order.

While we definitely guide you through the difficult 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.

 Joint Tenancy

I hear potential clients all the time say, I don’t need a trust because I already but 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 is only prolonging the time until probate is needed and it isn’t the best way to transfer assets. Let me 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 4 kids on the deed with her. Her though 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. 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 think 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 4 siblings names. Because its 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 now 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 on Mom’s house, her house is now subject to the law suit and the injured party can sue, foreclose and collect on Mom’s house to pay for Son’s debts. Its 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. I still recommend that you speak with an attorney about your situation.

Estate Planning:

Estate Planning is a wide umbrella that covers multiple aspects of how to plan for your future and your eventual death. Most people think of estate planning as only death planning when related to the legal realm but that simply isn’t the case. Estate planning does include many of those aspects such as a trust, will, health care directives, power of attorney, and avoiding probate court but it also includes things like business succession planning, asset protection, gifting, incapacity and so on. Because each client we meet with has different circumstances with their money, time of life, health issues, etc. each estate plan needs to be carefully crafted to the individual and not just the same exact word for word document that some firms or companies give to each client.

When we meet for estate planning we want to know about your goals and wishes, how your family relationships are, what concerns you have and what things are most important to you. If you are a business owner your estate plan needs to include the business succession plan, who is going to run it and who is going to profit from it or is it to be sold? Not every decision needs to be made or finalized in that first meeting, but it is a chance for us to start the conversation and get things moving in the right direction. The consultation is also a time for you to ask questions so that we can determine if it is a right fit for both of us to move forward.

Just like any plan, an estate plan has to be flexible because your circumstances will change over time. When we for m a new client relationship we want this to be an ongoing and open relationship so that together, we can make sure that we accomplish what is right for you.

It doesn’t matter if your estate is simple or complex, every individual and couple deserves the right to meet with a qualified estate planning attorney to avoid probate court and feel relief of knowing that their wishes will be carried out.

Trusts

An important part of any estate plan is a trust. There are multiple types of trust out there, but they fall into two main categories, irrevocable or revocable trusts.

The revocable trust is sometimes referred to as a living trust. This is because the trust is flexible, a living document that can be amended while the trustor, person who set up the trust, is still living. The primary reason to set up a revocable trust is to avoid probate court. If you set up this type of trust you usually are also the person managing the assets of the trust as well. We call this person the trustee and they are like a manager of the business. They sign the checks, make the investment decisions, pay the bills etc.

Because a revocable trust becomes the owner of all of your assets, when you die there is nothing in your name and therefore nothing to go through probate court. A trust clearly states where the money or assets go if something happens to you, who is in charge of it and the terms for giving away the money or administering it for someone’s benefit. A revocable or living trust is truly amazing because it allows the most flexibility and control without any negative consequences. It doesn’t even affect your tax status. The hardest part of dealing with a revocable trust is transferring the assets into the name of the trust which is referred to as funding the trust.

Irrevocable Trusts are a more complicated estate planning tool because as the name suggests, this type of trust can’t be revoked or amended. We typically use these types of trusts for asset protection or estate tax planning. In order to get the protection of the irrevocable trust you have to give up some control meaning you aren’t the beneficiary, the trustee or possibly both. Many people have the misconception that why would you ever do an irrevocable trust and give up control. The simple answer to that is one it depends on your circumstance and two, you are actually taking control and preserving your assets instead of leaving it up to chance.  We see this a lot with planning for a long term illness and not wanting to spend every penny you own before Medicaid or the VA kicks in to help. With Medicaid Trusts or a VA Trust you can qualify for those benefits without having to spend down every penny you own. I’m not talking about anything illegal here. These are benefits you paid into for years and we just want to help you get that benefit that you are entitled to.

Wills

The Last Will and Testament is probably the most famous of all the estate planning documents because it is featured as the focal point in media after a person dies. While we have already mentioned in the Trust section that a trust is better that a will, a will is still a valid part of every estate plan.

If you have not done any planning a will is important because you are making your wishes known. The will does have to go through probate court but at least you are not leaving it up to the state law to determine who will inherit your assets.

The most important reason to do a will is to name a guardian of your minor children and a backup or two. Letting anyone petition the court to say that they want to raise your kids is a scary thought especially when the Judge has a wide discretion of who they can allow to take your kids. You want to consider putting in your will a person who thinks the same way you do. Would treat your kids the same way you would. Lives the same lifestyle as you, including, health, fitness, religious beliefs, work ethic etc. You also want to consider where they live and if they move often. Will they allow your family to visit (good or bad thing). Once again make the decision and don’t leave it in the discretion of the court.

Even with our clients who have trusts to avoid probate we always do a will for them. On top of the guardians of minor children issue, the will acts as a backup to the trust. If you forget to put an asset into the Trust or if you have everything in the trust and then die while you are supposed to get an inheritance then we would be in probate court. While sometimes it can’t be avoided, the will in this instance is what is referred to as a pour-over will. This pour over last will and testament simple says that all of the assets of the estate are to be given over to the trust and distributed according to those terms. This still gives the trust validity, the terms and carried out correctly and because the trust is the only name heir, there still remains some anonymity with the trust never becoming full public record.

The last way in which a will is still relevant is that you can specify what your final burial or cremation wishes are by a document that can be enforced by a judge instead of relying on your family or friends to do what they think is right.

Power of Attorney

The power of attorney or more accurately the asset power of attorney is something that can only be used while you are living. This document gives the named person to act on your behalf for financial matters. A power of attorney can specific, meaning a specific period of time or a specific type of matter such as signing to sell real estate. The power of attorney can be springing, meaning it doesn’t spring into effect until a doctor or two declare you incompetent or it can be general, for everything at any time.

When choosing a power of attorney be very careful to ensure the person is trust worthy. If it is a general power of attorney, they can sign any document for you at any time whether you approve or not. For example, they could go to the bank and empty your account or sell you home without your knowledge. The worst part is, your only recourse is against them. If the bank relies on a valid power of attorney, they can’t be held liable because you gave that individual the power. This is why we like the springing or specific power of attorney because it either places limits or doesn’t take affect until a professional gets involved.

Living Will and Health Care Power of Attorney/Health Care Directive

Just like an asset power of attorney gives authority to act on your financial behalf, a health care power of attorney authorizes an individual to make health care decisions on your behalf. This one does only take affect upon you being unable to make the decisions yourself. This is the document also referred to as a living will or Do Not Resuscitate (DNR). Each state usually has its own form that they like you to use if you are a resident of that state. It can be found online for free by Googling your State Name Health Care Directive.

On the health care power of attorney or living will form there is usually questions or spaces to write how you feel about pulling the plug, organ donation, feeding tube and more. On top of feeling this health care directive out fully and accurately, we encourage our clients to talk with the person they named as the health care power of attorney about what they chose, why they chose it and what the ultimate goal is. This way, no matter what the situation is, the health care power of attorney can make the right choice to accomplish your wishes.