TRUST ATTORNEY LAS VEGAS | PROBATES, TRUSTS, AND MORE
Hello and welcome to the trusted Trust Attorney Las Vegas podcast where we talk about all things that involve trusting someone, especially attorneys. I am your host, Blake Johnson. And today we’ll be keeping with the theme of estate planning. Uh, but today we’re going to take a different approach and talk about what happens if you don’t plan and you die with nothing in place. Uh, this is a topic known in the industry as probate or probate court. Um, sometimes different states call it succession. Uh, but it’s all means the same thing. Now, um, have a quote here from Benjamin Franklin. He said, in this world, nothing can be said to be certain except death and taxes. Probably one of the most, uh, repeated quotes you have out there. So if it is so certain that we’re going to die and that there’s going to, and then we have taxes, why don’t people do the planning for it?
Now, if you’re smart and you plan ahead and you know, income taxes, people probably do some sort of planning at least, cause it happens every year. And so it’s not, um, you know, some of that completely catches them off guard over and over again. Uh, but, you know, death, no one, no one really wants to think about that. Right? As Woody Allen once said, I’m not afraid to die. I just don’t want to be there when it happens. And so I think that’s why a lot of people don’t plan. They don’t want to think about what happens when they die. They don’t want to, you know, envision that a lot of people think that, um, you know, if they die and, uh, or if they start thinking about death and it’s going to bring death into their life. And, you know, I guess that could be a possibility, but I think you’re better off, um, you know, making the plan and thinking ahead.
But I digress. So let’s talk about what happens in probate court. Uh, cause that’s probate is just the fancy word for the court proceedings to distribute your assets to the people who are supposed to get it. Now, if you haven’t done anything at any planning at all, uh, the people who are supposed to get that, um, it’s going to depend on state law. Now each state is different, but a lot of them follow a similar guidelines. And so, um, you know, I guess let’s first talk about procedurally what would happen now if your assets are in Nevada. You know, cause that’s where I practice. We’re going to talk about in Nevada law, if your assets are under $25,000, you can do, you can avoid probate. That means we do an affidavit of entitlement. Basically you’re signing an affidavit affidavit saying that my mom died. I am her only child.
She doesn’t have a spouse that’s living. And so I am the rightful heir to that money. And so let’s say it’s a car and then you can take that signed and notarized to the DMV and they will issue the new title of the vehicle in your name. Now that has to be total estate value. That can’t be item by item. So if you have a car that’s worth 20,000 in the bank account that has 10,000 in that affidavit will not work because you’re over that 25,000 mark. Now, I will say that Nevada is probably one of the lowest limits, if not the lowest in the for Trust Attorney Las Vegas or the probate, uh, to go into probate a Utah, it’s a 100,000 before you have to go through probate. A California I believe is a 150,000. I wouldn’t quote me on that though. Arizona has two different tiers. Um, 75,000.
If it’s personal property and I think it’s a 100,000 if it’s real property. So you know, by comparison, Nevada is definitely on the low end scale. So what’s the next step? Well, if you’re under a hundred but over $25,000, that is a procedure in probate court known as a set aside. It’s very expedited. Um, basically it means we do one petition to the court, we have one hearing date and we don’t have to do a notice to creditors. Typically for something like this, you’d be looking around two months to get it done timeline. And uh, basically you petition the court saying, Hey, the estates under a hundred thousand, here’s the rightful people too to inherit it. We don’t, or if there are these debts and we’ll pay them out of the estate or you know, we don’t believe there’s any debts or there’s none that we know of and judge, please give us, you know, have a distributed to the right people.
And if they find that it’s under the 100,000 and that all that’s true, then they’ll will grant that order. The next step is a summary Administration. So that’s if you’re over a hundred thousand gross estate and um, under 300,000, basically this is a modified, a shortened version of the full probate procedures. Um, we have a shortened notice to creditor period. We don’t have to publish notice of the hearings unless, you know, we don’t know the addresses of the heirs. Um, and it makes it a little bit easier to kind of get through through the process. The minimum you can plan for a summary Administration. I would say if you’re lucky is four and a half months, I would say most likely you’re going to be in the, you know, six to seven month range, assuming you know, there’s no issues. And, and we can sell any, any houses or real property fairly quickly through that.
And then the last one is the full probate procedures. So it’s the full notice to credit creditors. You have to public notification, no public, um, notice of all the hearings, uh, you know, just a lot more procedural things that have to go on. And if you can avoid it, please, please do. A general rule of thumb for probate court is you’re gonna lose about 5% of the estate value to attorney’s fees and court costs. I’d say that’s on the low end side. And as I’ve talked about timelines, it ties up the assets for a long period of time. Now, if you’re a business owner, think about how this is going to affect your business when you die. Um, you know, if you’re having to have the court, the probate court, make decisions about your business and approve them, you know, that may kill your business cause you’re, you have to wait a couple of weeks to get a hearing date.
You know, you’ve got to get it approved and then, you know, convince a judge that’s right thing. And they may not know your business. They may not know your industry, they may not have any experience with businesses at all. Um, so it’s just not, you know, the greatest avenue. Leave that up to the court to make that decision. So, you know, same thing with any other assets. You know, you will have, you will have somebody who’s appointed as an administrator for the estate. Um, but anybody who’s related to you can petition and ask for that. And depending on who objects or who argues for it, that person may get, you know, the the right to be your administrator and handle your estate and your affairs. Now, once again, they can’t do anything without court approval, but they’re the ones writing the petition. They’re the ones carrying it out.
So, um, you know, more reason to do planning and pick the person that you want. The other part of probate is Yeo young kids. You’re going to leave it up to the court to decide who’s going to be their guardian. If you have done no planning. And that’s really a scary thought. Anybody really can come in and petition and say that they want to be the Guardian and give a reason why you only might be a close friend. They might be, you know, your family members, even if it’s a sibling him and spoke to in 10 years, they can come in and say, hey look, I’m related to him and I’m petitioning to Pete Guardian. And if nobody else, you know, uh, follows and makes the claim and even if it’s a friend, you know, there the courts tend to lead towards family, uh, over, um, people who are not family and that guardianships issues.
So you know, that right there I think is probably the number one reason why you at least want to do a will. So let’s talk about that. If you have, you’ve done a little bit of planning, you at least have a will in place. Then the, you still have to go through probate court. That’s a big misconception. People Think, Oh, I’ve done a will, that’s enough. I won’t go through court. No, all the wheel does is that guarantees that you will go through probate court. And I’m still the same, same different designations depend depending on the value that you have a but at least with the will you decide who gets to be. Um, the sometimes referred to as the executor here in Nevada we call that person a personal representative of your estate. And in the will you also designate who you want to be the guardians for your minor children.
So that’s probably the number one reason we want to do a will is to, to designate who that guardian is. And then you know, where you want your state to go. Now let’s get back to if you hadn’t done any planning. Who gets your money? Well, it depends on what type of state you’re in. So here in Nevada, we are a community property state and that’s versus a separate property state. And what the difference is is a community property state is essentially says that anything that you acquired after the date of marriage is presumed to be owned jointly by both of you who are in the marriage. So let’s say you bought a house after you’re married, even if it’s only titled in husband’s name, the wife has a 50% interest in that house. So if he dies, technically his estate only is 50% of that house.
And so that reduces the value in and makes the, makes it so we can qualify for those summary Administration or a set aside depending on the value of the house. Um, but you compare that with a separate property state, which says that everything, the way that it’s tiled is presumed to be your separate property. So if it doesn’t say mom and dad as joint tenants on the deed, it’s presumed be 50% mom’s house in her cause it’s in her name is and 50% in dad’s name. So his, his, his separate property. Now, why is that important? Because separate property is going to go to different people than community, property and community property when you die, says it all goes to the surviving spouse. Default setting. Okay. Versus separate property here in Nevada. Let’s say you had house that was dad’s before he got married as a second marriage and he owned the house beforehand.
It stayed in his separate name and he had kids from his first first marriage. Now, what’s gonna Happen with that? Well, if dad has a surviving spouse and only one kid, then the house is split 50% to surviving spouse. So to step mom and 50% to his kid, if he has more than one kid, it’s now one third goes to surviving spouse. Now remember, this is probably the house that she’s lived in for the last 10 years, but she now owns only a third of it with two or more of the kids who are not her own kids. They were dads from previous marriage. So you can see where all sorts of fights start to come out. And that’s what delays probate. That’s what jacks up the cost. Um, I mean, it’s a, a litigator’s dream, you know, because that’s, you know, as a probate attorney who litigates, you’d get way, way, way more money because it’s consistent work and it’s over a long period of time and it all comes out of the estate.
So, you know, we know there’s assets there to get paid on, but it’s not a fun thing to do. Okay. So now let’s talk about, let’s say you weren’t married a separate property. Where does that go? Um, or, or, let’s see. Yeah, you married but you didn’t have kids. Then it goes between spouse and parents if they’re living, if they’re not living, then we do siblings. And then we do, um, you know, nieces and nephews, if there’s none there, then we go to aunts and uncles and so on. Um, the other part that we have to worry about is if there’s, um, if there’s no surviving spouse, then it just goes to those people. But you can see where it starts to become an issue because there’s just so many people involved and uh, you know, so many moving parts and it’s really not necessarily the people that you wanted to have those assets.
So you just emphasize the point. Once again, this is why we emphasize a state planning. Now throughout the country, most people don’t talk about doing preventative estate planning. They’ll talk about doing wills, but they still get to do the probate on it. And the reason why is because, you know, those two attorneys grew up with, you know, probate is there, um, you know, their business growth plan, they meet with clients when they first get started. They do a will and then hopefully the kids come back. Um, you know, if they’re really sleazy attorney, they’ll even write in there that the probate has to be handled by the same attorney. And then the kids come back and then they get to do that probate as well. And then so they make 5% of that person’s total estate value versus doing a trust like we talked about last time, where it’s just a flat fee to set it up and they maintain the trust and it avoids probate altogether, you know, so a lot more cost effective for the client, but you can see where the conflict is for the attorney.
They want to get more work down the road. Um, so you got to find an attorney who’s really gonna be focused on helping you avoid probate versus actually, you know, making sure that you go through probate so they have more work down the Trust Attorney Las Vegas road. I think that’s enough for today. Um, if you have more questions about probate, please, um, you know, shoot me an email, give me a call and, um, you know, I’ll be happy to answer any questions you have. So once again, this is Blake Johnson with the trusted podcast. We talked about probate, every part of it that you can think of. Um, you know, why it’s so important to avoid probate court. Have a great day.