Estate Plan Overview
Nevada Estate Planning:
In Nevada, an estate is the total property, real and personal, owned by an individual prior to distribution through a trust or will. Real property is real estate and personal property includes everything else, for example cars, household items, and bank accounts. Estate planning distributes the real and personal property to an individual’s heirs.
Estate planning is the process by which an individual or family arranges the transfer of assets before death. An estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries with the added flexibility and privacy for the individual prior to death. If you are considering a Living Trust, or if you already have a traditional Will, it is because you own property or have other assets which are titled in your name or with another owner.
Owning assets in your name while you are alive is not a problem; but what happens if you die?
Obviously you cannot go down to the bank to sign and close out the account. The bank will not release your money to somebody who comes into the bank on your “estate’s” behalf?
The bank has to protect themselves from a legal standpoint. You are the legal owner of the asset, therefore you are the only person who can close out or dispose of that asset that is short of a court order from the Probate Court, directing the bank to release the proceeds to your estate. That is why everyone who dies with assets outside of a Trust, will in some way, shape or form, go through probate.
WHAT IS A LIVING TRUST?
Revocable Living Trust, technically called revocable inter vivos (“inter vivos” is Latin for “between the living”), are an increasingly popular way to avoid probate. Specifically, a trust is a set of written instruction whereby a person or married couple is able to transfer property to their heirs upon their death without having to involve the time, hassle and most importantly the expense of probate court.
They are your assets: You decide what happens to them!
SPECIFIC ADVANTAGES OF A LIVING TRUST
The revocable living trust offers several important advantages over a traditional will. To summarize the specific advantages of a living trust are:
1. Cuts cost. Probate costs can be exorbitant. The money to pay for the process typically comes out of the estate that left behind for the heirs. Save that money and pass it along to someone you care about. Even you have property outside of your living trust (which will be subject to probate), you will save money because much of the work required by the executor of the will was already accomplished when the trust was establish.
2. Save Time. An average probate proceeding, just like most judicial proceedings, typically lasts anywhere from a minimum of nine moths up to several years. With a living trust, the property can pass to your named beneficiaries in a matter of weeks.
3. Assures privacy. Probate proceedings are public. Anyone can gain access to your most personal information. Living trusts are completely private. No can find out what you own, or who you are leaving it to, thus eliminating the potential for “scam artists” to prey on recently widowed individuals.
4. Avoid multi-state problems. If you die with property in more than one state, separate probate proceedings must be conducted in each state, which adds to the cost and delays of probate. With a living trust, all assets from each separate state are placed into one trust, thus avoiding the need for multiple probates.
5. Discourages legal challenges. As a general rule, trusts are much harder to contest than wills because of the difference in time. With a trust, the assets are usually disposed of within a matter of weeks or months. By the time an individual decides they wish to challenge a trust, most of the trust property has been passed on to the beneficiaries. In order to challenge a trust at that point, the individual must retain and file a Superior Court action, naming every trustee and every beneficiary to the estate as a separate defendant. Obviously, this is a costly and time consuming process that would discourage most individuals from challenging a trust without a legitimate complaint.
6. Protects during disability. A most important but frequently overlooked reason for setting up a living trust is to ensure that someone will be available to handle your financial and legal affairs if serious illness renders you incapable of managing affairs for yourself. If, for example, you became suddenly disabled, your financial affairs would be in limbo. No one could operate your business, buy or sell property or even withdraw funds from your bank. If you have a trust, your successor trustee (or your attorney-in-fact named in a Financial Power of Attorney) may assist you with your assets until you regain your health.
These are just a few of the many benefits of a Living Trust. If you would like further information, please contact our office for a consultation.