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Las Vegas Estate Planning Law Blog

What happens when a person dies with debt

Not all Nevada residents leave extra money behind when they die. Many people have outstanding debts, and settling them could deplete a decedent's entire estate. After a person dies, the executor or court-appointed administrator will be responsible for verifying all of the decedent's debts and paying the debts off with money in the estate.

It is important that an executor does not pay debts that the decedent did not owe. The first step to settling a deceased person's debts is to gather information about all of the decedent's open credit card accounts and to request credit reports from all of the credit bureaus. TransUnion, Equifax and Experian will each ask the executor for a certified death certificate, and supplying that document to the credit bureaus will prevent fraudulent accounts from being opened.

Rights to willed assets

Estate planning tools can be used by Nevada residents to specify exactly what should happen with their assets after they die. However, there can be a question about what an individual should do regarding assets that he or she was bequeathed in a will but that were legally given away before the testator died.

It is important that individuals know exactly what a will is and how it can be used. It is a written set of instructions that becomes a legally enforceable document once the testator dies. Any number of changes can be made to the will by the testator before that happens. Because of this, the will represents only an expectation of an inheritance, not a right. If an individual has been advised a will leaves him or her assets, it will not be certain until after the testator dies. If the contents of the will state something else, the individual may not have much legal recourse.

How can a trust protect my family?

Estate planning is a useful tool for every individual who wishes to retain control over what happens to his or her estate in the future. While you may not be wealthy or own significantly valuable assets, what you have is worth protecting. Taking a few simple steps can ensure that your beneficiaries get what they need after you are gone.

A will is often the first and most basic step that Nevada families take in the estate planning process. However, you may need protections beyond the scope of a will. You may benefit from the flexibility and benefits of one of the many different types of trusts.

Most Americans have avoided estate planning

Nevada residents may find it discomforting to plan for what happens after they die. According to a survey done by Caring.com, only 46 percent of American adults have some sort of estate plan in place, and only 36 percent of American adults with children under the age of 18 having some sort of end-of-life plan. However, having such a plan can prevent both financial and emotional stress for children or other survivors.

Of those who responded to the survey saying that they didn't have estate documents, 47 percent said that they hadn't gotten around to it. To those who study the issue, this is partly because of fear and partly because of procrastination. While most people understand that they won't live forever, many believe that they will live into their 80s or 90s. Therefore, they assume that there is plenty of time to create a plan in the future.

Bobby Vee's family in estate dispute

Las Vegas residents who enjoyed Bobby Vee's music may be interested to learn that two of Vee's children alleged that their siblings mishandled estate funds. Vee, whose birth name was Robert Velline, died on Oct. 24, 2016, after suffering from Alzheimer's disease.

Two of Vee's children were responsible for putting on a play about their father's life. His other two children and his widow had not approved. When the two children and Vee's widow learned that the play would be moving forward in September 2014, the lawsuit claimed that Vee's widow became distressed. This caused her to put all of Vee's business assets and other belongings in a trust.

The uses of a revocable trust

Some people in Nevada who are creating an estate plan might want to use a revocable trust. Passing assets to beneficiaries using a revocable trust may be more private, less expensive and easier than using a will because a trust does not have to go through the public process of probate.

A revocable trust has several other uses as well. It can specify how and when assets are distributed to beneficiaries. It can also be useful in blended families to protect children from earlier relationships.

Gifting mistakes to avoid

Many Nevadans want to make gifts to their children during their lifetimes. Some want to help their children out while others want to help to avoid the possibility of estate taxes. It is important for people to understand some potential problems that can be caused if they do not handle the manner correctly.

Some people gift highly appreciated assets to their children such as stocks that have substantially increased in value since the purchase date. When they do, the children will have to pay capital gains tax on the increase at a future sale. Parents should instead gift their children assets that are not highly appreciated and pass those that are after their deaths because the basis then steps up to the value at death.

What happens if a will is destroyed?

Nevada law governs what happens when the will of a deceased person has been lost or destroyed. Generally, per NRS section 136.230, if a will has been lost or destroyed without the knowledge of the testator, a Nevada court may take the will as valid on the same proofs as wills in other cases. The court will require that certain standards are met before the lost or destroyed will can be probated.

The petition for probate must include a copy of the will. If no copy is available, the petition must include a written statement of the testamentary words or their substance. The will must have been in existence when the testator passed away, or it must be proved that the will was destroyed fraudulently during the life of the testator; the will's provisions must be proved by two credible witnesses.

Let your estate plan evolve along with your life

If you have a will, you might have gone the whole nine yards and established estate plans that give you complete control of what will happen to your assets upon your death. However, your estate plan -- even if drafted with the guidance of a skilled estate planning attorney -- will be of little use if it did not keep up with the financial and personal changes that occurred over the years.

Over half of Prince's estate will go to taxes

Nevada fans of the musician Prince may be aware that he died without leaving a will. This will result in his estate being split equally between his six siblings under applicable intestacy law. It also means a hefty tax bill. The estate's estimated worth of $200 million is reduced to approximately $88 million after paying 40 percent in federal estate tax and 16 percent in Minnesota estate tax.

Presumably, splitting the estate equally between his siblings and paying over half its worth in tax was not Prince's intention. This outcome could have been prevented with an estate plan. Furthermore, there are a number of vehicles he could have taken advantage of to reduce how much his estate paid in taxes. These tools would have helped him to reduce his estate's value.