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Las Vegas Estate Planning Law Blog

The importance of powers of attorney

Nevada residents may understand how important an estate plan is. They may also be making common yet costly mistakes that could make it difficult to carry out their wishes. One of those mistakes is not reviewing plan documents on a regular basis. Generally speaking, those who have gone more than three years without a review should make time for one right away.

Ideally, a person will have more than just a will as part of their estate plan. Of course, those who don't have a will should create one as soon as possible. However, it may be necessary to create financial and health care powers of attorney. Failing to designate a person or entity to take care of assets or health care decisions may result in a court making that designation instead. Such documents should be created as soon as possible even if a person is in good health today.

Using multiple trusts

Nevada residents who have already established one trust may want to create a second one. Unlike with wills, which usually include provisions that stipulate that the most recent will revokes all earlier ones, the creation of a new trust does not cancel out prior ones.

There are situations in which the second trust serves as a restatement and total amendment of the initial trust. However, in these cases, the restatement is not a creation of a new trust.Individuals should carefully consider why they want to create two trusts. If there are assets that have to be distributed beyond the scope of the existing section, the creator of the trust can add a separate provision that specifies the additional distribution.

How the estate tax exemption may affect estate planning

People in Nevada might want to take another look at their estate planning after the passage of the tax bill at the end of 2017. This bill raises the estate tax exemption for individuals to more than $11 million and for couples to more than $22 million. This means that some people who have created an estate plan that uses strategies to avoid estate tax may no longer need those strategies. In particular, married couples might simply leave the entire estate to a spouse. However, in some cases, there may still be good reasons to continue using bypass trusts and other tools.

For example, in blended families, a person may not want to simply have all assets go to a spouse. A bypass trust can help ensure that the children of the first spouse to die still get a share of assets. Another consideration is protecting assets from creditors. Trusts may also be the right choice for multigenerational planning. A bypass trust might be used if there is a reason to keep assets and appreciation out of the estate of the second spouse to die.

How can an executor protect a deceased loved one's assets?

Acting as an estate executor is an immense responsibility. While a loved one may ask you to take on this role in hopes that you will feel honored and trusted, you could find yourself feeling overwhelmed and stressed when the time comes to carry out the necessary duties. When you accepted the position of executor, you may not have fully realized the extent of the role and the tasks you would need to address.

Your job as executor means that you hold the responsibility of seeing your loved one's remaining estate through the probate process. This legal proceeding can take a considerable amount of time to complete, though the exact timing depends on the specific circumstances of the estate. Soon after the person's passing, one of your first steps as executor may relate to protecting the individual's assets.

Estate planning can be critical for business futures

Business owners in Nevada may be aware of the importance of estate planning for their personal belongings and properties. However, estate planning can be just as important to protect the longevity and well-being of a business. When the principal of a business passes away, it can be too easy for an active concern to slide into inactivity.

Estate planning can help to ward off such concerns. An estate plan for the business can help to ensure a proper management transition after death. By preparing a new management team in advance, a business owner can be assured that their firm is in good hands. Another option for a business estate plan is a buy-sell agreement. When a business has several owners, this agreement allows the others to purchase the interest of the deceased party. It can prevent that portion of the business from automatically transferring to the general heirs of the deceased owner.

Dealing with debt as an estate executor

You may have felt honored and flattered when a loved one asked you to be the executor of his or her estate. Perhaps you had visions of being the person who delights the beneficiaries of the deceased by announcing what each would inherit. Since your loved one has passed away, you may have quickly realized that there is little of that glory in the duties of an estate executor.

Hopefully, your loved one left an estate that was well prepared, with updated documents, consistency in titles and well-funded trusts. Perhaps it was just a simple will encompassing a modest home and a savings account. All of that would be easy to handle as an estate executor except for the fact that your loved one also left behind debt.

Why to choose a trust

There are multiple factors Nevada residents should consider when trying to determine if they need a trust. Despite popular belief, trusts are not intended only for the wealthy, and individuals with any amount of assets may find that establishing a trust can be useful.

Individuals can use a revocable trust to ensure that their wishes are enacted should they become unable to make decisions on their own if they become incapacitated. The trust agreement can specify who should serve as the successor trustee. The successor has the authority to administer the provision of the trust, which should be well-drafted so that the needs of a grantor can be taken care of.

Many people lack basic estate planning documents

All Nevada residents, even those who fall in the middle and lower income brackets, can benefit from having an estate plan. However, a recent survey found that over half of those living in the United States don't have basic plan documents. These documents may include a living will and health care proxy. A living will stipulates what type of medical treatment should be given or generally communicate a person's wishes if he or she becomes incapacitated.

A health care proxy is someone who can access medical records or help to make medical decisions on a person's behalf. The use of a will or trust can help communicate how assets should be transferred and why those decisions were made. A trust is helpful for parents who want their children to receive assets in a structured manner. Instructions in the trust will be carried out by a trustee who could be a family friend or other trusted party.

Problems that arise in estate planning with blended families

Disputes over estate plans may be more likely to happen among blended families in Nevada than in families in which there are not stepchild and stepparent relationships. These disputes may be more common in families with stepmothers, in part because women are more likely to outlive men. One survey found that only about one in five adult children reported feeling close to their stepmothers. There are several common reasons that a dispute over an estate involving a stepmother might happen.

Short marriages are one situation in which children and a stepparent may end up in a dispute. This becomes particularly likely if there appear to have been changes to documents in the final days of the parent's life, especially if dementia was involved. Children might feel that the stepparent exerted undue influence in getting estate planning documents changed. Stepchildren may also become resentful if they find a stepmother favored her biological children over them. This may only be apparent in records uncovered after a parent's death that show a pattern of the stepmother helping her biological children financially but not stepchildren.

Overview of a trust

Nevada residents who are concerned about their privacy or want to minimize taxes may want to place assets into a trust. A trust can be controlled either by the person who creates it or on behalf of that person through a trustee. Trusts are generally considered to be revocable or irrevocable. As the names imply, revocable trusts may be altered while irrevocable trusts generally cannot.

One of the benefits of a trust is that assets are generally protected from creditors and from being lost in the event of a divorce. It may also be possible to name secondary beneficiaries in the event that the primary one passes away. As a general rule, the transfer of assets through a trust tends to be faster and done without being made part of the public record. Assets that are held in a trust generally don't need to go through probate after a person dies.