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Las Vegas Estate Planning Law Blog

Issues that can upend estate planning

After a Nevada resident puts together an estate plan, there is a good chance that it won't last forever. This is because there are many different variables that could change, which could render an estate plan meaningless in its current form. For instance, if a person gets divorced, it can have an impact on who receives assets. In some cases, a new spouse could be entitled to a certain percentage of a person's assets regardless of what a will says.

Even if a person lives a perfect life free from stress or drama, a beneficiary may not be so lucky. If a family member who is also the beneficiary of a bank account gets divorced, there is a possibility that the asset could be shared with that former spouse. Therefore, it is important to review beneficiary designations to ensure that they are still the people who should receive assets.

Mistakes with beneficiaries could cause issues

Estate planning has many beneficial applications. You can address many areas of your life and ensure that your loved ones know how you would like to be laid to rest, how to divide your assets and how to handle other important tasks associated with your passing and closing your estate.

On the other hand, just because an estate plan has the potential to benefit surviving loved ones, it does not mean that you have created an effective plan. In fact, if mistakes with your plans exist, you may cause more complications for your family. In particular, you may want to remain aware of errors associated with naming your beneficiaries that could cause issues.

How to create an estate plan for digital assets

Some people in Nevada who are creating an estate plan might primarily think about their assets as things like bank and investment accounts and real estate. They might not consider the large role that digital assets play in their lives. Digital assets may include various accounts as well as information stored on flash drives and mobile devices.

The first step in organizing digital assets as part of an estate plan is to make a list of all of them. This should include any domains owned, cryptocurrency accounts and external storage devices as well as access information such as passwords, encryption keys and access codes. The person should then list who will have permission to access various accounts and what should be done with them.

What a personal representative is responsible for

Nevada residents who are named as the personal representative of an estate have an important duty to carry out. Their responsibilities include collecting assets, paying bills and filing income and estate tax returns if necessary. They are also tasked with distributing money or other assets that remain in the estate to beneficiaries. Personal representatives could be liable if reckless or egregious actions are taken.

However, judges realize that most who fill the role are not perfect and can be expected to make honest mistakes. To add further protection, it may be possible to ask to serve under a supervised administration. This means that court approval will be needed before any significant steps can be taken in the estate administration process. Personal representatives can also hire legal counsel to assist them in making decisions about a deceased person's estate.

Understanding the probate process

When people in Nevada plan to create wills, trusts and other key estate documents, they are often most concerned with protecting their assets and ensuring that their family is cared for after their death. While the issue of probate comes up frequently when considering estate planning, many people do not know what exactly happens during the probate process. Understanding probate can help people make decisions about their estates and plan for the future distribution of their assets.

The probate process is supervised by the court and involves the authentication of a will, the valuation of the assets of the decedents, the payment of necessary taxes and the distribution of the estate as determined by the court. Probate is governed by state law, and each state has regulations to determine what is necessary to go through probate.

Are probate and estate administration the same?

Many areas of law leave most people confused. After all, legal matters remain so complex that many individuals devote their careers to learning specific areas of law in order to help others when the need arises. Even when individuals think they know a certain amount regarding a legal topic, they may come to discover they did not know as much as they thought.

When it comes time to close a deceased individual's estate, you may immediately think that the estate will need to go through probate proceedings. While you may have also heard of estate administration, you may have believed that the two terms referred to the same process. However, differences do exist between probate and administration as well as between executors and administrators.

How to choose people for roles in an estate plan

One important decision that must be made by people in Nevada who are creating an estate plan is whom to choose for various tasks associated with the estate. These people can be family members or close friends, but they should have the necessary aptitude for the jobs.

For example, the executor, the person who has financial power of attorney and trustees of a trust should all be people who are well-organized and responsible with money. On the other hand, people who have health care power of attorney need empathy. It may help if this person is familiar with the health care system, but it is not necessary. Someone who has already been a caregiver could be a good choice. These types of skills would also be significant in choosing someone as a guardian for minor children.

How to amend a trust

Nevada residents who want to make changes to a trust might wonder whether they should amend it or write an entirely new one. The first step is to make sure that it is possible to amend the trust. Most living trusts can be amended or revoked.

Most amendments are not complex documents. They simply explain the changes needed while acknowledging that it is possible to amend the trust and that the other parts of the trust remain the same. However, people should keep in mind that if a trust has multiple amendments, it can become confusing.

How an estate pays off its debts

Nevada residents who were in a marriage or civil partnership with someone who has recently diedare not necessarily liable for their debts. Whether a person is liable for a given debt depends on whether or not his or her name was on the loan. Furthermore, a person may be liable for it if he or she guaranteed repayment in some fashion. Otherwise, outstanding debt balances would be paid from a decedent's estate.

Generally speaking, estate administration costs are paid first followed by funeral costs and the cost of treatment at a hospital. Then, federal income and estate taxes must be accounted for, and taxes could be paid ahead of hospital bills in certain situations. As assets may be used to pay these bills, an individual who was set to receive money or property from a spouse will generally receive whatever is left over after creditor claims.

Tax law changes could affect charitable giving

For Nevada residents who are concerned about the future of their estate and who want to include charitable giving as part of their plans for their assets, recent changes in federal estate and gift tax laws might alter the way that they include philanthropy as part of the process. Up until 2017, people could leave bequests of up to $5.49 million before their heirs would have to deal with federal estate or gift taxes.

As of 2018, after the passage of the new tax bill in late 2017, the exemption level has been doubled to $11.18 million per person. Of course, most people's estates are nowhere near the federal estate tax limits, as 99.6 percent of Americans were not subject to estate taxes even before the additional upward adjustment. State taxes on estate bequests can also be a concern, but 65 percent of people live in states without these taxes.