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Las Vegas Estate Planning Law Blog

Mistakes to avoid when creating an estate plan

While estate planning is important for all adults in Nevada, it is critical to do so properly. A common mistake that people make is to leave assets directly to minors. A better idea is to leave the asset to a trust that a minor child or grandchild is the beneficiary of. If a trust is created, it needs to be funded before its creator passes on. Otherwise, assets that were intended for the trust may still need to go though probate.

Individuals are also advised to not create a will without the assistance of an attorney or an estate planning professional. Although it may be less expensive to make a will online, DIY documents are often vague or otherwise hard to decipher. Therefore, the money saved creating the document is likely going to be spent on lawyers and other costs related to determining what it's trying to say after a person passes.

Anticipating family conflict and creating an estate plan

One of the biggest challenges for some people in Nevada who are creating an estate plan may be dealing with family dynamics. If not attended to, conflict can lead to litigation, and ultimately, a person's wishes may not be carried out. However, there are steps that can be taken that may prevent this.

It may help to talk to family members about the estate plan so that they have a better understanding of the reasoning behind it. Some people write a "letter of intent" to be read after their death. People should try to avoid setting up an estate plan that will exacerbate tensions. For example, instead of making one adult child the trustee of a trust shared by siblings, a corporate trustee may be a better idea. These precautions can be even more important in a blended family.

Tips for avoiding common estate planning mistakes

One common error people in Nevada might make regarding an estate plan is having one that family members cannot access. People may encrypt an estate plan on a computer or place it in a safe deposit box. An attorney may be able to help a person plan how to best store the estate plan that allows for both security and necessary access.

Another common error is overlooking beneficiary designations. Such assets as life insurance policies and retirement accounts are commonly passed using beneficiary designations instead of a will or a trust, and these should not be overlooked as part of the overall estate plan.

Estate plans cover a multitude of wishes

In Las Vegas, Nevada, the distribution of property is often part of a detailed estate plan. Although some people detest the thought of establishing estate plans, sound financial planning regarding estates can offer peace of mind. Some people avoid thinking about inheritance issues because of superstitious beliefs. These superstitious individuals believe that making their wills may cause bad luck or even death. The fact is that people eventually die regardless of whether they have wills or estate plans.

An estate plan ensures a person that his or her assets will go to designated individuals. The absence of an estate plan may cause relatives to argue. Some people think they do not need wills because they lack money or other significant assets. This is incorrect thinking. A person who has a humble savings account may still want to give it to someone special.

Does your estate plan include your pet?

You have likely seen the commercials that feature abandoned and abused dogs and cats left to survive and struggle on their own. These commercials often make pet owners pull their animals close and assure them such a thing will never happen to them because you love and care for them as members of the family.

However, if you have a special companion who trusts you to fill its basic needs, what will happen to that animal when you are no longer able to provide that care?

Power of attorney is an essential estate planning tool

When many people in Las Vegas think of estate planning, they often imagine a will or trust. They would be correct in considering these to be the foundations of a proper estate plan. However, estate planning attorneys may advise that other documents are just as necessary. One of the more important documents is the power of attorney.

A power of attorney is basically a document that allows another person to act as an agent or attorney in fact for them. The agent can be appointed for general actions or specified actions depending on the language of the document. It can take effect immediately or when the grantor becomes disabled.

Potential estate planning risks associated with online wills

Some people in Nevada are ardent do-it-yourselfers when it comes to everything from household tasks to taxes. But a DIY approach to preparing a will could contribute to some oversights or missteps that may be problematic for loved ones left behind. One potential problem is that some sites may omit important companion documents, such as a financial power of attorney and an advance healthcare directive, or only offer them with higher-priced packages.

Documents on online will sites are usually fill-in-the-blank. But if someone completing will-related documents online has a question, access to an attorney may be limited. Other times, a site may simply have a drop-down menu with responses to frequently asked questions in lieu of direct access to an estate planning lawyer. The main advantage of DIY wills is the cost, although people also appreciate the convenience of being able to take care of this task fairly quickly.

Potential pitfalls of naming family members as trustees

Estate plans sometimes use Nevada trusts to achieve goals like privacy or reduction of estate taxes. Heirs could also benefit from trusts because these entities shield assets from creditors and divorces. A trust by its nature must have a trustee to manage assets and distribute funds according to the terms laid out in the trust documents. The trustee can be a family member named by the benefactor, an attorney, or an institution like a trust company. Although people might feel inclined to select their spouses or children as trustees, an outside party could present the best choice.

A party from outside the family could possess the financial acumen to manage assets and fulfill accounting duties. Additionally, a professional trustee might not be vulnerable to internal family disputes. For example, naming a spouse as trustee might create resentment among other heirs, particularly stepchildren who suspect that they are not receiving a fair deal. Such complaints sometimes end up in costly legal battles.

Creating an estate plan in a blended family

People in Nevada who have remarried but have children from a previous marriage need to take steps to ensure that both their spouse and children are taken care of in the estate plan. A simple will is usually not sufficient in these situations. If a person leaves everything to the spouse, that spouse may leave nothing to the children.

This may happen because of malice, but it is not necessarily the reason. The stepparent and children may simply drift apart over the years. The spouse could remarry and the new spouse might inherit assets. One solution is to create a trust that can benefit the spouse and then pass to the children when the spouse dies. Parents may want to consider leaving something for the children in a last will and testament so they do not have to wait for a stepparent to die to inherit. A trustee should be chosen who is experienced and prepared to deal with family conflict.

Health care powers of attorney can aid decision-making

When Nevada residents think about estate planning, they may consider it a matter for dealing with wills or trusts. However, some of the most important documents can affect the way people are treated while they are alive but incapacitated. Many people have strong feelings about the kind of treatment they receive when they are in a situation where they are unable to make their own medical decisions. A health care power of attorney can ensure that a trusted person is responsible for making those decisions in such a situation.

Ever year, National Healthcare Decisions Day highlights the importance of decision-making about medical authority in case of incapacity. Many people know who they would want to make decisions about their care, including choices of life or death, but often have not formalized those preferences. A health care proxy or power of attorney can designate a specific person charged with acting on the document creator's behalf in case he or she is unable to do so. While some people may think this need only applies to older people or those who are in poor health, anyone could face a catastrophic incident.

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