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Las Vegas Estate Planning Law Blog

What happens in the probate process

Some people might wonder what is involved in the probate process. A person must file a petition for probate. If there is a will, a Nevada court will decide whether it is valid. In some cases, family members might challenge the will. The court would then hear evidence to decide how to proceed.

Generally, a will names an executor who is responsible for handling the estate. If there is no estate plan, the court appoints a personal representative and assets are distributed according to state intestacy law.

Tips for talking about inheritances

Taking time to talk with family members about estate planning can be worthwhile for Nevada residents. Having this conversation can make it easier to plan for a range of issues such as where money will come from to pay for a parent's long-term care. It can also make it possible for family members to create a plan to transfer wealth while minimizing inheritance and other taxes.

Depending on a given family's dynamics, talking about how assets will be transferred can cause confusion or conflict. In some cases, adult children don't feel comfortable bringing up estate planning topics because they feel that they would be out of line. According to an Ameriprise study, only 21 percent of participants said that they told their children how much they were going to receive. To make the conversation less awkward, it may be best to focus on practical matters at first.

Why estate planning matters for adults of all ages

Nevada ressidents may be able to learn a lesson about the importance of estate planning for adults of all ages from the Swedish musician Avicii. Avicii died in 2018 at the age of 28 without leaving any kind of estate plan behind. According to Swedish law, his parents will inherit his entire estate although this may not be what he would have wanted.

This is suggested by his extensive donations to charity while he was alive. In 2012, he donated all of his proceeds from a tour to combat hunger plus $1 million of his own money. He also donated €1 million to a Swedish charity that combats hunger. He stated in interviews that he wanted to use his wealth to help people in need.

Key differences between wills and trusts

For anyone considering estate planning in Nevada, two of the main options are wills and trusts. While there are some individuals who believe it's better to opt for a trust than a will, the fact is that either one of these estate planning methods can work well. A will is a document that typically includes instructions about property and asset division among designated heirs. One can also use a will to name a personal representative to handle an individual's final affairs. Preferred guardians for children can be named as well.

While a will can be a useful document, it doesn't have any power until its creator passes away. At that time, it's presented to the court so the probate process can begin. A trust, on the other hand, is considered a separate and distinct legal entity that can be used to pass along certain assets to designated beneficiaries. There are many different kinds of trusts that can be set up. A revocable living trust, for example, allows the creator (settlor) to also serve as the beneficiary and trustee.

Creating an estate plan when your child is an addict

As challenging as it may be for anyone to consider and establish an estate plan, you have an added complication if your son or daughter is addicted to drugs or alcohol. Your plans to leave your children your estate, life insurance benefits or other assets is frustrated by the potential disaster that may follow if your addicted child receives an inheritance. Even for those in recovery, such a windfall may be the equivalent of a death sentence.

There are options, but it may be difficult to know which one is the best for the wellbeing of your family. Leaving an inheritance that is fair to all of your children may seem nearly impossible when one child's situation requires a delicate balance of prudence and generosity.

Using trusts as part of an estate plan

Many estate planners in Nevada want to take advantage of the higher level of flexibility and autonomy offered by trusts. However, they may have questions about how trust instruments work, especially where they differ from wills. For example, some may wonder if they can create a second trust and if it will affect the first trust they created. On the other hand, a new will usually explicitly revokes prior wills; it's only possible to have one valid will at a time.

However, trusts are different. While a will is meant to dispose of all of a person's remaining property, trusts must be funded with specific assets. Two trusts cannot control the same assets at the same time, in general. However, in some cases, an estate owner may want to create separate trusts for different types of property and serving different purposes. If one wants to change the way they are distributing property in a trust, they could revoke the original trust. However, they could also simply amend the trust while keeping it intact. The creator of a trust can even perform a restatement or complete amendment of the trust to entirely change the way that property will be handled.

How life insurance fits in an estate plan

Over the next several decades, roughly $30 trillion in wealth will be transferred from grandparents and parents to their children and grandchildren. Therefore, it's important for Nevada residents to plan how the assets will be transferred. This may be made easier through the use of a life insurance policy. These policies can provide cash that might be needed immediately following a person's death.

The money could be used to pay for anything from final expenses to estate taxes. In some cases, an individual's estate may have to pay taxes on the federal and state level. If the estate needs to go through probate, there will be a wide range of fees that will likely need to be paid. With a life insurance policy, cash is provided quickly after a person passes. That is important because taxes and other costs may need to be paid within months of an individual's death.

Changes an estate plan may need after divorce

Major life events should trigger a review of the estate plan for people in Nevada, and divorce is one of those events. The first step is to review the will. The executor, which is often the spouse, may need to be changed along with other elements of the will that include the ex-spouse's family.

People may also want to review and change beneficiary designations. These are sometimes forgotten even when other elements of the estate plan have been changed. Failing to change them can result in an ex-spouse getting retirement benefits, payment from a life insurance policy or other unintended assets.

The link between the National Firearms Act and estate planning

Are you one of the many Las Vegas residents who own firearms? If so, then you may already be aware of the National Firearms Act. You can pass on your weapons collection to loved ones after your death through proper estate planning. The prevailing advice is to create a gun trust in order to protect your rights and the rights of your heirs and beneficiaries in relation to your weapons.

However, if you have yet to take advantage of the legal protections provided by a gun trust, you can still use other estate-planning tools to make the transfers after you pass away.

When a will is not enough

Nevada residents who are wondering if a will is enough for an estate plan should consider several points. If someone simply wishes to transfer his or her assets to loved ones and does not care about efficiency, then a will may be all that is needed. However, when an estate owner wants to get their assets to their beneficiaries as efficiently as possible, or if they want to add in details that are unrelated to testamentary intent, they likely need to go beyond a will.

While a will is generally considered the foundation of every estate plan, they rarely stand alone. For example, a payable on death (POD) asset will require additional steps to make sure it is efficiently transferred to the beneficiary. This is also the case when an asset is a transfer on death (TOD) asset, such as a bank or investment account. These designations are considered supplemental to a will and in many ways are just as important as the will itself.