Nevada residents with an interest in the estate planning process may wish to know more information about what happens to a person's debts when they pass away. Depending on the type of debt and who is involved, the answer may be complicated.
If there are no known heirs to an estate, or if there is no executor to an estate, a public administrator may be called in to protect it. In some cases, a public administrator might be named in a will to be the executor of an estate, or a judge might appoint one to be the executor. The latter scenario generally occurs if a named executor fails to act and part of or all of an estate may be at risk.
While parents likely have good intentions in mind when setting up a willing and leaving inheritances, common estate planning mistakes can make a process that is already difficult for some to talk about more complicated. Those in Nevada who have started considering their estate plan may be able to avoid complications by considering a few possible issues.
Digital assets are one of the most overlooked when Nevada residents think about estate planning. Many people may not realize how much money they actually have invested in their iTunes, Amazon or other online accounts. Without proper planning, these assets can be lost upon the account owner's death.
Under Nevada law, if a person dies with a will and assets, including real property or having a value of more than $20,000, his or her estate must be submitted to probate. Probate is the court-supervised process whereby a person's will is validated or challenged and the assets of his or her estate are distributed to beneficiaries. If the person dies intestate, without a will, then the estate will generally be settled by a similar process called administration.
Nevada residents who are making plans for the distribution of their estates should keep in mind that the process might have a number of pitfalls. Errors made while making an estate plan can result in the wrong people receiving assets or in assets being tied up in litigation for years.
If a Nevada resident dies with an outstanding credit card balance, what happens to that obligation? The answer to that question depends on the circumstances surrounding the balance and if that person was the only one who was obligated to repay that debt. In most cases, the estate of the deceased person is required to pay that debt if there are sufficient assets to do so.
Wills, probate, power of attorney, medical directives, trusts and the list goes on and on. The words are familiar; however, the exact definitions may not be. Many throughout Nevada do not recognize the importance of each of these items as individual pieces and then as part of an overall estate plan. In fact, quite a few individuals mistakenly believe that these estate planning items only apply to wealthy individuals and families.