3275 South Jones Blvd., Suite 105
Las Vegas, NV 89146
WILL, TRUST , OR INTESTATE ?
Many times I get asked the following question, “I want to protect my assets but I do not know if I should have a Trust or a Will or is it even necessary to have either”. While I personally do not draft the Wills or Trusts in this office, that task is left to Dimitri Dalacas, Esq., and John McMillan, Esq., I am responsible for handling the Probate cases. To that end, I always answer the foregoing question with based on the information I receive from the following questions:
(1) Are you married?
(2) Do you have children?
(3) Do you have property that you acquired prior to the time that you were married or that you acquired as a result of inheritance that you have not transferred into your spouse’s name?; and
(4) How large is your Estate?
The answers to the first three questions are pretty straightforward, however, the last question can be a little more difficult to answer. This is because in order to figure out the gross value of your Estate you have to deduct assets that are not part of the Estate as well as valid encumbrances against the Estate. Moreover, before you tell me you have a million dollar Estate and we make the decision that a Trust should be drafted, it is important to look at how the assets are held. In other words, let’s assume for a moment that you have a bank account, a life insurance policy a retirement fund (IRA/401K) and a house. The house has a value of $500,000.00 but is held as joint tenants with right of survivorship; the retirement account is worth $250,000.00 but you have designated that in the event of your death the money all goes to a named individual (commonly referred to as a POD account); your bank account has 200,000.00 in it but that is also held as joint tenants with rights of survivorship and you have a life insurance policy that is worth $100,000.00 but you failed to designate a beneficiary. In that case, because you have either designated a POD beneficiary or everything is held as joint tenants with right of survivorship, the only asset that would be a part of your Estate would be the life insurance policy of $100,000.00. As such, it might not be necessary to draft a Trust.
There are three different types of Probate actions in the State of Nevada; (i) Set Aside Estate; (ii) Summary Administration and (iii) Full Probate. Each has their monetary thresholds and different requirements. The following is just a brief summary of their differences and what is involved in each instance.
Under a Set Aside Estate, all of the assets are Set Aside to the wife or minor children for their benefit. What this means is that there can be minor children, or there can be a surviving spouse or there can be a surviving spouse with minor children and in all three of those instances no creditor’s will be able to come after the assets of the Estate. In the instance where there is a surviving spouse, with or without children, the necessity of a Will or Trust might not be as important. However, if children are involved and you are either a single parent or in the event of an untimely death of both parents, executing a Will to designate whom you want to take care of your minor children with a Trust to handle the assets is extremely important.
Additionally, if there is not a minor child or spouse then the property would pass by intestate succession and would potentially be subject to creditor’s claims unless there is a Will that provides where the assets are to go. In that instance it passes by Will to whatever individual or individuals you designate by Will and again creditor’s will be frustrated.
Although it might not be as necessary to undertake Estate Planning where there are no children involved and you are sure that there will be a surviving spouse…this presumes the question that there will not be an untimely death of both of you. As such, even a simple Will that designates where you want your assets to go and whom you want appointed to administer your Estate is recommended.
The other two types of Probate actions Summary Administration and Full Probate differ only in two respects. The first is that Summary Administration is for Estates the value of which is between 100,000.01 – and 200,000.00 while a full Probate covers Estates where the gross value is greater than $200,000.00. The other aspect is that the amount of time that creditor’s have to file the claims against the Estate is shorter in Summary Administration (60 days) than it is in a full Probate (90 days). During this time, absent an Order from the Court, none of the assets from the Estate can be utilized. Moreover, even assuming that you have a Will, the Will may be challenged, which can lead to further delay in closing the Estate. A Trust minimizes the ability for challenges because the typical challenges are much more difficult to prove in light of the nature of the actual Trust documents themselves.
Because of the cost involved for any type of Probate case and the ability of your Estate to be subject to creditors claims or challenges from family members in all cases but the foregoing mentioned Set Aside (where there will be a surviving spouse either with or without children), it is highly recommended that some sort of Estate planning be undertaken to protect your Estate and the ones you leave behind. At the very least, you should meet with one of the capable attorneys at our firm to help you answer the above questions and figure out the best way to structure your Estate.
For more information contact us at firstname.lastname@example.org.
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