Estate Planning Archives - Page 13 of 13

Estate Planning

Clear Counsel Law Group / Estate Planning

When a person dies, his or her assets are going to need to be distributed one way or another, as well as debts paid. While a will is usually there to determine who receives what, sometimes a will is never created. If this is the case, the court will decide how assets are to be allocated.

Why to Avoid Probate

Probate can be slow – Probate is not usually a quick process, as it is handled through the court system. In simple cases, probate can be completed in as little as six months, however it can sometimes take up to a year to be settled. If an individual has a complicated estate or someone in the family contests the will, the probate process can be drawn out to two or more years. Because the probate process can be time consuming, it often creates tension within family members who are named in the will to receive inheritances or other assets.

Probate can be expensive – What many people do not realize is that probate is not free. The court takes a percentage of the estate’s worth to handle the costs of the probate process. In some cases, probate courts need to hire lawyers to protect minor children’s inherited assets. While each state charges differently for probate fees, it is generally expensive to go through the probate process at all; in fact, the probate fee can be as much as 10% of the estate.

Probate is public – Because the probate process goes through the court system, any information involving an estate becomes public record. If someone in the public chooses to, they can search these records to see what an estate consisted of. What this means is that whatever assets were left and distributed is public knowledge. So for instance, if you inherited gold coins from your grandma, people can find this out through public records. The availability of this information can make individuals targets for burglaries.

How to Avoid Probate

While most people instinctively create a will to name heirs, there are other methods of distributing valuable assets and property upon death. Instead of developing a will, a living trust can be established. A living trust allocates assets and property in a private manner that will entirely bypass the probate process. There are no probate fees or unwanted publicity regarding assets and property. When a living trust is created, a trustee is named and will be in charge of managing the assets of the trust. This trustee will notify the beneficiaries of their inherited assets and will allocate as necessary. And because a living trust does not need to go through probate, the process to distribute valuable assets will be much quicker than if a will was used.

Contact an Estate Attorney

If you would like to know more about living trusts, contact the estate attorneys at Clear Counsel Law Group. The attorneys at Clear Counsel understand that your family’s security is your number one priority, and would like to help you create a secure way to manage your assets and property. Call today to set up a consultation.

Revocable vs. Irrevocable Trusts

When it comes to living trusts, there are two basic options available; a revocable trust and an irrevocable trust. When it comes time to determine which type of trust is best, it is important to understand the fundamental differences between the two trusts and when one may be better than the other.

The revocable trust is the type of living trust that remains under the ownership of the grantor, or the person who takes out the trust. Revocable trusts can be changed and even cancelled at any time, which makes this type of trust seem like a great option. However, there are drawbacks to revocable trusts that are discussed below.

The irrevocable trust is where the grantor’s assets are moved out of his or her estate. This means that the assets in the irrevocable trust are no longer considered the property of the grantor. In some scenarios, the irrevocable trust may more sense than a revocable trust.

When an Irrevocable Trust is Better

Asset Protection – When a person has assets in a revocable trust, these assets are considered the trustmaker’s property. Because of this, these assets are vulnerable to creditors; assets in revocable trusts can also be taken should a lawsuit be brought against the grantor. However, when assets are in an irrevocable trust, these assets are no longer considered the property of the grantor, but instead are managed by an independent trustee. All of the decisions regarding the assets in the irrevocable trust will be in the hands of the independent trustee, and may or may not be extended to the grantor.

Estate taxes – Because assets in a revocable trust remain in the grantor’s estate, these assets may qualify for the federal estate tax depending on the value of the assets. However, assets in an irrevocable trust are no longer part of the grantor’s estate, disqualifying them from estate taxes.

Capital Gains Taxes – If handled correctly, assets that are transferred to an irrevocable trust will not be taxed as capital gains. In revocable trusts, these same assets would be taxed. However, be aware that gift taxes may be required when transferring money to an irrevocable trust.

Charity – If an individual decides to put assets into an irrevocable charitable trust, these assets can be written off as charitable deductions at tax time.

When a Revocable Trust is Better

Irrevocable trusts may be ideal when there is a large amount of assets that could be taxed. On the other hand, revocable trusts are typically best for individuals who do not have serious tax issues. Even more, revocable trusts are usually recommended for individuals who may at some point lose the mental capacity to handle their own assets. For instance, if an individual has a family history of dementia, it may be wise to transfer assets into a revocable trust. Once this individual is no longer able to manage the assets in the trust, the designated trustee will step up to handle the assets. If the original grantor chooses to do so, specific wishes and guidelines can be stated in the revocable trust for the successor trustee to follow. However, in most other cases, irrevocable trusts make the most financial sense.

Talk to an Estate Attorney

If you have questions regarding trusts or would like to discuss setting one up, contact Clear Counsel Law Group to schedule a consultation. The attorneys at Clear Counsel Law are experienced in estate planning and are there for you to help secure your family’s financial future.

Estate Planning - 11/14/2014

Every Parent Needs A Will.

Most people don’t want to think about their own demise. For parents with young children it can be emotionally draining to think about your kids growing up without you. However, it is important to plan who will take care of your children if you pass away unexpectedly, especially if you are a single parent. Even if you are married and your spouse is able to care for your children, you need a will in the event you both pass away at the same time and to ensure all your assets are passed on appropriately.

What Happens If I Die Without A Will?

If you die without a will the state will use the rules of intestacy to determine how your assets are divided. Also, if your spouse has also died or you are a single parent, the court will determine who will raise your children. These are very scary things to think about. That is why it is important to prepare a will that addresses these issues. Depending on the complexity of your estate you may also need other items such as a trust.

What Should I Put In My Will?

The first item that a will should address is who will care for your children. Your will should first state that your spouse shall have sole custody if you pass away and then name a guardian if both you and your spouse are dead or if you are a single parent. It is important to think carefully about who to name as the guardian of your children. The person you choose should be physically and emotionally able to handle raising your children and your children should have some form of connection to him or her. It is also wise to name an alternative guardian if the first choice is no longer available. It is best to talk to the people you are thinking of naming to ensure they are willing to accept the responsibility

The second item that your will should address is how to dispose of your assets. Your will should first state that all your assets shall be given to your spouse if he or she is living. In some states if you die without a will, your assets are split between your spouse and your children. Your spouse then has to involve the court to spend the children’s assets before they reach 18. Your will should then name a custodian of your assets if you and your spouse are both dead or if you are a single parent. The custodian does not have to be the same person as the guardian. Some people think it is easier to have the guardian also be the custodian so he or she can use your assets to pay for your children’s expenses. However, others prefer to have a separate custodian especially if the guardian is not good with money. The drawback to this arrangement is that the guardian will have to seek the approval of the custodian to use the funds, which can be a hassle. Your will should also designate at what age you wish your children to have control of their inheritance. The default rule is 18 but most teenagers are not mature enough to handle a sizeable inheritance. A better rule of thumb is 25 but every situation is different.

Please contact us at 702-522-0696 to discuss your estate planning needs, especially if you have young children. We can help you prepare simple documents that will give you peace of mind about your family’s future if you pass away.

Estate Planning / Probate - 08/29/2014

Delaware's Digital Death Law Blazes Trails for Consumer Rights.

Delaware has enacted a law on digital death that is the first of its kind in the nation. The statue provides a deceased person’s (or incapacitated) executor (or guardian) access to his or her digital accounts and to be an authorized user of the accounts.

This is a huge deal since big corporations, including amazon and apple, have previously insisted that at your death your digital "self" including your library of digital media, can not be passed along to your inheritors. While this law does not specifically allow for passing on digital goods to inheritors beyond anything stated in the EULA, it begins clearing the way for laws around the inheritance of digital assets.

The law reads as follows:

Except as otherwise provided by a governing instrument or court order, a fiduciary may exercise control over any and all rights in digital assets and digital accounts of an account holder, to the extent permitted under applicable state or federal law or regulations or any end user license agreement. A fiduciary with authority over digital assets or digital accounts of an account holder under this chapter shall have the same access as the account holder, and is deemed to (i) have the lawful consent of the account holder and (ii) be an authorized user under all applicable state and federal law and regulations and any end user license agreement. (emphasis added)

Thus, the executor or guardian would have access to the person’s email, music, photos, and other digital content. In passing the law, the Delaware legislature noted that people’s lives are increasingly conducted on-line and that their assets are increasingly stored in the “cloud”. Under current probate and estate laws, it is difficult for executors to gain access to a deceased person’s digital assets. Specifically, the legislature stated:

Recognizing that an increasing percentage of people's lives are being conducted online and that this has posed challenges after a person dies or becomes incapacitated, this Act specifically authorizes fiduciaries to access and control the digital assets and digital accounts of an incapacitated person, principal under a personal power of attorney, decedents or settlors, and beneficiaries of trusts.

However, the law is not as sweeping as it appears. The statute specifically states that it is subject to federal and state laws as well as end-user license agreements. Both Apple and Google end-user licenses do not appear to allow this type of activity. Moreover, both end-user licenses state that they are governed by the State of California not Delaware. Therefore, it may be difficult for an executor in Delaware to obtain access to a deceased person’s Gmail or iTunes accounts. Google actually has a “digital afterlife” service whereby a person can set up how his or her accounts will be handled after his or her death. Consequently, Google may ask the courts to defer to its established services and not recognize the Delaware statute. Moreover, some advocates are opposed to the Delaware law because they believe it violates the privacy rights of the people who communicated with the dead person. For example, the executor may read emails to and from the deceased person that contain information subject to professional rules of confidentiality or are simply very private matters.

Although novel, the Delaware law does not currently have a lot of “teeth”. Its effectiveness will likely be tested in court, at which point it will be clearer as to what powers an executor has access a deceased person’s digital assets.

Estate Planning / Probate - 08/28/2014

Estate Planning and Probate for Timeshares

Timeshares can be a headache for estate planning and probate attorneys as well as their clients! If not treated appropriately they can cause excess time and fees for everyone involved.

Many timeshares are real estate interests which means that they are deeded. Other timeshares are a contractual “right to use”. If a person dies with a timeshare interest in his or her name, there may have to be an additional probate in the state where the timeshare is located. This is called an ancillary probate and can cost up to several thousand dollars in attorney fees and court costs.

Nevada Probate and Timeshares

In Nevada, if the timeshare is a deeded interest there must be a probate in Nevada because the interest is real property. However, if the value of the timeshare (or the entire estate in Nevada) is less than $100,000, a special petition to the court by the beneficiary may allow the estate to be “set aside” and distribution made without further court proceedings. If the timeshare is a contractual “right to use” and the value of the timeshare is less than $20,000, the beneficiary can use an Affidavit of Entitlement without any court proceedings to transfer the timeshare to his or her name. However, the rules are different in each jurisdiction. Therefore, you should consult an attorney in the city where the timeshare is located to ensure the probate is done correctly.

Avoiding Probate

The easiest way to avoid this problem is to set up a revocable living trust for your assets. An estate planning attorney can assist you in creating the trust. Once the trust is created, you will transfer the timeshare interest into the trust and the trust becomes the legal owner of the timeshare. As the living beneficiary of the trust, you can use the timeshare while you are alive. Upon death, the trust continues to be the owner and probate is not required. The timeshare interest will then be transferred to the death beneficiary according to the terms of the trust.

Maintenance Fees for Timeshares After Death

It is important to keep in mind that all timeshares come with a maintenance fee obligation whereby the owner is required to pay annual fees to maintain the timeshare. If a person dies without a trust, the obligation to pay the maintenance fees transfers to the estate and then to the person who inherits the timeshare. With a living trust, the obligation to pay the fees stays with the trust but then transfers to the death beneficiary. Oftentimes the person who inherits the timeshare doesn’t want the property. A beneficiary can refuse the inheritance. The timeshare will remain the property of the estate or the trust and the timeshare company will foreclose if the maintenance fees are not paid. If the beneficiary has taken title but doesn’t want the property, the best solution is for the new owner to contact the timeshare company and try to give the property back to the timeshare company. The new owner will not receive any funds but he or she will be relieved of the maintenance fee obligation. If the property is in a valuable location, the new owner may be able to sell it for a small value on a resale website or rent the unit to cover the costs of the maintenance fees. Beware of any companies that offer to assist in selling timeshare interests for an upfront fee. They are almost always scams.

If you own a timeshare, it is important to contact an estate planning attorney and put the timeshare in a living trust so you do not inadvertently burden your loved ones. If you have inherited a timeshare, it is important to contact an attorney in the jurisdiction where the timeshare is located to determine your options.

Estate Planning / Probate - 07/25/2014

New Years Resolution? How about a Will or Trust?

A new year! It's that time of year when people start thinking about how to improve the next 365 days. Weight loss goals are not uncommon resolutions, though we often fail to last more than a few weeks. Other common resolutions include travel, paying off debts, or spending more time with family. Here's an option you may not have considered, though:

How about a will or a trust?

A will or a trust can be a long-time positive for your family, and, unlike exercise, it doesn't need to be difficult. Wills and trusts direct how your assets are to be distributed after death. This is an important task to take care of, because if you do not leave instructions the courts will decide what happens to your estate.

What percent of people in the USA have a will? 54%
Percentage of people age 65+ who have a will: Only 36%
What percent of women in the USA have wills? 34%

NOLO Survey

Even though this is an important part of good financial management, a recent survey by legal web site, NOLO, found that only 54% of people have bothered to even make a will. The main reason why they haven't? Just too busy.

We encourage you to re-think this important step in your estate planning. A will or trust can help your family a lot. For example, a will can:

Assign who gets what, helping head off disputes and bad feelings.
Puts somebody you trust in charge as executor.
Names a guardian for any children under 18.

These are important things to do, and can make a lifetime of difference to a family in case of an unexpected death.

Making a will is easier than you think.

Creating a will is one of the most simple legal matters you can do. In fact, it's so easy that, if your estate is fairly simple and your wishes straightforward, you can make your own will.

If you write your will in your own handwriting and include a date and signature, it's called a "holographic will." In the state of Nevada, such a will is legal and binding. If you can't do it in your own handwriting, (for example, if you wanted to have your will typewritten, as most people do) you must have two witnesses also sign the document. (Note: those two witnesses must be "disinterested," meaning they can have no benefit or inheritance coming from the will.)

For very simple situations such as wishing to give all the assets to a single family member, a do-it-yourself will might be a great fit.

Getting a trust is easy and important.

For more complicated situations, it's important to get a trust made. For example, if you have a beneficiary but you want to only give the assets over time, or hold the assets for a certain purpose such as education, it's essential that you set up a trust.

A trust gives you much greater control over what happens to your estate. It can deal with much more complicated legal challenges, and can help avoid inheritance taxes. However, setting up a trust will almost certainly involve sitting down with an estate planning lawyer. You don't want to leave something so important to chance.

An estate planning lawyer can help you analyze your needs and goals, and figure out what kind of trust is going to be the very best fit for your situation. Once the trust is set up, it doesn't take much to keep it updated as circumstances change in the future. The time it takes to meet with a lawyer will pay off in the long run in the time it saves and the confusion it prevents.

Go ahead and start that new exercise program. It's important to take care of your future health. But take care of the future of your estate, too.

Estate Planning - 01/06/2014

What we offer

Contact Info

1671 W Horizon Ridge Pkwy Suite 200,
Henderson, NV 89012

+1 702 522 0696
info@clearcounsel.com

Daily: 9:00 am - 5:00 pm
Saturday & Sunday: By Appointment Only

Nothing on this site is legal advice.