How Does Legal Capacity Affect the Ability to Bequeath a Home?

 

 

What to Know about Legal Capacity in Order to Bequeath a Home

Transcript:

Jordan Flake:  I’m Jordan Flake. I’m an attorney with Clear Counsel Law Group. I have a question here. My sister has agreed to care for my mother and her home. Is there a legal way of ensuring that the home will be given to her after mother passes so that she’ll not have to sell it before then? I think the idea here is they want to be able to keep the mother in the home during the course of the mother’s life.

Whenever a client comes to us and says, “I’m caring for my mother, or I’m caring for my father and we want to do this.” The very first thing that pops into our head is the highly relevant question of does your mother still have her capacity. What I mean by capacity is the ability to make decisions by herself and for her own benefit. When we talk about capacity, we’re not necessarily at her prime, can she solve all the math problems that she would have been able to solve in her 20’s or 30’s.

We’re more asking the question of does she know, if she says I want this property to go this way, or to this person. I want this person to take care of me. Does she understand the implications of those questions. Is there consistency. That’s the first question that I would ask in response to this. Basically, if the mother still has her capacity and is pretty sharp then there are a lot of options for making sure that the mother can stay in the home and make a designation as to who the property will pass after she passes away. She could do a reverse mortgage, she could do a simple will, she could do a revocable living trust. There’s just a lot of different options in that scenario.

If the mother does not have her capacity anymore, and again, just settling quickly on capacity, this can often be a medical question and it would fall outside the expertise either the sister in this scenario or a special interest lawyers. Often times we may wish to consult a physician in order to determine whether or not an individual, elderly individual has the capacity. But if we’re on a case where the mother has lost her capacity, then yes, we’re a lot more restricted in what we can do. If we want to take some serious action like selling a property, it may be necessary to obtain a guardianship order from the court to that effect.

I know I’m jumping all over the place, but the other thing you have to consider is whether or not the mother has valid power of attorney documents, because if she does then a guardianship wouldn’t be necessary. There’s kind kind of an analysis that we go through whenever we get these types of questions to determine whether or not there’s capacity. Whether or not there are or not estate planning documents that will help out, and if not we might be looking at a guardianship scenario.

Brian, I kind of jumped all over the place during that answer. Did you have any follow up questions on that?

 

Brian:  Just one follow up. If a person has been determined to have lost capacity, can a person regain capacity?

 

Jordan Flake: Absolutely, yes. I use the term elderly when we’re talking about capacity, because it is often the case. I’ve had a few cases where there was a severe liver disorder, for example, on one client that I’m thinking about. He was a 52 year old man, otherwise fully had his capacity, but his liver disorder affected his ability to make decisions. We had to go out and get a guardianship for him. Fortunately a few months down the road, the liver issue was solved and we watched as his capacity came back fully and we were able to close out the guardianship. Guardianship is by no means a permanent situation. It’s often times, though, when we’re talking about adult guardianship, we are talking about elderly people who might be toward the end of their life, and that’s why they have lost their capacity.

In any event, if you are trying to provide for the care of a parent, and you have questions about how the assets are supposed to be distributed, please reach out to Clear Counsel Law Group. Talk with me. We can go over the scenario on the phone or I’m happy to meet with the elderly parent and basically we’ll go through this analysis and make sure we take all the right steps. Thank you.

What Estate Planning Documents Will Help You Avoid Probate?

 

 

Transcript:

Hi, I’m Jordan Flake. I am a managing partner at Clear Counsel Law Group. A lot of times we get the question: what kind of estate planning documents can help me avoid the probate process? In order to tackle that question, it’s important to understand that probate is the court supervised process of determining where assets go after an individual’s death. When a person passes away, with assets in their own name, we’re in a place of insecurity where we really don’t who gets those assets and under what conditions they get those assets.

That’s when the state law steps in and says, “Okay, if Molly, 87 year old woman, Molly,” I’m thinking of a client of ours, “passes away, and there’s assets just in here name. A house, a bank account. The bank is not just going to give that money to her kids just because they can produce a birth certificate. They need more assurance in order to release Molly’s account to the children.

What do they need? They need a court order saying that these individuals are entitled to this bank account. The process of obtaining that court order is known as the probate process. It is not as simple as it may seem. You have to prove to the court, the word probate actually comes from the same word “to prove,” you have to prove to the court where these assets go and why they should go there. In order to do that, you have to hire an attorney and go through a very long and costly process. A lot of what we do as estate planning attorneys is to ensure that your loved ones are not left, at the time of your passing, in a probate situation.

What documents can bypass the need for probate? The main one that you want to look for, in an estate planning attorney, is a revocable living trust. It sort of operates like a box. You can think of it as a box. You can also think of it as a living legal entity, not a human, but a legal human entity of sorts. Once you place assets into that box, then for purposes of the law, that’s kind of set aside outside of your own name.

Let’s just go back to the example of Molly, whereas she passed away with a bank account in her name, the bank had this confusion about where to send this asset and basically told the loved ones, “Go get a court order saying where this goes.” Let’s take that exact scenario with Molly had seen an estate planning attorney in advance.

Molly puts the assets into a box, into a revocable living trust. The bank account, instead of listing Molly on it, lists her trust. When the survivors go in, at that point, then the bank says, “Oh, this is a trust account. It’s not owned by an individual. What does the trust say to do with this account?” At that point, the bank doesn’t need any kind of court guidance to determine what to do with the assets in the bank account. Instead, they look to the trust, which was signed previously by Molly, and they follow the instructions contained in the trust.

If you think about estate planning and how to avoid probate, it’s just the preemptively declaring in a very formal and official legal sense, declaring to the whole world, what you want done with your assets at the time of your passing. Normally, by putting them into this separate legal entity or box, if you want to think of it like that, that will persist in its validity even after you pass away.

Please come see us at Clear Counsel Law Group if we can either review an existing trust or give you a consultation about your different options in terms of putting your assets into a revocable living trust. Thank you.

 

A Conversation Explaining How a Series LLC Will Protect Your Small Business

 

Why You Need to Reorganize Your Small Business into a Series LLC

Transcript:

(Editor’s note: Brian is Clear Counsel’s Communications Director. His prompts represent a conglomeration of inquiries submitted. If you have you have a question you would like answered in an upcoming video, email the inquiry to brian@clearcounsel.com)

 

Jonathan: Hello, my name is Johnathan Barlow. I’m a partner at Clear Counsel Law Group. Recently, this year, Google received a lot of press by announcing that they were reorganizing a parent company called Alphabet Inc., and that they were then going to essentially separate Google’s operations into separate subsidiary entities underneath Alphabet Inc.

I’m going to leave the reasons why Google did that to the talking heads, but let me explain some reasons why it makes sense to you, even as a small business, that may not be a multi-million dollar business, like Google, but a small business, would take advantage of this organizing into separate legal entities.

The most important reason why you might separate your business into separate businesses, is for asset protection. For instance, let’s think of a dentist’s office. The dentist has different aspects of their business that they might not think about. You have the actual practice of dentistry, the seeing of patients, billing patients for dental care. The dentist also owns a lot of equipment. He owns examination chairs, X-ray machines, a lot of equipment. He may also own his building where his office is located.

If you think about all three of those different aspects, each of those three could be separated into separate business entities to take advantage of asset protection between them. For instance, if he had a problem with one of his patients, and the patient began to look for collections against the dentist, the patient would be limited to the business receipts. They wouldn’t be able to take out the examination chairs. They wouldn’t be able to put a lien against the building. It becomes beneficial to separate these assets into different business entities.

There’s some interesting other techniques about this, and I think Brian, one of our readers here, has some questions about that. Brian, could I answer a question for you regarding that?

 

Brian: Sure. There’s some confusion as to if a single individual could create multiple companies under a series LLC. Wouldn’t they just look at all these LLCs, and go, “This is just one person.” Is that really going to work?

 

Johnathan: You’ve actually brought up a really good magic word, so to speak, in Nevada. Nevada has this fascinating technique, or business entity, called a series LLC. What it does is that, with the state of Nevada, you create one LLC, just one with the state, but under that LLC, you then create separate series, and you could have series one, series two, series three, series four, and so let’s use the example of the dentist.

He’s going to create Dentist LLC, and in series one, he’ll put his business practice. In series two he puts his dental equipment. In series three he puts the ownership of the office building. Each of those series is treated as if it was a separate LLC with asset protection between each one, and yes, one single owner can do that and take advantage of the effect of having different business entities, but using just one LLC through the different series. Does that answer that question a little bit?

 

Brian: It does. I have another question if that’s okay?

 

Johnathan: Go for it.

 

Brian: How many of these series LLCs am I allowed to have? Is there a cap?

 

Johnathan: If you create one series LLC, how many different series could you have underneath that, is that …

 

Brian: Correct. Yes.

 

Johnathan: The statute in Nevada doesn’t define that answer. The statute doesn’t say you can only create 10 series, so theoretically, until somebody tells us otherwise, you can create as many series as you want, and they don’t all have to even be related to each other.

Again, talking about the dentist, he may have three series to go with those three aspects of his dental practice, and series four actually could be his investment property that he owns, that he rents out to Brian, to you Brian.

 

Brian: Big mistake.

 

Johnathan: It would probably be a big mistake to have you as a tenant, but let’s assume that we don’t you, when you fall down the stairs, for the purpose of suing the dentist, we don’t want you getting into his dental assets, and so that’s why we separate these liabilities between the different LLCs.

Even a small business in Nevada can take advantage of these really powerful techniques to separate liability, separate assets between different business entities, using a series LLC, or you can use different LLCs, whatever works best for you. Nevada has this really unique tool of using the series LLC. It’s very flexible, and it’s an awesome tool. It can be used by all Nevada business entities.

For more information on this, I encourage you to go to our blog on clearcounsel.com and read more about the series LLC, and about the Alphabet Inc. analysis, when Google transferred to that.

Why Do You Need an Attorney for Probate Matters?

 

How Will an Attorney Assist You With Probate?

Transcript:

Hi, I’m Jordan with Clear Counsel Law Group. I’m an attorney who practices a lot in probate. One of the questions that we get, when a person passes away, their family comes to us and says, “Why should I have to hire an attorney in this situation?” The answer is because it’s actually pretty difficult to interface with the court. Here in Nevada we have a little bit more of a complicated probate statutory structure. The process is a little bit more difficult. I assume, in a lot of ways, that’s because we’re a retirement destination. I think there’s a lot of exploitation in our state. When a person goes to the court saying, “My loved one has passed away and I want to get their property,” there’s really a lot of hoops that that individual has to jump through.

There’s getting all the right notices put out there, noticing everybody who’s entitled to notice that you are seeking to become the personal representative of the estate. There’s notifying creditors. There’s doing orders and notices of entry of order, and just a lot of different documents. There’s letters of administration or letters testamentary that need to be filed. I’m all for do-it-yourself legal solutions; however, in the probate context I’m very, very confident that it’s going to be much more economically advantageous to hire an attorney. Not just because it simplifies things and the attorney has the expertise to do that, but also because if the personal representative were to try to go it on their own and make a huge error, that can come back to them in the form of liability. I would strongly, strongly recommend that if you have to administer the estate of a deceased love one, that you contact Clear Counsel Law Group so that we can give you an idea about what to expect and how we might be able to help you.

At Clear Counsel Law Group, our goal, and our motto when it comes to representing individuals who have had loved ones pass away, is maximize your inheritance, not your attorney’s fees. That’s why we charge on a flat fee basis rather than some kind of hourly basis that can get way out of control. Come talk to us about how we can maximize your inheritance and minimize your attorney’s fees by charging on a flat fee basis. We’d love to talk to you about it.

What You Need to Know about a Special Needs Trust

 

 

How a Special Needs Trust Will Help You

Hi, I’m Jordan Flake with Clear Counsel Law Group. I do a lot of estate planning in my practice and one question that I see from clients is what do I do about my son or daughter who has special needs? When we think about a special needs beneficiary, we’re thinking about somebody who maybe is receiving government assistance or who can’t live on their own or maybe has some kind of incompetency that prevent them from being able to handle all of their own affairs. Often times, these individuals are receiving government assistance that we don’t want to disrupt. That’s the really big concern. If you leave your child maybe $100,000 under a life insurance policy, that money will just land in their lap and could threaten their ability to continue to receive government assistance or government benefits.

You don’t want to just list your special needs child on a bank account or list them in a life insurance policy because you might actually end up harming them to the extent that that gift would limit their ability to receive financial assistance from the government. What you may wish to consider instead is doing what’s called a special needs trust. The essence of a special needs trust is that the money, all the money set aside for the special needs child will go for their use, benefit, and enjoyment. However, all that money will go to them in a way that will not prevent them from receiving government assistance. It can go to them, but just not in an outright, direct kind of way that would prevent them from receiving government assistance.

So if you do know of anybody who has special needs and their parents or their loved ones are trying to set up a trust for their benefit, it’s absolutely necessary that you come see an attorney so that that special needs trust is set up properly so that it doesn’t end up hurting the special needs individual in the long run. Feel free to meet with us at Clear Counsel Law Group and we’ll do a free consultation and we’ll discuss your different options for dealing with giving gifts to special needs individuals.

Divorce, estate planning, nevada

Estate Planning and Divorce: What to Keep in Mind

Here at Clear Counsel Law Group, we make sure all of our clients know how important estate planning is. While it is daunting to plan for the unexpected, we have all too many probate cases where families disagree over what the deceased would have wanted, but without something in writing, there is only so much attorneys can do. For instance, if someone’s grandmother intended to leave one specific grandchild her home but never put anything in writing, it is unlikely that the home will end up with that grandchild when there are other heirs. With an estate plan in place, the house will end up in the right hands. But even a good solid estate planning might need to periodically updated.

For example, over half of all marriages sadly end in divorce. No one ever thinks it will happen to them, yet it does.

 

How Divorce Affects an Estate Plan

We have seen several cases where someone passes away at an intermediate stage of the divorce process, before the divorce becomes final. While it would seem rather obvious that a person divorcing their spouse would not want their estranged partner to inherit all of their assets, unless the divorce is final, a spouse is considered a spouse under the eyes of the law. Therefore, even with divorce papers on file, unless the ink is dry, the soon-to-be ex-spouse has all the same rights to inherit as a spouse who was not divorced.

In addition to divorce papers, when couples separate they are likely financially tied in even more ways than they realize. Situations often come across my desk where life insurance policies are designated to a future ex-spouse. Fortunately, life insurance designations are automatically revoked upon divorce in case someone forgets to amend. But even so, life insurance policies with revoked beneficiaries often go to a decedent’s estate, which might then end up in the hands of that same divorcing spouse. Not only that, but sometimes married couples with joint bank accounts forget to remove an ex-spouse who then drains the account upon death with no regard for children or other intended beneficiaries1)This is not an exhaustive list of examples. Some spouses never legally divorce but live for 30 years completely separate and apart, practically forgetting they were even married in the first place. But, the Nevada probate courts are crystal clear on the issue: if two people are legally married, the spouse inherits in the exact same manner as a spouse that never spent a day away from her partner. We have even had cases where a decedent “married” twice and the legal wife and the cohabitating wife were left to duke it out. What a mess this can cause, financially and emotionally!

 

Divorce and Incapacity: A Lesson from Recent Headlines

In addition to a divorcing spouse inadvertently inheriting an entire estate, what about a divorcing spouse who becomes incapacitated? This situation arose very publicly this month with “Keeping up with the Kardashians” star Lamar Odom. The former NBA player was found comatose and required someone to make medical decisions that he could not make while unconscious. Lamar was in the midst of a nearly-but-not-quite-final divorce from Khloe Kardashian. Because the divorce is not final, Khloe is the spouse for all intents and purposes, as if the couple were headings towards happily ever after. It is unlikely that a person facing an impending divorce would think to designate a medical power of attorney once they file for divorce, but this is important!

Strangely enough, the tabloids are reporting that Khloe and Lamar have decided to give their relationship another shot after Lamar’s near death experience. But, I do not suspect that this is the typical outcome. Although we never really anticipate this specific situation, someone whom you are getting divorced from is probably not the person you want making medical decisions on your behalf, much less inhering under your estate.

As estate planning attorneys, we regularly check in with clients to update their plans. Any new homes purchased, accounts acquired, children born, or even a new job with a 401k plan can warrant updating an estate plan. I mention to all estate planning clients that not only should they contact me for changes in assets and when they get divorced, but they should contact us the minute they decide to divorce so we can help them adjust their estate plan accordingly. In some situations, it is even appropriate to insert a divorce contingency in certain estate planning documents to make clear what should happen if it appears parties are headed towards divorce.

We can never plan for the unexpected, but we can certainly try. Contact our attorneys today for a free consultation to set up an estate plan, including a plan for whom should make decisions on your behalf if you ever become unable.

Footnotes   [ + ]

1. This is not an exhaustive list of examples

How to Learn the Status on Your Probate Case

 

How do you check on the status of your probate case?
Transcript:

Hi. I’m Jordan Flake. I’m an attorney with Clear Counsel Law Group.

I do a lot of probate work. One of the questions that we get from time to time is, “I have a will that is being probated for a deceased loved one, but I really want to check on the status of that.”

There are different websites in Nevada court systems that basically will tell us what the status of the case is. We can go on those websites and look up the case and see where they are in the probate process.

This is really important sometimes, especially if you have a personal representative named under the will who maybe isn’t doing all the things they need to be doing or who is not maybe doing them as quickly as they need to be done.

If you’re in a situation where maybe you’re not the executor of the will, or maybe you’re not the personal representative of the estate, and you want an opinion about whether or not the personal representative is actually doing their job, that would be a great reason to give us a call.

We will happily look up the case, let you know what has been done, what hasn’t been done, the time frame that you’re looking at, and the different elements that should be there.

That’s something that we’d be happy to help you out with. Give us a call.

 

How Much is a Personal Representative Paid to Administer an Estate?

 

How is the compensation of the personal representative determined?

Transcript:

Hi, I’m Jordan Flake with Clear Counsel Law Group and I practice a lot in probate. One of the questions we get is, what kind of compensation can a personal representative expect to receive for acting in that capacity? Basically, the question here is, when someone passes away the court often has to appoint a personal representative to deal with that individual’s assets. Of course that can be a difficult job sometimes. It can require … It could be as easy as maybe liquidating a few bank accounts, but it could also be as difficult as cleaning out a house or notifying a bunch of creditors. There can be a lot that goes into that. The question is, what does that person get paid for all of their work?

In Nevada there’s two ways that a personal representative gets paid. There’s something called ordinary kind of statutory type fees. These are determined as a percentage of the overall estate. You could expect on maybe a $100,000, $200,000 estate to get paid $2,000 or $3,000 for your work as a personal representative. However, if you think you’ve done more than that, and you’ve had to do what’s called extraordinary work such as cleaning out various storage sheds or a house. That would be covered under extraordinary work and the court basically just looks at what’s fair and reasonable under those circumstances.

In any event, if you’re listed as the personal representative on a trust or on a will, then feel free to give Clear Counsel Law Group a call so that we can help you with those responsibilities. Definitely if you’ve gone above and beyond just the statutory bare minimum for the kind of work you put in, then absolutely we’re going to make sure that you’re compensated fairly. If you’re listed as the personal representative under a trust or a will, feel free to give us a call and we can help you out with this.

Does a Trustee Have the Option to Exclude Beneficiaries?

 

May a Trustee Unilaterally Exclude You as a Beneficiary?

Transcript:

I’m Jordan Flake with Clear Counsel Law Group. One question we get a lot in our probate practice is, can an executor of a will or a trustee of a trust unilaterally exclude a beneficiary from receiving their share. This is obviously a big concern if you’re a beneficiary and you feel like the personal representative of an estate or the trustee of a trust is just kind of arbitrarily saying, “Yeah. I know you’re listed in the will, but I don’t like you and I don’t want to give you anything.”

The answer is that’s not allowed. If the individual who left the last will and testament or the individual who wrote the trust leaves a beneficiary something through that document, then the executor or the trustee has to actually comply with those wishes. They can’t just decide on their own not to give that gift. If you are the beneficiary of a trust or a will, and you are concerned that maybe you’re not receiving everything that you’re entitled to, then feel free to give us a call at Clear Counsel Law Group. We’ll sit down with you and review the documents, and review your options.

 

Do Verbal Instructions Create a Valid Will?

 

Are verbal instructions sufficient to create a valid will?

Transcript:

Hi, I’m Jordan Blake. I’m an attorney with Clear Counsel Law Group. I do probate and I also do estate planning. I have this question that comes up from time to time as to whether or not verbal instructions can be valid for disposing of someone’s property after you pass away. The question is, sometimes I meet with an elderly individual who says, “I told my kids what I want done and they know. They know what needs to be done.” That may be the case. The kids may cooperate. The question is, is that verbal instructions actually enforceable and legally valid. The answer is, no, it’s not.

That’s why we have. That’s why we have trusts. It’s because merely verbal instructions are not actually legal and enforceable. They’re certainly better than nothing in terms of letting your loved ones know what your wishes are, but if there’s any kind of dispute as to those verbal instructions, it’s gonna be a situation where it’s very much he said, she said. There’s not gonna be any kind of legal guidance as to what happens. If you merely leave verbal instructions, what’s likely to happen is the court will divide the property via what’s called intestacy, which just means they will consider you to have passed away without a will. Usually that goes first to the surviving spouse, then to the kids, then to brothers and sisters, kind of in that order.

In any event, we would strongly, as attorneys, as estate planning attorneys, we would strongly, strongly advise against just trying to leave assets via verbal instructions. Very important to get into CS so that we can talk about the different options for making valid, enforceable, written instructions. Feel free to give us a call, Clear Counsel Law Group. We’ll gladly sit down with you and do a free estate planning view.

 

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