Are You Familiar with Nevada's New Estate Planning Laws?
Hello, my name is Jonathan Barlow. I'm a probate and Nevada estate planning attorney here in the Las Vegas, Nevada area at Clear Counsel Law Group.
In the last legislative session, the Nevada legislature passed a significant change to the probate and wills laws in the State of Nevada, and something that has significant benefit for people in the State of Nevada, and what I'm here to talk to you about today.
What the legislature did was they added a provision in the statutes, in the laws that says that while you're alive, before you die, you can go into court and ask the court to look at your will or even your trust but, particularly here, your will and have the court look at that, take your testimony about it, talk to you about it while you're alive and well and have the court enter a court order that says that your will is valid.
If that happens while you're alive, you get a court order that says your will is valid, after you die, nobody can contest it. Nobody can come along after you die and cost a whole bunch of money, cost a whole bunch of attorney's fees to be incurred, a lot of litigation in a will contest after you die.
It's a fascinating new law that could have significant benefit for most people in the State of Nevada, particularly those who have some nontraditional estate planning. We'll talk about that in a second.
What is Declaratory Relief? Why Does it Apply to Nevada Estate Planning?
First, how does this happen? Let me tell you about the basic premise behind this. There's always been a right under Nevada law to get what is called declaratory relief. It's where you go into the court and ask the court to declare your rights or to declare the obligations of parties to an agreement or other situations. That's called declaratory relief.
Let me give you a short example. If there are two businesses who've entered into a contract for business purpose, and they come to some dispute or disagreement about what this provision means in the contract, and one person or one business is alleging that the other has breached that provision, one of the parties could go into court and ask the court to declare the rights of the parties related to that contract.
What that means is the court could interpret that contract, interpret that provision and tell the businesses, "This is what you're obligated to do. This is what your rights are under that contract." That declaratory relief has always been here in Nevada law. Now it just applies to Nevada Estate Planning as well.
The Changes Made to Nevada Estate Planning Law Last Legislative Session
Last legislative session, the Nevada legislature took this declaratory relief right, and they married it with the probate and will laws of the State of Nevada to provide this before death declaratory relief regarding the validity of a will. It's a fascinating change to the law.
The reason this is really important is we've seen for as long as there has been wills, there have been will contests. Those have always happen after the person dies.
Mom creates a will. Say, she disinherits one of her sons. She's mad at one of her sons and leaves nothing to her son.
After mom dies, that son is always mad and, almost always, they start what's called a will contest, or they bring an action in court to say, "Hey, court. You need to look back in the past when mom did her will several years ago, and go back in the past, and determine that mom either didn't know what she was doing, she wasn't of sound mind. That somebody coerced her or there was undue influence. That there are some reason that will is invalid, and we're going to rid of that will."
That's a will contest. It cost tens of thousands of dollars of attorney's fees for the parties, let alone the difficulty it causes with families, obviously. That's traditionally been the will contest paradigm is it's all happening after death, after the person who created the will is gone.
What Declaratory Relief Means for Nevada Estate Planning
Well, with this new declaratory relief, we have this amazing ability to bring the person who wrote their will, who prepared their will, bring them in front of a judge and have that person sit there and tell a judge, "Judge, this is exactly what I'm doing. I know what I'm doing. I know why I'm doing it, and this is exactly why I want to disinherit my son."
The person who knows the most about whether the will is valid can do that while they're alive and not wait until after they're dead, and gone, and buried in the ground to have their children fight about it.
What's the process to do this? You have to file; it's essentially like a civil lawsuit. You're going to bring an action in the court to have the court and ask the court to take a look at your will, take your testimony and declare it to be valid while you're alive.
Important thing about this though you need to know is that your children and anybody else that you name in your will, say, you've named a charity, or a friend, or somebody else like that to receive a gift, your children and anybody named in the will are going to be entitled to receive notice. They get to know that you filed this action.
What that means is that child that you may have disinherited has every right in the world to come into this case while you're alive, and sit across the courtroom from you, and tell the judge why the judge should find you to be incapacitated, or of not sound mind, or some reason why your will should not be valid.
They have that right to come here and say while you're alive why it shouldn't be considered valid.
How the New Law Changes Nevada Estate Planning
The truth of the matter is I believe that there are going to be a strong disincentive to do that. How awkward will that be amongst other things to have a son come in, look across the courtroom, look across the table and tell you why you're crazy while you're sitting there, and the judge can look at you and talk to you, and explain why you're not crazy and determine that you're not crazy?
It changes the whole paradigm from this after death will contest where it's a free for all. There's so much angst, and dispute, and litigation after death when the person most important is already gone. It's going to change that paradigm and cut way down on those cost of litigation to do it before death.
I think those people who are disinherited are going to have much less incentive, or it's going to be much more difficult for them to come into court while you're still alive and try to prove you to be incapacitated or some reason why the motion shouldn't be valid.
If you have already done a will or a trust, or if you're considering doing a will or a trust where you do something that we call nontraditional, meaning that you're not just giving it in equal shares to your children or something like that, maybe you're disinheriting one of your children or you're giving one of your children a much larger share than the other kids, something that I promise you causes will contest after you die, if you're considering that, I strongly encourage you to get specific advice about this declaratory relief action.
Here at the Clear Counsel Law Group, we are trained to do that. We've gone over this. We have a firm understanding of Nevada Estate Planning.
We're prepared to provide this advice. Whereas I know that most other firms are not providing this advice out there, and it's something you need to know if you're going to be doing nontraditional estate planning.
Give us a call.
We'll walk you through, not only the process of creating that will with the nontraditional gifts in it, but also advising you about whether it makes sense or not to take this into court and get declaratory relief before you die that your will is valid.
I look forward to talking to you about this. It's a super fascinating change in Nevada estate planning law and we look forward on being on the forefront of this as we implement this in the State of Nevada.