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Estate Planning with a Car Title only in the Name of One Spouse

What to do with Your Estate Plan if Your Car Title is only in the Name of One Spouse

Transcript:

Jordan: Hi, I'm Jordan Flake. I'm an attorney at Clear Counsel Law Group. I have a question here: My husband's name is on the title of a vehicle that I have made all the payments for. If he dies before the title can be put in my name, will the vehicle go into his estate?

That's a good question. The general response to that is when we're trying to determine what assets go into someone's estate, what we look at is whose name is on the title. For this client here, if your husband's name is on the title of the car and he passes away, then automatically we're going to assume that that car is part of his estate. Now this is a tough situation because for this individual they made all the payments for this car. You have two response about a better way to handle this.

One is how do we handle this better in advance of this problem. That would be probably with the vehicle, just putting it in some kind of joint ownership. You can put either and/or on the title. You probably would have done well to put or on the title of the vehicle and say husband or wife owns this. That makes it as simple as possible. Obviously, in this case, maybe they didn't get a chance to do that. The vehicle's just sitting there in the husband's name and he's now passed away.

The next part of the analysis would be what else is in the husband's estate. Because if it's just the car, we may be able to do a small, simple DMV form affidavit of entitlement that basically gives the wife the title of the car without any problems. If there are properties and bank accounts and investment accounts in a larger estate, then basically dealing with that estate is going to have more procedure, more requirements. That becomes a very fact-intensive analysis.

In any event, though, if the spouse was the one that make all the payments, if the wife in this scenario was the one to make all the payments, we should be able to get those basically back in her pocket one way or another. Any other questions on this?

Brian: Back to the DMV affidavit. If the wife had not made all of the payments, but let's say three-quarters of the payments, is that still a possibility?

Jordan: Here we're assuming that maybe it's an intestate estate. Everything would go to the surviving spouse in this scenario if there is no will. If there is a will or if there's a trust, that can affect maybe the distribution, but here it wouldn't matter if the wife had made none of the payments. If there's no will, state law says everything goes to the surviving spouse. It really wouldn't matter if the spouse had made all or none of the payments in that case.

In any event, though, if you come across a situation like this, call me up. We can discuss it. We can meet for a free consultation. I'd be happy to walk you through this or any other type of estate-related question you might have.

Protecting Your LLC: How to Transfer the Rights to a Family Member

Transfer Your Interest in an LLC to a Family Member

Transcript:

Jonathan: Hi, my name is Jonathan Barlow. I'm a partner attorney at Clear Counsel Law Group. We handle estate planning and we handle business planning. The question we have today that I'm going to answer blends these two areas in one question. The question is, how can I transfer an ownership interest in my LLC to a family member? There's basically two times that you might think about a transform happening. One, while you're alive, and two, after you pass away.

First, if you think about wanting to transfer an ownership interest while you're alive, I highly recommend that you do this as formally as possible to make it very clear that you did both intend to transfer the interest and that you actually did transfer the interest. That can be done formally through a simple document. We call it an assignment of ownership interest. In that document, you simply recite that you are an owner of the business in such and such a percentage, and that you hereby or give such and such as percentage or amount to the person you want to give it to. Sign it, date it, have it notarized. That actually acts as a formal transfer of ownership interest. It formalizes it and makes it very clear what your intent was.

After you pass away, if you have an intent to transfer the interest after you have died, you want to make sure you also do that very formally. You could that either in a will or in a trust. If you do it through your will you're probably going to have to ... or your family member will have to go through probate in order to get their interest in your business, which could delay the operation of the business while that process is happening. The best way to plan for an after-you-die transfer is through a trust.

In your trust, just like any other asset, you can specifically list 25% of my business or half of the business or all of the business to be transferred to my son John when I pass away. That can happen pretty easily and quickly after you die through the use of a trust. Those are the two best ways to do that and transfer those ownership interests. Brian has a question about this.

Brian: What happens to your LLC if it goes into probate?

Jonathan: That's a good question. If the LLC, which becomes an asset of your estate when you die and in order to get it transferred out of your estate to whomever's going to inherit it, it goes through probate, what happens to the business? That's an interesting question. If there's not already other business managers operating the business, if the person who passed away is the only manager, the personal representative or executor of the estate can be appointed with authority to continue the business of the LLC. The court would grant that person, the executor, authority to step in the shoes of the manager of the business and continue with the operations of the business while the probate is occurring until it is transferred out of the probate estate to the heirs.

That may or may not be a good idea. That's also a reason why you want to think about using a trust to avoid that potential process. Because that executor may not have the business acumen that you would want them to have in order to operate your business. Thus again, using it through a trust allows you to be much more formal and specific about how you want that ownership interest to transfer, and the management interest as well. If you have questions about your LLC, about your ownership interests, how to transfer those, I encourage you to give me a call or any of the attorneys here at Clear Counsel Law Group, and we'll do our best to answer your questions.

Corporations / Corporations Videos / Estate Planning - 12/30/2015

Should You Own Your Home in a Trust?

Is It Best to Own Your Home in a Trust?

Transcript:

Jordan: Hi, I'm Jordan Flake. I'm an attorney with Clear Counsel Law Group. I'll often get the phone call from someone who just purchased a home, and they'll say, "Hey, I just purchased a home and my real estate agent said something about a trust. Do I need to own my home in a trust?" The answer to that question is what are you trying to accomplish with the purchase of this property. There can be a lot of different reasons why you buy a home, and a lot of different things to take into consideration.

In Nevada, if you own a home in your own name and then you pass away, that home just continues to stay in your own name until a court has come along and said this is what is going to happen with this property. They do that by way of a court order that gets recorded in the county where the property is sitting. Obtaining that court order is the probate process. That will trigger, in a lot of the viewers' minds, correctly trigger, this image of something that's a little bit of a time consuming, potentially expensive court process that can lead to a lot of problems and difficulties. When somebody asks me if they need a trust for their home, then usually I explain what this probate process entails and how to avoid it. The way to avoid having to go through the probate process is to put the property into a trust.

A trust operates like a box, and everything that's placed into that trust will not need to be probated when the individual passes away. That's the advantage of owning real property in a trust. There can be a lot of different ways to hold real property. If you own the property as a rental, you may wish to consider using an LLC, which is a business, to own the property. It's really just a case by case basis. I'd love to sit down with you and go over what you're trying to accomplish so that we can make sure that we use the right estate planning instrument for your objectives. Brian does that cover the question or was there any follow-up on that?

Brian: That covered the question very well. One follow up, though. Could you explain how the probate process gets expensive?

Jordan: The reason the probate process gets expensive is because the ... The word probate just means to prove or to try. The thing that the court is trying to prove or try is that the people who have come to the court saying, "Hey, my mom and dad passed away. We're entitled to these assets," the court kind of ... you can think of it like the judge leaning back in his chair and saying, "Really, are you really entitled to this? Prove it." Basically, the probate process is saying prove to us that you deserve the deceased individual's property. That gets expensive because that requires an attorney to come to court. It requires the appointment of a personal representative. It requires that we publicly announce the probate to allow competing claims to have an opportunity to come into court. There's certain time frames involved with probate.

It just gets costly and time consuming. That is part of why people should seriously consider doing a trust, is because a trust is an estate planning instrument that will allow you to avoid the probate process entirely. Other questions on this, Brian?

Brian: You said that a trust is good for real property. Will a trust help me plan for property that isn't real property?

Jordan: Yes, absolutely. Take a bank account, for example. The same scenario exists if it's just in the name of client Bob Jones and Bob Jones passes away and he has a bank account at Wells Fargo that has $40,000 in it. Bob Jones' children might go to the bank and say, "Well he was our father. We think that we are entitled to this." The bank will say, "That's all very well and good. However, we need a court order allowing us to release these funds to you." Obtaining that court order is the probate process. That's what we're trying to avoid. What Bob Jones could have done instead is go to his bank account and list the Bob Jones Trust as the paid-on-death beneficiary, and that would have gone into the trust, and therefore avoided probate. If you have any questions about that, feel free to give us a call at Clear Counsel Law Group. Thanks.

Estate Planning / Probate / Probate Videos - 12/01/2015

Why Estate Planning is for Everyone

Why Everyone Needs Estate Planning, Not Just the Very Wealthy

Transcript:

Jordan: I'm Jordan Flake. I'm an attorney with Clear Counsel Law Group, and I do a lot of estate planning in my legal practice, and one thing that people are starting to catch on to is that estate planning isn't just for the elderly or the rich. It's really for everyone because we all have an interest in protecting, for example, what happens to us if we become incapacitated, and so as we start to cater our services to a younger generation who see the need for estate planning, we're getting a lot more questions about why does this costs so much or how much is this going to cost, or am I going to get additional bills?

Let me tell me you a little bit about how the marketplace generally charges for estate planning services. On the extreme low end of the spectrum, there are non-attorney solutions to estate planning, and those non-attorney solutions can include, for example, drafting your own legal documents, and that's something where oftentimes you can go online and purchase the form for maybe a few hundred dollars. I would caution against putting too much confidence in that situation. Obviously, I'm an attorney, so I'm the one who sees a lot of the times that those documents don't work out, but at the same time, I'm willing to say that that's better than nothing. In that scenario, you'd be looking at a few hundred dollars and working on it on your own. You wouldn't really have the backing of a law firm with respect to those documents, and so that's something you have to consider.

Kind of moving up the line, you have what are considered the simple estate planning documents, which often just include a will and power of attorney documents, and power of attorney documents are those documents that say what happens to me if I'm incapacitated. Who's going to make medical decisions on my behalf. Who's going to make financial decisions on my behalf, and if you're just doing those, you might be in the $200 to $300, possibly $400 range just to prepare those documents.

If you really want to do a comprehensive estate plan, then if you own property, it may likely include a revocable living trust, and once you do that, then you probably in the marketplace are looking more along the range of $1,000 to $2,000, and in terms of how attorneys actually bill for this, most firms know what preparing a trust entails because they've possibly done a lot of them like our law firm has, and so we know that we can simply prepare these documents on a flat fee basis because we understand what work will be involved in preparing the documents. That's how most lawyers are going to charge, is just on a flat fee basis.

That being said, you do have to be cautious because there is a tendency in advertising to want to bait and switch and say $499 for a trust, and then you go in and find out it didn't include other documents, such as a power of attorney document. That's just a brief overview. Different marketplaces can be different. If you want obviously the most accurate quote, please reach out to our law firm, so we can let you know exactly what it is that will work for you and how much we would charge you on a flat fee basis. Brian, do you have any questions on this at all?

Brian: Is there an age which would be too young to form an estate plan?

Jordan: Obviously, you'd have to be an adult to be able to sign those with any type of legal authority, but every estate plan that most lawyers are going to recommend will include a statement that says this is what I want to have happen to me if I'm incapacitated, if I pass away, and so there's no age at which there's no risk of incapacity or death, and so the answer is 18. If you're 18, you can use an estate plan. Now, whether or not that actually happens in practice, I would say certain life events would more determine the real need to come in and get an estate plan done. These life events could include, for example, marriage. It could include having a child, owning your first home. Those are some types of things that I would say definitely should trigger more urgency in your mind in terms of getting an estate plan done. Any other questions on that, Brian?

Brian: You're saying that if someone calls Clear Counsel Law Group, you'll be able to tell them up front what the cost will be for the trust.

Jordan: We will with a lot of accuracy be able to tell you after the first phone call because really it's just a question of what you're trying to accomplish, and if you have property, a house, life insurance policy, children, we're going to know pretty well. We've seen situations that we can let you know with a high degree of certainty exactly how it's going to come out. Now, in terms of exactly what it'll cost, we would like to do a free consultation, sit down with you, complimentary consultation. The reason we do that is because that'll allow us to get to know you better and get to know all the different circumstances. At the end of that free consultation, we will tell you exactly what we're facing.

Estate Planning / Probate / Probate Videos - 11/27/2015

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.

Estate Planning / Probate / Probate Videos - 11/19/2015

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.

Estate Planning / Trusts - 11/04/2015

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[+]

Footnotes
↑1	This is not an exhaustive list of examples

Estate Planning / News - 11/03/2015

Are Children Liable for the Debts of Their Parents?

Will Children Have to Pay the Debts of Their Parents?

Transcript:

Hi. I'm Jordan Flake, and I'm an attorney with Clear Counsel Law Group. One of the questions we get a lot in our probate practice is are the children going to be liable for the taxes or the creditors of the deceased individual? Obviously, think about it. If your mom and dad were to rack up a lot of debt, or taxes, or maybe have a judgment against them, you would legitimately be concerned whether or not those debts were going to come after you when they pass away. The answer is Nevada does not hold children responsible for the debts of their parents; however, you must understand also at the same time that the assets left behind by the deceased individual are responsible for the debts.

Let's say that there's a creditor. Let's just take VISA, a VISA card for $10,000.00, and your mom passes away, and she has a bank account that has $100,000.00, then that $100,000.00 bank account, if it goes into probate, would be liable for the $10,000.00 debt; however, that mom's actual children wouldn't themselves be expected to take money out of their pocket to pay off that debt. Just kind of a simplified answer is an estate is responsible for the decedents' deaths; however, the children are not. If you have a loved one who's passed away and left debts, Clear Counsel Law Group can help you resolve those debts and handle the probate so that, hopefully, we can maximize your inheritance and not the money that goes to the creditors. Feel free to give Clear Counsel Law Group a call.

Probate / Probate Videos - 11/02/2015

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.

Estate Planning / Probate / Probate Videos - 10/29/2015

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.

Estate Planning / Probate / Probate Videos - 10/27/2015

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