A Will allows you to determine in advance how to dispose of your estate assets upon your death. Any person 18 years or older sho is competent may execute a Will. A Will must be in writing; must be signed by the person aking the Will (called testator); must be personally witnessed by at least two people people who will not benefit from the Will; and must be signed the testator in presence of these witnesses. Hence, the term "Last Will & Testament." This is called a "testate" estate--because of the Will. Nevada is a RARE state that recognizes the use of "electronic wills."
Property left by a Will only must be "probated" in the county of the decedent's Nevada residence. This is expensive (more expensive than setting up a living trust). Probate is timeconsuming--1 to 2 years on average. Worst of all, probate is "open to the public," so others can know of your assets, make claim to them, attack the Will and frequently litigate their claims in open court. But to die without a Will is often worse.
What happens if I die without a Will?
If this happens, your estate property will be distributed to certain predetermined "heirs" under Nevada's law of "intestacy." This is called dying "intestate"--meaning without a Will. Dying intestate means your entire estate must be "probated" before the court. The LAW determines who your heirs are and who will inherit--often NOT the person the decedent ever intended to receive their estate property. The Probate Court may award property to a surviving spouse or children; however, unadopted step children receive nothing. If no legal heirs are found, your property is given to the State of Nevada. Dying "intestate" is undesirable, often messy with "heir battles" in Probate court, all because there was no written Will.
TRUSTS (Living/Revocable)
A "living" or "revocable" trust is a very common estate planning tool. These trusts are NOT just for wealthy people. They're common and used by millions of average Americans today, and for good reason. Trusts have great legal and other advantages over wills. The MAJOR advantage to these trusts is they help AVOID PROBATE--the expensive, time consuming and entirely "open to the public" process most people wish to avoid. Trusts avoid probate. Probate is required only if a person owns assets that are title in their name or names outside the trust--a home, real property, investments, art, even registered/papered animals. If this happens, the only way to transfer title to another person is through a probate court order. The cost to set up a living, revocable trust is very small compared to legal fees, delay and public exposure of probate.
A living trust can own assets in other states, which also escape probate. With a trust, assets in another state must go through probate in that state. Again, expensive, time consuming and anyone from the public can inspect, object or take issue in the public probate court concerning the assets.
HOW DOES A LIVING/REVOCABLE TRUST WORK?
When you and your spouse have both passed on, at that moment the trust becomes "irrevocable." This means it cannot be change and property in the trust must be distributed as you have directed. You and your spouse become "trustees" of the trust. You have control of the assets and can change, amend or even "revoke" and cancel the trust during your lives if you wish. When you both have passed, a successor trustee of your choice steps in to manage the trust as you have instructed. Your trustee then assigns assets as you have instructed through private, simple process of "trust administration," instead of the more troublesome public probate process.
If you become disabled or incapacitated, the trust provides for who steps in to help. However, without a trust, you are left to the courts to decide whether a guardian or conservator should be appointed on your behalf--a decision made in a courtroom and publicly.
During your lives, you pay taxes on the assets of the trust essentially as though they were yours--because they are. Upon death, the successor trustee steps in. When all trust property is distributed, the trustee must file a federal estate tax return. When the trust has served its purpose and distributed assets as you directed, it then "terminates" having served the purposes you desired.
Various different types of trusts are also available: Insurance Trusts (use life insurance proceeds for your estate plan), Asset Protection Trusts (to shelter and insulate assets away from the reach of creditors), Spendthrift Trusts (slowly distribute assets to minor children or a family member with substance abuse history), Charitable Remainder Trusts (to fund a favorite charity and save taxes), and other specialized types of trusts.
Living or revocable trusts and NOT just for the wealthy. Millions of Americans of all income levels use them today. These trusts are effective, inexpensive compared to probate, keep your affairs private, can save taxes and are not open to public scruity or scandal.
Call SANDY at 775-686-2411 or email us at info@jensenlawgroup-reno.com for a CONSULATION.