Estate Planning

The Procedure for Settling an Estate Without a Will

Caring.com reports, despite the COVID-19 pandemic, the percentages of older Americans without a will have remained the same. Remarkably, younger adults with a will show an increase of sixty-three percent compared to pre-pandemic times. This 18 – 34 year old demographic is now sixteen percent more likely to have a will than those 35 – 54 years old. These younger adults typically cite COVID-19 as the impetus to start taking estate planning seriously.

caring.com

Dying without a will (dying intestate) or dying with an invalid will cause logistic problems, becoming financially and emotionally draining on the loved ones you have left behind. In the absence of a will to name an executor, the state will provide a list of people eligible to fill the role. Should probate court be necessary, the court will make a selection based on this list.

Who Will Settle My Estate without a Will?

Typically, states make a surviving spouse or registered domestic partner their first choice. If there is no spouse or partner, then adult children usually follow next on that priority list, then parents or other closest family members related by blood. Further next of kin includes grandparents, grandchildren, aunts and uncles, nieces, and nephews.

There are rare instances where the state can find no next of kin. In this instance, your assets will wind up in the state’s coffers. Suppose your heirs are more distant next of kin. In that case, they may require an affidavit notarizing them to be heirs to the estate property and further documentation requirements to transfer ownership of assets. State intestacy laws encourage reasonable efforts by probate authorities to identify heirs in the absence of a valid will or no will at all.

In all cases, without a will, there must be a petition to the court to appoint a personal representative to settle your debts, final taxes, minor guardianship of children, and distribution of your personal property. In the absence of any legal heirs, the law permits the court to appoint any legally competent person.

What Relationships Are Acceptable for Representation without a Will?

Each state has relationship qualification requirements of intestate succession that may not be as obvious as you think. For instance:

  • Surviving Spouse – must have been legally married to the decedent at the time of death.
  • Legal separation or pending divorce – a judge will determine whether or not the surviving member of the couple is a surviving spouse.
  • Common-law marriage – Very few states recognize common-law marriages, and each state has its own sets of circumstances for approval.
  • Same-sex couples – Same-sex marriage is now legal in all 50 states and has the same rights and responsibilities as all legally married couples. Same-sex registered domestic partners or civil union partners recognition is state law dependent.
  • Adopted children – in all states, legally adopted children inherit from their adoptive parents in the same manner as biological children.
  • Stepchildren – Most states will not include stepchildren who were never legally adopted.
  • Foster children – These children will not usually inherit as foster parenting is not adoption.
  • Children adopted by an unrelated family or adult – Most states recognize that placing a child up for adoption severs the legal tie between them and their birth parents. Under intestate succession laws, neither the child can inherit from the parents nor the parents from the child.
  • Children adopted by a stepparent – Depending on state law, a child adopted by a stepparent may still inherit from their biological parents.
  • Children born after the parent’s death – Any child conceived before a parent’s death but born after (posthumous child) inherits just as children born during the parent’s life.
  • Children born out of wedlock – These children always inherit from their birth mother unless an unrelated family adopts them. To inherit from the father, the child usually must show some paternal proof.

Inheriting under intestate succession laws may require an heir to live a certain amount of time longer than the decedent. Depending on the state, this can be 120 hours, five days, or merely having outlived the decedent for any period of time qualifies them as an heir. If an heir dies, close relatives such as the deceased person’s child may inherit all or some for what their parent would have received. Known as the “right of representation,” these children or grandchildren may be eligible as heirs though it can be complicated to establish depending on state law.

What Could Happen to My Minor Children Without a Will?

If you have minor children having a valid will allow you to name a personal guardian(s). In the absence of a will, a judge will have to appoint an interim guardian until enough information about the situation is gathered to determine the best decision for the welfare of the children.

Depending on your circumstances, a will can be a straightforward document that removes the onus on your surviving loved ones to handle your responsibilities. If you have minor children or substantial assets, your will may be part of a larger estate plan.

Don’t let the state decide who inherits your money and your property. We would be happy to help you figure out a plan that works for you. Please contact our Reno office by calling us at (775) 853-5700.

Elder Law, Estate Planning

A Good Estate Plan Should Include the Following Five Items

Everyone should plan their estate, but as we age, it becomes even more necessary to do so. Many people avoid estate planning because they do not want to think about the end of life, failing health, or disability. Others believe that an estate plan is only for rich people. However, an estate plan is helpful for the senior adult and their families regardless of overall wealth.

The estate is all the property owned both individually and jointly, including bank accounts, real estate, jewelry, etc., and what is owed. Without an estate plan, it is very difficult to carry out a person’s wishes and can bring on a long, drawn-out probate that can be very expensive for the family. If an estate plan is in place, it can provide peace of mind for the senior adult and their family, as well as protection for the wishes of the senior.

Below are some basic guidelines for what should be included in an estate plan.

1. Will.  A will provides for an executor of the estate, who will take care of managing the estate, paying debts, and distributing property as specified. The distribution of assets can be outlined in the will. This can be as broad or detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be assigned. It may not seem necessary to discuss minor children when discussing seniors and estate planning, but with the rise of grandparents raising grandchildren, this may indeed be an important part of the will. A senior adult can spell out, in the will, how they want their funeral and burial to be carried out as well.

2. Living Will. A living will outline a senior’s wishes for end-of-life medical care. It can include, in as much detail as the senior wishes, what medical treatments the senior would or would not like to have in specific situations. A living will takes the stress of making those decisions off of family members and helps to keep peace in families during times that can be difficult and emotional.

3. Healthcare Power of Attorney. A healthcare power of attorney is also a key part of an estate plan. This legal document provides for someone to legally make healthcare decisions for a senior adult. A durable power of attorney will remain in effect for the senior if the senior becomes unable to make decisions.

4. Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in the place of the senior adult for matters relating to finances. The durable financial power of attorney stays in effect if the senior adult becomes unable to handle their affairs. By having a financial power of attorney in place, the stress and expense of a guardianship can be avoided, and the senior has the final say in who will make decisions relating to finances.

5. Trust. Setting up a trust can be beneficial for the distribution of specific assets or pieces of property. The benefit of a trust is that it does not go through probate, as compared to a will. Property is still distributed at the death of the trustmaker, but it is done without the need of a court.  This also allows for privacy of the trustmaker, where with a will and a probate, all of the deceased person’s assets and the terms of their will are made public.

Having an estate plan is necessary if you or your senior loved one wishes to have a say in what happens at the end of life and with assets after death. Consulting and planning with an elder law attorney will help to ensure that all options are explored and the best possible solution is utilized. The elder law attorney can walk you through all of the necessary parts of the estate plan, provide an explanation, and prepare the paperwork. Elder law attorneys will help take the guesswork out of estate planning.

If you have any questions about something you have read or would like additional information, please feel free to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

Don’t Let Your Family Feud End up in Court

Family disagreements about a parent’s end-of-life care and inheritance can get so serious they may end up in a legal filing and court case. You can take steps moving beyond the possibility this might happen and create (or amend) your estate plan seeking to diffuse these potential issues before they become legal challenges.

Every situation is unique. Everybody’s family has a different mix of personalities, degrees of wants versus needs, and problem-solving skills. The American family system is more complex than ever, with a 2021 divorce rate hovering around 50 percent, divorces, remarriages, committed long-term partner relationships, biological children, stepchildren, and physical decentralization from other family members.

Fights occur in families that are rich and poor. It turns out the dollar amount is often irrelevant. Problems stem from mismatched expectations, including but not limited to:

Sibling rivalry – Tensions between siblings tend to boil over after the passing of a parent. This situation can be especially true when inheritable assets go to step-siblings. Grief often triggers reflection, and memories of clashes and disagreements never settled tend to present themselves in real-time. The settlement of your estate can become the battleground to settle the score of a long-time feud. Avoid the situation by appointing a professional fiduciary as your trustee. If you do not prefer this option, select a family member trustee with no stake in the rivalry to mitigate its effects.

The economic disparity among beneficiaries – Socio-economic imbalances of estate heirs can destabilize the entire process. A wealthier heir may afford to hold an inheritable asset, while less economically stable heirs may want to sell for immediate financial gain. The problem seems to become compounded by the number of inheritors. You can avoid these disputes by leaving specific instructions as to the preservation or sale of real property. You may opt for “cash-out” provisions that will pay the less financially stable heirs the value of their stake in the real property and allow the more financially stable heir to retain full ownership.

Co-trustees – Even family members with great relationships and the best of intentions can clash as to the administration of your estate. All it takes is two inheritors and one grandfather clock. Executors must move quickly and decisively to administer an estate because all inheritors are waiting for their share of the payout. Avoid this problem and name only one to administer your estate.

Beneficiary dependency or mental illness – Irrational behavior that becomes part of an already sensitive situation, like your death and the settlement of your estate, will slow progress and create ill will. Any history of psychological instability or substance abuse threatens to derail an orderly process. To avoid situations with chemical dependency, create contingencies for that heir to test clean for a specific time or establish a discretionary trust where a competent trustee handles access to assets on behalf of the addicted individual. In the case of mental illness, establish a special needs trust or build specific provisions into your base trust. This protection permits the beneficiary to qualify for government assistance and still receive trust disbursements.

Undue influence – End-of-life care for a parent usually falls to one person (often a sibling) handling most of the caretaking. The uneven workload and intimate daily contact can leave the caretaker believing they are entitled to more and coerce the parent to change documents to the caretaker’s benefit. Undue influence is more often than not a product of the other offsprings’ apathy. Prevention includes paying close attention to the increasing susceptibility of an aging parent and using digital means, audio-video cameras, digital monitors that track change in blood pressure et al., to identify parent stress and prevent caregiver coercion for personal gain.

Late marriage – Love knows no bounds. Late in life, marriages happen, and you can expect resentment of your new spouse by existing heirs, particularly in a blended family with children who are primarily, or only, on the settlor’s side. Divorces, remarriage, and deaths make updating your estate planning documents a must. Upon remarrying, it is essential to place assets in your trust or modify your existing trust and Will to clarify the division of assets.

Advance benefits to one heir and not others – If one of your children needs financial assistance now or another is starting a fledgling business, yet another might require a down payment for a first home or bailout money from suffocating college debt, you may opt to provide financial help. These scenarios are common but can strain relations during probate among heirs not receiving the same benefit. Avoid this situation by noting in your trust language which heir received an advancement to their inheritance and how to deduct that previously received amount from your estate assets. If you do not, some inheritors may receive a double payout, ruffling the feathers of other heirs.

Estrangement or disinheritance – Children and other potential heirs left out of inheritance typically have nothing to lose by challenging their exclusion. This situation becomes worse in the case of blended families and their complexities, particularly if the sidelined heir pairs the challenge with a secondary claim like undue influence. You can avoid this by keeping your trust updated. A more recent trust will include a more modern disinheritance clause covering changes in this area of law. Make sure you understand the specific language in your trust regarding disinheritance.

A carefully crafted estate plan that accounts for your heirs and potential relationship problems is the first step to reducing a legal challenge stemming from a family feud. An elder law estate planning attorney knows the problems that may crop up among family members and can address these issues using the appropriate legal entities with clear and specific language. Reducing the possibility of a legal challenge to your estate brings peace of mind to you and your future heirs. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

Why Estate Planning Is Important to Younger Adults

Most young adults don’t consider estate planning a priority. Young adults in their twenties and thirties often think they don’t own enough to constitute an estate. However, an estate is the total of all you own – money, investments, real estate, vehicles, business interests, digital assets (including cryptocurrency), and other personal belongings. No matter how much or minor, you own your possessions need to go somewhere after you die. You may not think you will die young, but if the coronavirus pandemic has taught us anything, it is that life is uncertain. It is a myth that estate planning is just for the rich and the old.

What legal documents constitute an estate plan?

Some documents may vary depending on your wealth or financial structure; however, everyone should have a will. At the time of your death, everything you own becomes your estate. Your estate will go through a probate process where the court will determine what happens to you everything you own that doesn’t have a co-owner or beneficiary. Because the probate court will inventory your assets and notify and pay creditors, your will is a public record. If you have a will, the probate court will use it as a guide. In the absence of a will (dying intestate), the court will use state intestacy laws to determine who inherits your assets.

What does a will establish in an estate plan?

A will designates two critical things. The first is the naming of your executor. An executor is responsible for carrying out the instructions in your will, making payments on any outstanding debts, distributing assets to named heirs, and filing your final taxes. Second, if you have dependents, your will names the guardian and backup guardian to provide care for them. The naming of an executor and guardian for a dependent can only happen in a will.

The value of establishing an advance healthcare directive for young adults

All young adults should have an advance healthcare directive, also known as a medical directive or living will, which includes a durable healthcare power of attorney. These legal documents specify your healthcare wishes if you are permanently incapacitated or for end-of-life healthcare and designate who will make those decisions on your behalf according to your instructions. In addition, it is imperative to include a HIPAA privacy authorization form for your durable healthcare power of attorney or trustee. The form permits medical and healthcare professionals to disclose pertinent health information and medical records to your healthcare proxy.

While it may be uncomfortable to contemplate being unable to make decisions for yourself as a young adult, accidental injuries, heart disease, cancer, and strokes, to name a few, are becoming all too prevalent in young American adults. Making plans while you are competent and able is a prudent course of action and can bring you a sense of calm, knowing you have confronted the possibility and have a plan in place.

The value of a revocable living trust for young adults

Some young adults will have enough assets, real estate, or business interests to make a revocable living trust worthwhile. This trust type avoids the probate process, ensuring privacy. There is no limit to the number of times you can amend a living trust. You may change asset distribution or add assets as you acquire more throughout your life. An estate planning attorney can help you determine if your financial situation and age warrant the setting up of this type of trust.

You probably have more assets than you realize. To assess your situation, inventory all of your belongings which typically includes but is not limited to:

  • All bank accounts in your name and their approximate balances
  • All investments you own
  • Any property or real estate you own
  • Any retirement plans you have, including pensions
  • Any insurance policies you carry
  • Any retirement plans, including pensions, you own
  • Businesses you own, whether in part or whole
  • Valuable personal property such as your grandmother’s wedding ring, a collection of trading cards, or a grandfather clock
  • Digital assets such as cryptocurrency, income-generating online storefronts, influencer accounts, or income-producing subscription accounts like TwitchTV
  • Include all email accounts, login URL’s including user names and passwords where you receive critical communications
  • All outstanding debts

Once you realize the scope of your belongings and assets, you can begin formulating your estate plan. First, consider who you want to receive your possessions and think about secondary beneficiaries, especially over time, as early estate planning requires frequent reviews and updates in the event of deaths, marriage, divorce, or the birth of a child.

Once you have an inventory and have begun thinking about who should handle things upon your passing and who you want as beneficiaries, it’s time to sit down with an estate planning attorney. Working with an estate planning attorney is easier than ever now, as COVID-19 increases the use of video and smartphone conferencing that streamlines legal planning. Estate planning attorneys like us can create a plan that best suits your situation, even if you aren’t sure what to do. Proper legal documents can save your loved ones from an expensive probate trial should someone contest your will. Even as a young adult, it is best to start planning now, even if it is just with some primary documents.

We would be happy to discuss your needs in a confidential setting that you are comfortable with – by video, over the phone, or in person. Please contact our Reno office by calling us at (775) 853-5700.

Elder Law, Estate Planning

Estate Planning for the LGBTQIA+ Community

To protect our loved ones and our assets, estate planning is important to any individual regardless of orientation. In the LGBTQIA+ community, estate planning can legally protect against discrimination even if others are reluctant to recognize your relationship and your desire to permit your partner to make decisions for your care should you become unable to. Estate planning can also create mechanisms that financially provide for your partner as well.

How Obergefell v. Hodges Impacted Same-Sex Couples

In 2015 the case of Obergefell v. Hodges made it a fundamental constitutional right to marry, including same-sex couples. The US Supreme Court’s decision to recognize same-sex marriages opens up many previously unavailable legal tools and tax savings that had only been available to “traditional” legally recognized marriages. The Supreme Court ruling further stated that a valid same-sex marriage in one state must be recognized in all states. Note that non-marriage alternatives will not result in the federal government’s recognition of the relationship.

These alternatives include adults in domestic partnerships and civil unions, which are federally not legally recognized as marriage. However, these couples can still receive partnership decision-making privileges and benefits. To do so requires a different type of planning. However, your partnership is characterized, creating a legal framework to protect yourself and your partner is possible.

A married same-sex couple with proper estate planning will receive all state and federal benefits of marriage. Federal benefits include the unlimited marital deduction for federal estate and gift taxes. An unmarried same-sex couple who cannot receive these marital tax benefits can still ensure their partner will receive the legal right to inherit each other’s assets with other legal mechanisms. They will also be able to make health care decisions for one another; however, the legal framework will differ from the legally married couple.

Revocable Living Trust for the LGBTQIA+ Community

In either marriage or a cohabitation arrangement, a revocable living trust permits the couple to nominate each other as trustees, allowing the spouse or partner to manage their loved one’s financial affairs if they become incapacitated. A durable financial power of attorney is another solution to manage the affairs of a loved one if they become incapacitated. The rules and requirements of a durable financial power of attorney vary from state to state, so it is necessary to review and reconfigure this document if you relocate.  In either an LGBTQIA+ marital or cohabitation living arrangement, a health care power of attorney allows you to appoint your partner to make health care decisions on your behalf should the need arise.

Advance Healthcare Directive for the LGBTQIA+ Community

It is imperative to include a HIPAA privacy authorization form for your health care power of attorney or trustee. The form permits medical and healthcare professionals to disclose pertinent health information and medical records to a partner. A durable health care power of attorney can prevent biological family attempts to interfere with a spouse or partner’s ability to make medical decisions for their loved one.  A legally binding durable health care power of attorney can prevent family interference, no matter how well-intentioned it might be.

The Importance of a Will for the  LGBTQIA+ Community with Minor Children

Should a same-sex couple have children, where at least one parent is non-biological, a will is a legal tool to address guardianship of minor children. Your will is the only place to define guardianship of children and name an executor. Many custody battles over LGBTQIA+ parents’ non-biological children occur among families after the biological parent’s death or incapacity.

It is essential to address any previous LGBTQIA+ committed relationship structures before finalizing your estate plan to tie up any loose ends. If you were in a legal union before marriage was an option, you are subject to the patchwork of prior state laws that can have unintended consequences for new estate planning. Before 2015 some same-sex couples married in states that recognized their marriage only to move to states that did not. Believing that their nuptials were non-binding in the states that did not recognize same-sex marriage, these couples may have split up without ever legally dissolving their marriage. Some states even automatically converted registered civil unions or domestic partnerships into legal marriages. The fallout is there are now LGBTQIA+ people who are married and unaware that they are open to the possibility of future claims against their estate from a previous marriage. All previous domestic partnerships, civil unions, or other legal arrangements must be untangled and resolved to protect against these possibilities.

In general, studies find that the LGBTQIA+ community tends to lag behind others in having a will and revocable living trust. These documents are significant for non-married LGBTQ+ people in a seriously committed relationship. State laws will default to granting rights to biological family members absent legal documents to the contrary.

Specific issues unique to the LGBTQIA+ community can potentially make planning more complex. We would be happy to meet with you to discuss how you can properly document your wishes regarding the inheritance of your property, who can make decisions for you if you’re unable to, and who would care for your children should the need arise.  If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

How Does Estate Planning Work?

The law describes estate planning as a legal document summarizing the property a person owns and how to distribute these assets when deceased. Property ownership includes individual as well as jointly owned bank accounts, stocks and bonds, retirement accounts, real estate, jewelry, vehicles, your online digital footprint, and even pets. Short of being utterly destitute, you have an estate, and planning for it helps to protect yourself, your family, and your loved ones.

According to Caring.com, fewer Americans than ever are engaging in estate planning. The number of adults who have a will or other types of estate planning documents has fallen nearly 25 percent since 2017. Astonishingly, the demographic of older and middle-aged adults are less likely to have wills and estate plan documents at roughly the same 25 percent rate. Additionally, a growing number of Americans lack the resources and knowledge as to how to get a will. Overall, the prevalence of estate planning documents since 2017 has shown a decrease of almost 25 percent.

In their annual survey, Caring.com posed the question to its participants as to why they have put off having estate planning documents, and increasingly people cite a lack of education or the perceived cost of estate planning as the most significant reason. Yet 60 percent of the same respondents think planning their estate is either somewhat or very important. Data shows that as a person’s income increases, their likelihood of having estate planning documents like a will, living trust, or advanced health care directives also increases. Still, the number of people with said documents continues to decrease, even in higher-income groups.

In 2020, study participants in the highest income group show a decrease of 26 percent regarding estate planning documents. Even those Americans with the resources to create a will feel it is something they can put off until later in life, which has disastrous consequences for their loved ones in the case of unexpected death.

caring.com

Estate planning is the process of outlining specific instructions as to how you want your money, and other property dispersed upon your death. It includes decisions about your medical care and final arrangements as well. Wills, trusts, and advanced medical directives are the three primary estate planning documents you need to understand and put into place as soon as possible.

A will instructs how to divide up assets, debt, personal property, and more. A will can cover all of your estate planning needs, however; it does come with a few limitations. First, a court process called probate must be started upon death. During this sometimes lengthy process, a judge oversees the transfer of ownership of your property according to your will. Once a probate is opened, the will becomes public knowledge, as well as the property that the deceased owns. For those who wish to avoid court or who wish to keep their affairs private, a living trust may be the best option.

A living trust takes effect at the moment it is enacted while your will only become effective upon your death. Planning with a living trust can more expensive, but it provides the advantage of avoiding probate court and keeps all of your information (and your beneficiaries’ information) private. Further, a living trust can provide for the management of your assets should you become disabled.

An advanced health care directive, like a living trust, is designed to take effect during your lifetime. This directive stipulates your end of life wishes as well as what should happen if you become incapacitated and unable to make decisions about your medical care.  

A durable power of attorney covers who will make financial decisions for you if you are unable to. You can specify more than one agent, and you can be very specific about what that agent can do on your behalf, including management of online accounts.

If you are ready to discuss your planning needs, we would be honored to help. If you have an existing plan, we would be happy to review that plan to make sure it still works for you given your current health and financial circumstances. We look forward to hearing from you! Please contact our Reno office by calling us at (775) 853-5700.

Elder Law, Estate Planning

The Probate Process Explained

The probate process involves authenticating the deceased individual’s will, assessing the assets, settling debts and taxes, and overseeing the allocation of the inheritance. After an asset-holder dies, the court will appoint a valid will’s executor to administer the probate process. In the absence of a will, the court will appoint a state administrator to handle probate. Probate law varies by state, but there are steps in the process that are common.

First, an executor is appointed and is normally the person named in the will. It is the executor’s responsibility to initiate the probate process. An executor can be a family member, a financial advisor, or any person the testator deemed capable of administering their estate. The executor files the will with the probate court, which initiates the probate process. A court officially appoints the executor as named in the will, giving the executor legal authority to act on the testator’s behalf.

The executor’s function is to locate and oversee all of the estate’s assets and to determine each asset’s value. The majority of the deceased’s assets are subject to the probate court, where the deceased lived at the time of their death. Real estate is an exception, and probate may extend to any county where the real estate is located.

The executor will pay any taxes and debts owed by the deceased from the estate. A notice of death is published, and creditors are given a limited time to make claims against the estate for any money owed to them. If the executor rejects the claim, the creditor may take them to court, where a probate judge will determine the debt’s validity. The executor is responsible for filing the deceased’s final, personal income tax returns. The executor’s last task, via court authorization, is to distribute what remains of the estate to the beneficiaries.

Probate is required for any asset or account that does not have a joint owner or beneficiary named.  If a joint owner or beneficiary is named, then title changes automatically and probate becomes unnecessary.

If a person dies without a will, they are said to have died intestate. An estate can also be deemed instate if the will presented to the court is found to be invalid. The decedent’s assets of an intestate estate follow a similar probate process, beginning with the appointment of an administrator. An administrator functions like an executor, receiving all legal claims against the estate, paying outstanding debts, and the decedent’s taxes.

Administrators must also seek out legal heirs, including surviving spouses, parents, and children. The probate court will determine the distribution of the estate among its legal heirs. In the absence of any family or other heirs, remaining assets go to the state.

The more complex or contested an estate is, the longer the probate process can take to finalize. The longer the process, the higher the cost. Probate without a will typically costs more than probate with a valid will, but neither scenario is inexpensive. Probate court files an estate’s assets as a matter of public record, so if you want to keep your estate private, it is best to pursue other estate planning options such as a trust. 

As estate planning attorneys, we can help you determine what planning tools are best for you. Contact us to schedule time for a private conversation to further determine how we can help. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

The Functions of a Will

The legally binding directive declaring who will receive your assets upon death is called a will, and a will is a significant element of a complete estate plan. If you die without one (intestate), the state will distribute your assets and property via state law and quite possibly at odds with your wishes.  Having a will allows you to appoint a legal representative or executor to carry out your bequests and name a guardian for your children. There is no doubting the importance of having a will, however, there are some limitations you should be aware of.

Although a will can be the primary mechanism to transfer property on death, it does not cover all property situations. Some classes of property you are unable to distribute through a will are:

  • Property held in trust – A trust will have named beneficiaries who will receive the trust’s property according to the trust terms and not based on what is in your will (unless specifically stated in the trust).
  • Pay on death accounts – Informally known as PODs, the original account owner names a beneficiary(s) to whom the assets in the account pass automatically upon the owner’s death.
  • Life Insurance – Life insurance benefits pass to your named beneficiary(s) in the life insurance policy and are not affected by your will.
  • Jointly held property – Co-owned property is not distributed through your will. Joint tenants have an equal ownership interest in the property, and when one joint tenant dies, their interest ceases to exist. The other joint tenant now fully owns the entire property.
  • Retirement plans – In a similar manner to life insurance, money in an IRA or 401(k) passes to the named beneficiary(s). According to federal law, a surviving spouse is generally the automatic beneficiary of a 401(k); however, there are some exceptions. An IRA permits you to name a beneficiary(s).
  • Investments in transfer on death accounts – Some accounts holding stocks and bonds will transfer on death to the named beneficiary(s). Like POD accounts, transfer on death accounts bypass probate and go directly to the beneficiary(s).

A will does not allow you to avoid probate. By necessity, a will must go through the probate process in order to allow beneficiaries to inherit property. It can take months to get through probate, and it involves expenses like an attorney, executor, and court fees. Also, your will and everything associated with it (property you own, who your beneficiaries are, etc.) become part of the public record that anyone can access.

Keep funeral instructions outside of your will. The reality is your funeral may have already taken place before someone finds and reads your will, which can take days, even weeks. If your funeral or memorial service is important to you, the best way to help your family is to pre-plan, making arrangements with a funeral home. You can leave written instructions with the family as to your plans.

Your pets cannot inherit through your will. An animal is legally unable to inherit money or property from you. If you want your pets to be cared for after you die, leave money to a person willing to take care of your animals. The person you select can inherit your pets since a pet is considered property. You can also set up a pet trust or a pet protection agreement, either of which provides for your pet’s care.

Provisions for a child on government benefits are best in a trust. It is best to create a special needs trust to provide for a child with special needs or a child who is receiving government benefits. The trust can hold money for your child’s care without affecting those benefits.

There are ways to circumvent the limitations of a will by creating trusts, setting up pay-on-death accounts, and ensuring a beneficiary is named on all accounts that permit them. Your will is an important component of a comprehensive estate plan, but it can’t do everything.

We would be happy to discuss the pros and cons of having a will and other options available to you as part of your overall estate plan. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

How Do You Contest a Will?

An executor oversees the settling of the estate according to the will after your death, laying out who the inheritors are and what property needs to be divided. For many reasons, beneficiaries can feel slighted by what they did or didn’t receive, and some individuals are entirely excluded from inheriting anything at all. The legal process of challenging the validity of a will is called a will contest (or “contesting the will”).

Once probate is underway, the named executor will take the necessary steps to complete probate and notify beneficiaries named in the will. This legal notice typically limits the time when a beneficiary can contest the validity of the will. Generally, a beneficiary (and even a person not named in the will) has thirty to ninety days to bring legal action against the decedent’s will.

Know that the vast majority of wills pass through probate without issue. The courts rightly view the will like the author’s (testator), last voice. Because the testator can no longer speak to their wishes, the courts try to adhere to the legally filed will stringently. Because of the narrow timeline for filing a will contest and the odds stacked against winning the legal challenge, most challengers will find it a fruitless and costly endeavor.

Under what circumstances then would you want to contest a will? Legally, only a person or entity with “standing” can contest a will. Standing is when the party involved in the will contest will be personally affected by the case’s outcome. Most often, this means an heir or beneficiary already named in the decedent’s last will or any preceding will. It may also include any person (usually a spouse or child) not named in the will, but because of state intestacy laws would be eligible to inherit in the absence of a will. Typically, four grounds are viable for contesting a will:

  • The will’s signing lacked the proper legal formalities
  • The mental capacity of the decedent to make a will is in question
  • Someone leveraging undue influence over the decedent into making or changing a will
  • The will’s procurement is fraudulent

Certain fact patterns may lead to a successful will contest. As an example, if a testator writes their own will, some legal formalities may be overlooked, rendering the will invalid. In particular, the “do it yourself” method for creating a will may not include all of the “what if” scenarios making the will incomplete. In another example, if the testator is experiencing isolation from family and friends, the primary beneficiary’s influence and motives regarding the estate may come into question. If the executor is trying to enforce an outdated will, the newer one should supersede the older one as long as no coercion was involved in writing the most recent version. Finally, some medical evidence may suggest the testator lacked the requisite mental ability to make a will. Occasionally the challenger to an existing will can negotiate a settlement with the estate instead of enduring a court proceeding.

Some wills include a no-contest clause, also called an “in terrorem” clause. This provision states that if anyone files a lawsuit challenging the will’s validity, they will receive nothing from the estate. While this may a powerful deterrent, it may not be allowed in the state where the will is probated.

To protect your will from being contested, even if you have limited assets, your best strategy is to have your will professionally drafted by an attorney well versed in estate planning. Using an attorney can help protect you and your estate from future legal challenges while helping you think through who you want to inherit your money and property, and how each person should receive what they inherit.

If you would like to discuss whether a will is appropriate for you or whether you should update an existing will, we would be happy to speak to you at your convenience. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

The Importance of Keeping Your Estate Plan Current

You should check your estate planning documents every so often, to make sure they’re still good, especially with big life changes like births, marriages, divorces, and moving to another state. Children grow up, marriages dissolve, property gets sold, residences change. That’s why we recommend that you consult us for an estate-plan check-up every five years or so.

What Happens If You Retire in Another State?

If you retire to another state, your will would probably be good, but powers of attorney vary from state to state. Documents from the “old” state might not work in the “new” one, and your documents would not be there for you when you need them.

How Does a Spouse or Ex-spouse Effect My Estate Plan?

Suppose you willed your property to your spouse and appointed that person to be your power of attorney. You got divorced, but you never got around to changing your plan. The law would usually step in to prevent your ex-spouse from inheriting, but you might be stuck with that person holding power of attorney over your property and health care.

Maybe you named your ex-spouse’s father as your executor and agent. Now he can’t stand you and blames you for the break-up.

How Do I Divide my Assets Equally to my Children?

Perhaps you willed your property to your two children equally – but now one child is addicted to opioids. Your will did not restrict how money should be spent. If your addicted child inherits a lot of money in one chunk, that money could vanish to drugs and your child’s survival might be at risk.

Or, you deeded your house to one child and made a will leaving money to your other child. Then you forgot about the deed and made another will, years later. That will split everything equally. The law would invalidate the second will as to the house, because deeds supplant wills. Consequently, one child might end up receiving more value than the other. That unfairness might sour the children against each other forever.

If you got divorced, sold property, moved to another state, or did your documents more than five years ago, come see us for an estate plan check-up.

When it comes to estate planning, “once is not done.” Please contact our Reno office by calling us at (775) 853-5700 to learn more about your estate planning options.