Most people are aware that a good estate plan should contain provisions to distribute assets to loved ones while avoiding probate. Have you thought about what will happen to your pets? It is important to include provisions in your estate plan to address what will happen to your pets in the event of your death. This can include who will care for your pets if something happens to you and can also include financial distributions to care for your pets. Although you cannot directly leave money to your pet, you may leave money to their caretaker. Nevada law also specifically allows for pet trusts to be established. This type of planning can give you the peace of mind that your family, including your beloved pets, will be taken care of should something should happen to you.
If you are a pet owner, call one of our attorneys at 702-433-4455 to discuss how you can make sure your pets are included in your estate plan.
The question I am often asked is "do I really need a trust?" This is usually followed by a statement along the lines of "I have named beneficiaries to receive all of my accounts and the only other asset I own is my house." The short answer is: an estate of any size can benefit from a trust. Simply put, having a trust allows you to decide who will receive your assets, when they will receive your assets, and the manner in which your assets will be distributed to them.
Most people understand that a trust is preferable to a will in that a trust avoids probate. Of course, assets titled in joint tenancy and assets having a beneficiary designation will also avoid probate. Both of these techniques will result in a property automatically passing to the surviving beneficiary without probate. If, however, your joint tenant and/or designated beneficiary should predecease you, then any such property becomes subject to probate once again unless and until you take further action with respect to the ultimate disposition of the property.
A beneficiary, pay-on-death (POD) or transfer-on-death (TOD) designation will cause the timing of the distribution to occur upon an account owner’s death. Joint tenancy is also widely used as a tool to pass property upon a person’s death. The designation of joint tenancy, however, brings with it much more than simply being a gift upon death. Adding someone as a joint tenant to your property, gives that person present access to your property up to the whole thereof. For this reason, care should be taken in setting up joint tenancy unless you intend for your joint tenant to receive current rights in your property or you trust the person implicitly to carry out your wishes with respect to the disposition of such property both during your life and upon your death.
Assuming your joint tenant and/or named beneficiary survives you, the whole of the subject property will pass to such person upon your death. In other words, these probate avoidance techniques do not allow you to direct the timing or the manner of the distribution. For example, you cannot provide that the property be paid out to them over time or upon attaining certain ages, etc. In addition, should your joint tenant and/or designated beneficiary be a minor, he or she is unable to receive the property until someone takes steps to have a formal guardian of such minor appointed through the court.
If real property is indeed the only asset that is left for you to make provisions for upon your death, Nevada law allows for the execution and recordation of a deed upon death. While this may seem like a quick and easy solution to provide for the disposition of real property, it also carries with it certain drawbacks. The way the law is currently written, creditors reserve the right to assert claims against the property for 18 months following death. Consequently, a beneficiary of a deed upon death is realistically precluded from transferring or selling the property for a minimum of 18 months since title companies have been reluctant to insure title until after the creditor period has fully run.
While one or more probate avoidance techniques may be useful for certain assets in specific instances, there is simply no other estate planning technique that affords the same level of flexibility as a trust. A trust lets you determine the exact moment of when the desired gift will be made to the intended recipient. It allows you to give property outright or to maintain property in trust to be gifted out over time as you may direct. In the case where a beneficiary should predecease you, the trust can provide for any number of successive beneficiaries. It provides for orderly administration and distribution under the care of the person you appoint to act as your trustee. In short, a trust provides a canvas for you to design a plan to accomplish all of your estate planning objectives without the unintended consequences and/or pitfalls associated with other planning techniques. Thus, there is no real substitute for setting up a trust.
According to the U.S. Census Bureau, blended families now outnumber traditional families. Blended families come in all shapes and sizes, where at least one spouse has at least one child from a prior marriage or relationship. Due to the variety of situations and dynamics of each unique blended family, a cookie-cutter estate plan will not suffice to accomplish each individual family’s goals. It is important to discuss your family situation with an estate planning professional who can personalize a plan for you and your family which will enable you to meet your family’s needs and address any concerns you may have. For blended families, below are several items to consider as you and your loved ones plan for the future and preserve your legacy.
Questions you may ask yourself when creating a new estate plan for your blended family may include:
In creating your new estate plan, it is important to evaluate your goals and priorities regarding how (and to whom) you want to distribute your assets after you are gone. An individual may leave their assets however and to whomever they please. In our experience, clients typically want to provide for their children and spouse. Providing for both in a blended family setting however can be complicated.
Our experience is that in many cases a surviving spouse of a blended family ends up re-designing or amending the estate plan for only his or her children’s benefit. The only way to get around that is to leave assets in trust.
In addition to deciding how and to whom you would like to gift your estate, it is necessary to decide who would be best to serve as your trustee, executor, agent, etc. If your children and spouse get along, nominating a child and the spouse to serve together in these capacities may be a good option. However, if you think tensions will arise, nominating an independent third party (an impartial corporation, professional, or non-family member friend), will eliminate any potential friction caused by naming one or the other member of your family as trustee, agent or executor.
For blended families it is essential to create a comprehensive and integrated estate plan where trusts, powers of attorney, last wills and testaments, life insurance beneficiary designations, and retirement plan beneficiary designations all align so that your wishes will be followed when you are gone.
We strongly suggest that you plan ahead in some fashion so that when these documents speak for you when you can no longer speak for yourself, your wishes are carried out and all of your loved ones are provided for in an orderly fashion. If you wish to discuss your priorities and goals in creating an estate plan for your family, please call us for a free 30 minute in office consultation.
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