We often get asked whether having a Will is sufficient to avoid probate in Nevada. The question is usually asked by children of a deceased parent who are facing the time-consuming and expensive probate process because proper estate planning did not take place during the parent’s lifetime. The answer, in short, is that in Nevada having a Will is not enough to keep a person out of probate court at their death.
A Will is a legal instrument that determines how assets are to be divided at a person’s death. Wills are an effective way to accomplish this goal. However, if a person only uses a Will, a probate will be required for the distribution of those assets that do not automatically transfer to another person, such as with real property. With only a Will, children and other beneficiaries can be stuck with a time-consuming, expensive, and public probate.
In Nevada, if the deceased person’s assets exceed $25,000, or if there is real property involved, probate is normally required. If the value of the estate does not exceed $100,000, a petition can be filed in court, requesting that the estate be “set aside.” This means that the estate's distributions can be made without the court intervening. If the property values between $100,000 and $300,000, the estate can go through probate by way of a “Summary Administration.” If the value of the property exceeds $300,000, it must go through full probate, or “General Administration.”
There are several effective estate planning techniques that can be implemented to completely avoid probate. For example, a person can create a revocable trust. This estate planning tool allows a person to not only avoid probate and designate beneficiaries of their choice, but it also helps protect a person in the case of incapacity prior to their death. One can also try to avoid probate by making arrangements for the automatic transfer of assets, such as by naming designated beneficiaries on bank and other investment accounts.
Each method of avoiding probate has advantages and disadvantages. It is important to speak with an estate planning attorney before making any decisions to make certain your planning is done correctly, and your goals are successfully met.
We all would like to pass a little on to our children, loved ones, or perhaps to an organization that is important to us. You worked hard to build your legacy. The last thing anyone wants is to give a large percentage of their estate to pay probate fees.
Even if you are not a celebrity or self-made millionaire, failing to plan properly will leave a huge mess for your family.
Some ways to make sure that your family is not scrambling to find assets upon your passing or spending thousands of dollars in court and attorney fees to transfer those assets to your beneficiaries are:
1. Make sure you at least have a simple Will.
The Will tells a court who you would like your Executor to be, or person that you would like to manage and oversee the probate process. If you fail to nominate someone, the court will nominate someone for you. A Will also directs the court to distribute assets to your named beneficiaries in accordance with the terms you lay out. If you do not have a Will, the state substitutes its own estate plan for yours by distributing your assets according to the state’s intestacy statutes – which may inadvertently disinherit those who you actually wanted to leave your assets to.
2. Determine if a Living Trust is good for you.
Living Trusts enable you to bypass the court probate process entirely. They enable for a smooth transition of assets from you to your beneficiaries after you are gone. Another benefit of the Living Trust is that it can provide for means to take care of you if you are ever incapacitated.
3. Title your Assets Properly.
If you have a Living Trust, it is important to “fund” the Trust with your assets. This means that you must transfer title of bank accounts, investment accounts, real property and vehicles into the name of the Trust. Otherwise, your family will have to probate the assets left in your individual name. Life Insurance and Retirement Plans should have updated beneficiary designations, which can include your Trust.
4. Keep an Updated Asset Inventory.
One of the most difficult parts of distributing a person’s assets after they are gone is figuring out exactly what that person owned before they passed away. Keeping an updated asset inventory will enable your family to effectively take over without having to scramble to figure out if or where you held investment accounts, stock, real property, etc.
While it may seem counter-intuitive, investing in setting up an estate plan now with an experienced estate planning attorney will save your estate (and your family) money in the long run. So to prevent a mess for your family, even if you are not a celebrity or self-made millionaire, take the time now to meet with an estate planning attorney and determine the best estate plan for you.
One of the common fears of clients when doing their estate planning is that the terms of their last will and testament and/or their revocable trust will not be followed after their death.
In this regard, there are a limited number of legal theories to challenge the validity of a will or trust of a decedent.
The two most common legal theories are: (1) the decedent lacked the necessary legal capacity at the time the will (testamentary capacity) or trust (contractual capacity) was created, and (2) the decedent was unduly influenced by someone at the time the will or trust was created.
When a will or trust is so challenged, one of the main problems is that the person who made the will or created the trust is now deceased. The maker of the will or trust is no longer available to confirm that these are their intentions, that they have the necessary legal capacity, that they are not being unduly influenced, and if necessary explain to the court or jury the reasons for the terms of their will and trust such as why a child is disinherited. This unavailability of the maker of the will or trust may lead to speculation on the part of the judge or jurors, and the substitution of their judgment of what they believe the will or trust should provide such as a child should not be disinherited. At least as to wills, there is now a solution to this problem in Nevada.
For many years under Nevada law, the maker of a will, trust or other writing constituting a testamentary instrument could have a court determine any question of validity arising under the instrument and issue a declaration of rights. In other words, a Nevada court could issue a declaratory judgment as to the validity of a will or trust. Specifically, the law is Nevada Revised Statute 30.40(2). However, until recently this statute has been construed to mean that such a determination and declaratory judgment of the validity of a testamentary instrument by a court could not take place until after the death of the maker. This has now changed as to wills. The 2015 Nevada legislature passed a law that states if a declaratory judgment is entered under Nevada Revised Statute 30.40(2) during the lifetime of a decedent declaring a document to be the valid will of the decedent, the validity of that will is not subject to challenge after the death of the decedent. Of important note is this does not prevent the person from later revoking the will or making a new will during their lifetime.
However, of particular concern is that the Legislature did not include trusts in the new law. This is most unfortunate in that revocable trusts are the primary estate planning tool in this day and age as opposed to wills. One saving grace may be that in most instances the will is executed the same day as the trust. Accordingly, a determination by the court during the lifetime of the maker that a will is valid should at least indirectly assist in later establishing the validity of a trust that was signed on the same day as the will was signed by the now deceased maker. A potential problem is that a trust may be amended or restated after the date the will is signed. Hopefully, a similar law for determining the validity of trusts during the lifetime of the trustor will be enacted in the next session of the Nevada Legislature.
At the law offices of JEFFREY BURR, we help clients with their estate planning. But having the plan, a Will or Trust, is only part of the process. I found an interesting graphic on social media and I thought I would plagiarize the idea. The graphic discussed preparation of a “death dossier” – the files and documents that are helpful to gather in planning for your death. I thought of a few other names for this as listed in the title.
Here’s a summary of the documents or categories of documents that are helpful to gather and keep with or nearby your estate planning paperwork:
Taking care of these details can really help streamline the administration of your estate. Call us today at 702.433.4455.
This past year our probate department reviewed numerous Wills that were not executed or signed properly. In some cases, through affidavits from the subscribing witnesses, we were able to correct some of these errors and admit the Wills to probate. Unfortunately, in other cases, the problems were not able to be fixed. Most of these errors were from Wills that were not prepared by an attorney. Once a person is deceased, errors in the execution of a Will cannot always be corrected. This can result in complete devastation, with assets being distributed to persons that were not intended by the decedent.
The Nevada requirements for the execution of a Will are set forth in the Nevada Revised Statutes Chapter 133. These requirements must be followed with exactness. One missing word can be the difference between a valid Will and an invalid Will. The requirements are not difficult; however, to someone who is not an attorney, the requirements are easy to miss. We have found that there are many incorrect Will forms floating around on the internet and are not worth the paper they are written on.
If you have questions regarding the validly of your Will, contact an attorney and they will be able to quickly tell you whether your Will is properly executed.
Oftentimes the most treasured pieces of property in an estate are those items which you do not hold formal legal title to. Unlike a car or home where ownership is evidenced by a title or deed, there are typically no such records for family heirlooms such as china dishes, jewelry, photo albums or vinyl records signed by the Beach Boys.
When the owner of these personal property items dies, the items are generally given to the beneficiaries named in the owner’s will or trust. But oftentimes the items are given by way of general provisions. For example, a will may provide that half of a person’s entire estate will go to Son and the other half will go to Daughter. In that case, half of the personal property items will go to Son and half will go to Daughter. The executor ultimately decides how to allocate the personal property items between Son and Daughter ,which may cause a rift between Son and Daughter if they do not see eye to eye on who gets what. They may ultimately decide to go to court to resolve their dispute, which costs time and money. The person creating the will or trust could specifically designate which items of personal property will go to Son and which will go to Daughter to avoid this outcome; however, this can be difficult because people collect, lose, and gift personal property items to family and friends throughout their lives. Thus, what a person owns in terms of personal property is not static. Because of this, drafting a specific provision for each personal property item in a will or trust would likely be inefficient, as the document would need to be continually updated to reflect a current inventory and disposition of that inventory.
Fortunately, Nevada law does not require this kind of drafting and instead offers an alternative, which allows a will or trust to reference another document known as a "List Disposing of Tangible Personal Property". This list is legally binding and can govern the disposition of personal property items.
To be legally binding, the list must contain the following:
This list may be prepared before or after a will or trust is executed and it can be altered or amended at any time.
To take advantage of this statutory provision that allows for the disposition of tangible personal property by list contact one of our attorneys and we can help you to create a comprehensive estate plan where these most treasured items will be disposed of according to your wishes, thereby reducing the potential in-fighting among your beneficiaries.
The main component of the estate plan for most people is a revocable living trust that they establish during their lifetime. The terms of the revocable living trust control the disposition of any asset titled in the name of the trust. Trust assets can include real estate, investment accounts, financial accounts, stocks and bonds, certificates of deposit, vehicles and other personal property. The revocable living trust can also be the joint owner of an asset, most commonly with an individual. When the individual dies, the revocable living trust becomes the sole owner of the asset and the asset is subject to the terms of the trust. The revocable living trust can also be the designated beneficiary of an asset such as a life insurance policy, a retirement plan and an annuity. The proceeds are payable to the trustee of the revocable living trust, and again the ultimate disposition of these proceeds are controlled by the terms of the trust. An asset can also contain a payable on death (POD) designation wherein the asset is payable to the trust upon the death of the owner. So why should one have a last will and testament if they have established and funded a revocable living trust?
Even when a person establishes a revocable living trust, unfortunately periodically one or more of the person’s assets such as a vehicle or a bank account or even real estate does not get properly re-titled into the revocable living trust for whatever reason. In this situation, when the trustor dies the vehicle or bank account or real estate is in the name of the deceased trustor alone and the disposition of the asset is controlled by the terms of the last will and testament of the decedent. Accordingly, even an estate plan that has a revocable living trust always includes a last will and testament. The will is oftentimes referred to as a “pourover will”, as it provides that any asset is “poured over” into the revocable living trust to be held in trust and disposed of pursuant to the terms and conditions of the revocable living trust.
In summary, one’s estate plan should always include a last will and testament even though the person has established a revocable living trust. Although the goal is to never have to use the last will and testament, it is a safety net, providing that an asset not properly titled in the name of the revocable living trust at the time of death shall pass to the trust to be disposed of pursuant to the terms and conditions of the revocable living trust.
When a spouse dies, it is important that the surviving spouse review his or her own estate plan and estate planning documents. In most situations, a married couple nominates his or her spouse to serve as their attorney-in-fact (agent) under their power of attorney for health care decisions and as their attorney-in-fact (agent) under their power of attorney for financial matters. Under these documents, the person nominated to make health care decisions and to handle the financial affairs for the surviving spouse is now deceased. Accordingly, it is essential that the surviving spouse review the powers of attorney to insure that there are alternate agents nominated to so serve.
Oftentimes the surviving spouse will desire to update the powers of attorney by making the alternate nominated party or parties under the existing powers of attorney now the primary nominated party or parties and adding new alternate nominated parties. This is also true for nominated successor trustees under the Trust agreement and for the nominated personal representatives under the Last Will and Testament of the surviving spouse. Again, the nominated successor trustee and the nominated personal representative is often the now deceased spouse.
Such a review is not limited to these estate planning documents. The surviving spouse should also review any insurance policies insuring the life of the surviving spouse as to designated beneficiaries. Again, the spouse, who is now deceased, is usually the designated beneficiary of the policy. The surviving spouse needs to be sure that there are alternate designated beneficiaries under the terms of the policy (a revocable trust is a good beneficiary for insurance policies). Unfortunately, if there is no living designated beneficiary at the time of the death of the surviving spouse, some policies provide that the proceeds are paid to the estate of the insured. This would in all likelihood result in the necessity of a probate of the estate of the surviving spouse, something we always try to help our clients avoid due to the costs and fees involved with a probate proceeding.
Additionally, if the surviving spouse has a retirement plan, the designated beneficiary provisions of the plan should be reviewed to make sure that there are alternate designated beneficiaries other than the deceased spouse.
A holographic will is a handwritten last will and testament written and signed by the Testator. Nevada law provides:
NRS 133.090 Holographic will.
As such, holographic wills are valid if the will is (1) signed, (2) dated and (3) the material provisions are written by the person creating the holographic will.
Even though holographic wills are valid in the state of Nevada, they are often not recommended for several reasons:
Holographic wills are valid in Nevada and can serve an important purpose if used properly. Should you have any questions regarding holographic wills in Nevada, feel free to contact our office.
Under Nevada law, a transfer of property under a Will, or any such transfer, that is the product of undue influence will be deemed void. In voiding such transfers, Nevada desires to protect alleged donors who lack the “mental vigor” to protect themselves from imposition or exploitation.
Undue influence can occur at many different levels and in many different circumstances. In fact, in some instances Nevada law presumes undue influence exists. For instance, a presumption of undue influence arises when a transfer is made to a person who is in a “fiduciary relationship” with the donor. In situations such as these, when the presumption is raised, the fiduciary-beneficiary must rebut the presumption by clear and convincing evidence.
As an aside, there are three (3) primary evidentiary burdens under the law, which can be ranked in a hierarchy from easiest to satisfy to most difficult to satisfy. Beginning with the easiest to satisfy, we have the “preponderance of the evidence” standard. Next is the “clear and convincing evidence” standard. And finally we have the “beyond a reasonable doubt” standard, which is the most difficult evidentiary burden to satisfy and is typically only applicable in criminal cases.
Thus, as noted above, when there is a fiduciary relationship between the donor and the beneficiary, the beneficiary must prove by clear and convincing evidence – a standard that is not as lax as the preponderance of the evidence standard but not as strict as the beyond a reasonable doubt standard – that the transfer was not the product of undue influence.
However, there are other situations in which undue influence can be shown. In these situations (where no fiduciary relationship exists), Nevada law was not clear as to the evidentiary burden needed to prove undue influence. This was the case until November of 2013 when the Supreme Court of Nevada issued its ruling in In re Estate of Bethuremwherein the Court held that a Will contestant must establish the existence of undue influence by a preponderance of the evidence. To satisfy this standard, a Will contestant need only show that the transfer of property under the Will was “more likely than not” the result of undue influence. The effect of this ruling is that it essentially makes it easier for Will contestants to establish undue influence, and it affords greater protection to those mentally weak donors who may be subject to imposition or exploitation.
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