Estate Planning: Wills, Trusts & More
With so many misconceptions about estate planning it is no wonder why most individuals delay or do not have a sufficient estate plan.
In its most basic terms estate planning is how your affairs and property will be managed and distributed in the event you are not able to, either because of your death or incapacity. No one wants to think about their mortality. If you do not create your own estate plan the State will create one for you.
You do not want to leave your loved ones in a position of grieving and fighting over property with one another. Nor do you want to leave the care of your minor children up to the state courts if something were to happen to you!
Our estate plans are created by focusing on the people, not property. That means our clients' goals are always at the forefront of every estate plan. No two estate plans should be alike, because no two clients are exactly alike.
At Stovall & Associates we draft many types of estate-planning document, from the basic to the complex, including wills, revocable living trusts, irrevocable trusts, educational trusts, spousal trusts, and special needs trusts.
We fund the trusts and do all the drafting of documents. We also assist clients with estate and trust administration issues.
What is a Trust and Do I need one?
Trusts are a legal construct that allows you to create a separate legal entity to hold your assets in order to avoid probate and accomplish tax, asset protection and other financial goals.
When a valid trust is created, assets are taken out of an individual's name, and held in the trust's name instead. A trustee is named, who is usually the person who creates the trust (while that person is still alive) who manages the assets for the benefit of beneficiaries.
Revocable living trusts are the most common type of trust due to its flexibility and how easy it is to create and fund. A revocable living trust is created and funded during a lifetime. Revocable living trust can be updated and changed very easily and are good for a lifetime even if your wishes and state of residence changes!
A testamentary trust is created after your death by a provision in your will. These types of trusts are also very common in estate planning. The type of trust used is dependent on your specific goals and circumstances.
- Trusts accomplish a tremendous amount of legal, tax, personal, family, asset protection, and other goals such as:
- Provide care, funding, and direction for YOU and YOUR LOVED ONES, in the event of sickness and disability.
- Bridge the gap between life and death by continuing to care for your family after your death.
- Protect assets from creditors malpractice claimants, and divorce actions
- Can manage businesses, real estate, or other assets
Last Will & Testament
A last will & testament is a written document that states where you would like your assets to go when you die, who you wish to be the guardians for your minor children and how you would like any other affairs you want handled at your death. The last will names an executor to facilitate the management of your will during the probate process.
A last will & testament must go through the public probate process for the executor to have authority to act, and for assets that do no pass by operation of law to pass to heirs.
What Both Wills & Trusts Can Do:
- Allow revisions to your document. Both wills and revocable trusts can be revised whenever your intentions or circumstances change so long as you have the legal capacity to execute them.
- Name beneficiaries. Both wills and trusts are vehicles which allow you to name beneficiaries for your assets.
- Wills simply describe assets and proclaim who gets what. Only assets in your individual name will be controlled by a will.
- While trusts act similarly, you must go one step further and “transfer” the property into the trust – Only assets in the name of your trust will be controlled by your trust.
- Provide asset protection. Trusts, and less commonly, wills, are crafted to include protective sub-trusts which allow your beneficiaries access but keep the assets from being seized by their creditors such as divorcing spouses, car accident litigants, bankruptcy trustee, and business failure.
Advance Health Care Directives
Advance health care directives are written instructions that tell others how you want your health care managed when you are not able to do so yourself. You appoint someone to make health care decisions for you in the event you are unable to do so yourself in a valid legal document.
Most healthcare providers will require this form if you need to make medical decisions on behalf of a loved one. In Nevada, this document usually needs to be notarized or witnesses by two disinterested parties.
Power of Attorney
A durable power of attorney allows you to appoint someone to manage your assets if you become incapacitated. You should only appoint someone you trust. This document needs to be notarized for most third parties to accept its validity.
The person you appoint can have broad powers to act for you, but should at a minimum have the following powers:
- Manage and transfer your assets
- Handle Legal Matters
- Pay taxes and deal with the IRS
Estate Planning Frequently Asked Questions
What happens if I don't have an estate plan?
The default statutory (the government's estate plan) is called “intestacy” and your assets will be distributed under Nevada State law. Alternatively, the assets can be distributed by the law of the state where any assets of the decedent are located, or where the decedent died. These statutes almost never match how you would have divided your assets yourself. Without a valid plan all decisions about your estate will have to be approved through the probate court system.
What's the difference between having a "Will" and a "Living Trust"?
A last will is a written document that states who you wish to be the guardians for your minor children and how you would like your assets distributed at your death. The last will names an executor to facilitate the management of your will during the probate process.
Trusts are a legal construct that allows you to create a separate legal entity to hold your assets. A trustee is named who manages the assets for the benefit of you and your beneficiaries. Revocable living trusts are created to avoid the public probate process. In most instances, having a trust will avoid probate, but if some assets were not funded into the trust, then a probate may be required to distribute those assets. Revocable living trusts are created and funded during your lifetime and you often name yourself as trustee to maintain control of the assets until your death or incapacity.
A Living Trust offers protection should you become incapacitated by allowing your successor trustee to manage your assets without interruption.
Even with a Living Trust you should still have a will known as a "pour-over" will. These wills make sure that any assets, which may not be in your Living Trust at the time of your death, "pour-over" into the trust.
Is a Living Trust valid in all states?
Yes, a Living Trust is valid in all fifty states, plus the District of Columbia
Isn't a Living Trust only for the rich?
No. A Living Trust can help anyone protect his or her family. Any person with an estate large enough to require probate may derive meaningful benefits from a Living Trust
What do I have to do after I create a Living Trust?
You need to make sure that you fund your trust and title appropriate assets in the name of the trust. Once a trust is created and funded, it will continue on until it is revoked or it is distributed pursuant to its terms.
We are not married; can we still have a Joint Living Trust?
You have the option to prepare a Joint Trust along with all of the matching supporting documents for a "Non-traditional Couple".