Planning for Your Family | Your FutureNevada Trust & Estate Planning Frequently Asked Questions
At Phillips Ballenger, we give our all to ensure our Clients’ peace of mind. Our Las Vegas law firm serves clients throughout Clark County, Nevada, California, and nationally. effective legal advice regarding all aspects of estate planning, probate, asset protection, and other estate-related issues. Experienced, Personalized Estate Planning Attorneys serving Las Vegas, Summerlin, Henderson, North Las Vegas, Boulder City, and areas throughout Nevada and California and the US Our Las Vegas-based Trust & Estate Planning lawyer, Tiffany Ballenger Floyd, answers some of the most frequently asked questions she receives, below: Q: Isn't Estate Planning Just for Rich People? A: NO!! Many people have preconceived notions about estate planning and believe that it is only necessary for multi-millionaires who wish to leave large trust funds to their children. However, this is far from the truth; an estate plan can be invaluable tools in the many people’s (not just rich people’s) estate plans. Q: What’s included in a Typical Estate Plan? A: Important documents within a comprehensive estate plan include a Revocable Living Trust, Pour-Over Will, Financial Power of Attorney, documents relating to Health Care decisions, nominations for Guardians for Minor Children, a Certification of Trust, and Personal Property Memorandum, as well as other documents, depending on the individual or family’s situation. Q: What is a Trust? A: A trust, generally, is simply an arrangement where one party holds property on behalf of another party. One of the foundational components of an estate plan is a Revocable Living Trust (also called a “Family Trust” or “Living Trust”). A Revocable Living Trust is a private document created by YOU that dictates what happens if you can no longer make decisions for yourself, or if you pass away. In an estate planning context, trusts are created by the person doing the estate planning (the Grantor), who authorizes another person (the Trustee) to manage the assets for the benefit of a third party (the Beneficiary). A Revocable Living Trust document is completely separate from a Will, although they often work hand in hand with a Will (sometimes called a “Pour-Over Will”) to carry out the Grantor’s wishes. There are many reasons for establishing a trust-based estate plan, including avoiding probate and guardianship court, estate tax minimization, nominating caretakers (Guardians) for your minor children, providing protection for your beneficiaries, and planning for your incapacity. Q: How do I Avoid Probate? A: Probate is messy, costly, and time-consuming. If you leave your estate to your loved ones using a will, everything you own will pass through probate. The process is expensive, time-consuming and open to the public. The probate court is in control of the process until the estate has been settled and distributed. During this process, it is not unusual for the probate courts to freeze assets for weeks or even months while trying to determine the proper disposition of the estate, making it difficult for your family to pay for living expenses. If you are married and have children, you want to make certain that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled. Revocable Living Trusts are often used to avoid probate in states where probate is particularly cumbersome (like Nevada) or in a few other instances, such as when a person owns real estate in multiple states. With proper estate planning, your assets can pass on to your loved ones without undergoing probate, in a manner that is quick, inexpensive and private. Q: How Do I Make Sure My Kids are Taken Care Of? A: This issue is critical- it is so very important that your estate plan address issues regarding the upbringing of your children. If your children are young, you may want to consider implementing a plan that will allow your surviving spouse to devote more attention to your children, without the burden of work obligations. You may also want to provide for special counseling and resources for your spouse, if you believe they lack the experience or ability to handle financial and legal matters. You should also discuss with your attorney the possibility of both you and your spouse dying simultaneously, or within a short duration of time. A contingency plan should include a list of persons you’d like to manage your assets and name a guardian you’d like to nominate to raise your children in your absence. The person, or trustee, in charge of the finances need not be the same person as the guardian (or caretaker). In fact, in many situations, you may want to purposely designate different persons to maintain a system of checks and balances. You should give careful thought to your choice of guardian, ensuring that he or she shares the values you want instilled in your children. You will also want to give consideration to the age and financial condition of a potential guardian. Some guardians may lack child-rearing skills you feel are necessary. If you fail to plan, the decision as to who will manage your finances and raise your children will be left to a court of law- which is not only expensive and cumbersome, but may result in someone being named Guardian of your children who you wouldn't have chosen. Q: What Can I Do to Protect my Kids’ Inheritance? A: At Phillips Ballenger, we offer many creative, customized options for this critical issue. We can include provisions to provide for Asset Protection for your children, surviving spouse, and/or other beneficiaries. Another issue to consider during the planning process is whether you’d like your beneficiaries to receive your assets directly, or to have the assets placed in trust and distributed subject to conditions and circumstances such as age, need and even incentives based on behavior and education. All too often, children receive substantial assets before they are mature enough to handle them in a prudent manner- just think about how you would've spent a windfall at the age of 18… (!) Q: What Happens if I Become Incapacitated? A: Statistically, a person is six times more likely to become incapacitated than to die in any given year. If you become incapacitated, you won’t be able to manage your own financial (or health care related) affairs. Many are under the mistaken impression that one’s spouse or adult children can automatically take over for them if they become incapacitated. Not true! In order for others to be able to manage your finances, they must petition a court to declare you legally incompetent- i.e., you and your family end up in Guardianship court. This process can be lengthy, costly and stressful. Even if the court appoints the person you would have chosen, the individual may have to come back to the court every year and show how he or she is spending and investing each and every penny. If you want your someone to be able to immediately take over for you, without Court involvement, it’s essential that you work with a knowledgeable Estate Planning attorney to create the proper legal documents to designate a person that you trust so they will have the authority to withdraw money from your accounts to pay bills, take distributions from your IRAs, sell stocks, and refinance your home, if needed, to ensure you and your family are taken care of. This is typically handled through a Financial Durable Power of Attorney (also called a Power of Attorney for Financial Decisions). Many people mistakenly think that a simple will can effectively protect you in the event that you become incapacitated, but the truth is that a will does not take effect until you die. As such, without a Financial Durable Power of Attorney, your family may end up in Guardianship court. Q: How Can I Ensure that My Health Care Decisions are Handled Properly? A: In addition to planning for the financial aspect of your affairs during incapacity, it’s critical that you establish a plan for your medical care. The law allows you to appoint someone you trust - for example, a family member or close friend to make decisions on your behalf about medical treatment options if you lose the ability to decide for yourself. You can do this by creating a document called a Health Care Power of Attorney where you designate the person to make such decisions on your behalf. In addition to your Health Care Power of Attorney, you should also have 2 other important documents- a HIPAA Release (authorizing your decision makers to talk to hospitals/doctors about your care & condition) and a Living Will, which informs others of your preferred medical treatments such as the use of extraordinary measures should you become permanently unconscious or terminally ill. Nevada offers a free service to record your Health Care documents, so health care providers and your Agents can access them in case of emergency: Click here for more information on the Nevada Living Will Lockbox. If you have more questions regarding Trusts and your Estate Planning options, or to schedule a personalized consultation with our experienced Las Vegas estate planning attorneys, call us at 702-997-5701, or contact us by email. We help protect your estate, your family, your legacy- one step at a time.
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