When a married couple created a trust together it is called a shared trust. The basic reason for creating such a trust is probate avoidance. This type of living trust allows your loved ones to avoid costly probate related issues and can dramatically reduce the time and effort needed to gift ones assets to their heirs. 

When one of the members of the shared trust passes away the survivor becomes the sole trustee. Two trusts will then automatically be created from the shared trust. In the first trust the deceased grantor's share of trust property minus any trust property left to the survivor will be held. This will be an irrevocable trust. The second trust will contain the survivor's share of the shared trust. This second trust is a living trust and can be revoked, changed or amended.

Upon the death of the second grantor, the successor trustee named in the trust document takes over as the trustee. Assets may be placed into a fiduciary trust for safe keeping while the duties of the trustee are carried out.

Duties include:

  • Get an appraisal of valuable trust property.
  • Prepare an Affidavit of Assumption of Duties at per N.R.S. 164 (NRS 164.010) letting the courts know of their intention to act as the trustee.
  • Distribute the deceased grantor's share of the trust property to beneficiaries named in the trust document.

  • Manage property left in a child's subtrust in accordance with the Uniform Transfer To Minors Act (UTMA).

  • File tax returns, if necessary.

If you need assistance in preparing and executing the paperwork needed to create a Las Vegas living trust of any type the qualified attorneys of Anthony L. Barney, Ltd. are ready to help you. They will give you years of Las Vegas estate planning experience to make sure you and your loved ones are protected and cared for in the event of your death. You worked your whole life to provide for your family. Don't let probate and the Federal government take what you worked hard to create!



Disclaimer: This information is provided for educational purposes and should not be construed as legal guidance or specific advice. Always consult an attorney when you are dealing with the law.

 
 
Putting a notarized trust in place and executing a will is one of the best ways you can protect your assets for your loved ones and ensure that they have an easier time upon your passing due to the fact that there is a plan in place so they won't have to make rush decisions during such a difficult time in their lives. But you have to wonder, what actually happens when you die? We will break that down for you so you can feel at peace knowing everything truly has been taken care of.

A Basic Estate

This is an example of a basic estate with a trust that has been signed and notarized and where a will has been executed. The trust document will provide where and how the assets held in the trust will be distributed to the settlor's beneficiaries. Another objective of the trust document will be to minimize estate taxes by utilizing techniques such as a by-pass trust. This will utilize the settlor's $600,000 estate tax exemption to reduce the tax liability, and in some cases, remove it completely.

Upon the death of the settlor, the successor trustee named by the trust document will follow the testamentary instructions in the trust document. In addition to handling assets inside the trust, the trustee may notify the executor of assets not inside the trust to begin the probate process for those assets.

Gathering The Assets of the Deceased Settlor

The trustee will need to create a complete listing of all of the assets owned directly or indirectly by the settlor. Deeds or titles of ownership pertaining to identified assets should be reviewed. Along with the list assets, a listing of all debts of the deceased settlor should also be created. Assets should be secured and preserved. After everything has been secured it is time for the next step.

Valuing the Assets of the Decedent as of the Date of Death

Each asset must be valued at a fair market value as if the buyer and the seller were both willing to make the transaction with neither being rushed to buy or sell.

In some cases an independent appraiser is necessary to help establish a fair market value.

Assets must be valued accurately so that income taxes, estate taxes and distribution of assets is not adversely effected by miss valued assets at a later time.

Preparation and Filing of a Federal Estate Tax Return (Form 706)

All assets owned by the decedent need to be listed on the IRS Form 706. This includes assets held in a trust, held in the name of the decedent or are jointly held with another person or entity. A form 706 is due within nine months of the date of death. A one time six month extension may be requested for reasonable cause. The estate taxes are also due nine months from the time of death. Interest and penalties will be assessed for late payments.

Finally, The Following of the Settlor's Testamentary Plan

Once all of the above is settled it is time for the trustee to following the instructions laid out in the trust document. If property passes under a will it will be handled by the named executor of the will. Any assets to be used to fund a by-pass trust or other trusts will be selected in accordance with the trust instructions. The trustee will establish accounting records. Gifts designated for beneficiaries will be completed by the trustee.

What About My Last Income Tax Return?

The final federal return (Form 1040) must be filed and must include all income and deductions up to the date of death. This return is due on April 15th of the following year. If a by-pass trust is established there will need to be Fiduciary Income Tax Return (Form 1041) filed each successive year. The first return will include income and deductions going from the date of death to the end of the year only. Should a probate estate be established a Fiduciary Income Tax Return will need to be filed annually during the existence of the probate estate.



This information is provided to you for informational purposes only. It is not specific advice. It does not constitute an attorney client relationship. Should you need advice on creating or maintaining your Las Vegas family trust you can contact the law offices of Anthony L. Barney, Ltd. Get their free estate planning guide.

 
 
MYTH #1: Since I am young and not wealthy yet, I don't need a will.

Whether or not you are young or old, or wealthy, or not, everyone has an estate. You might not even realize it, but your employer may have either a life insurance policy on you for your family's benefit or they may be holding money for your eventual retirement even if you have only been there for a short time. Any money in your bank accounts, your car(s), your household items, everything you own is an asset that is part of your estate. Should you die these things will go into probate and without a will the state will decide who gets what. This can take months! With a will in place your loved ones will receive the items you leave to them much quicker and easier.

MYTH #2: I don't own anything of any real value to give to anyone when I die.

You'd be surprised at what your loved ones will consider their most cherished, sentimental items of yours. Often they aren't the items you would have considered a valuable enough asset to need a will. Everything from photo albums to who will be the guardian of your surviving children can be included in a last will and testament. It is important that you make these decisions or they will be up to the state to decided. We all know how bad that can turn out.

MYTH #3: I have a good family that will take care of my children if I were to die. I don't need a will for that.

If you do not appoint a guardian for your children you will be leaving it up to a judge to decide who raises them. He will not know the inner workings of your family and will only be able to go by the testimony of those who choose to petition for guardianship. The most conniving members of your family that you don't want raising your children will most likely be the ones raising your children unless you have a will expressing your wishes.

MYTH #4: Trusts are nothing more than tax shelters for rich people. There is no advantage for people like me.

A trust is not a tax shelter. It is a way to protect your assets from probate and to ensure that they go where you want them to go. You can set up a trust to hold your life insurance so that the proceeds from the policy are split up to cover things like making sure kids have money for continuing education, weddings, a house, etc. With a trust you can also avoid conservatorship in the even of your incapacity. Your loved ones will avoid probate and receive their inheritance much sooner. Also, your assets won't become public knowledge through probate records. Many criminals now scan these records to find new targets that have just come into money or new property.

MYTH #5: Attorneys are for rich people with a lot of money. I cannot afford one and they wouldn't want to work with me anyway.

This is absolutely false. Attorneys work with people of all income levels. Working with an attorney will often save you hundreds, if not thousands, of dollars in the long run. They will take the time to explain to you with real world examples the ins and outs of different forms of trusts so that you can work towards finding the setup that is right for your situation. An experienced attorney will have a wealth of knowledge from past experiences to bring to the table. Attorneys enjoy helping people to navigate the law. It is their life's work.



Do you need to speak with an attorney about setting up a will or a trust?

The law offices of Anthony L. Barney, Ltd. are experienced in probate, trust, family and civil practice. Call on them to assist you in your civil litigation matters whether they be in trial or appellate courts. They are standing by to assist you with a last will and testament in Las Vegas and they can also help you with a Nevada asset protection trust.

Feel free to read about more information on Nevada estate planning in their client resources section.

Disclaimer: The information provided on this website is for educational purposes only. It is meant to inform the reader and give them a general understanding of the law. It is not specific legal advice. If you need legal advice you should seek out a licensed attorney in your state.

 
 
UNIFORM TRANSFERS TO MINORS ACT (NEVADA)

One question that often comes up during asset protection consultations between attorneys and their clients deals with what happens to their minor children or grandchildren in the effect of the clients death. Nevada has a statute on the books called Nevada's Uniform Act on Transfers to Minors. It is based off of the Uniform Transfers to Minors Act (UTMA) as drafted and recommended by the National Conference of Commissioners on Uniform State Laws in 1986. To put it simply, the act provides a mechanism under which gifts can be made to a minor without the required presence of the minor's appointed guardian. The act satisfies the Internal Revenue Service requirements for qualifying a gift of up to $14,000 for exclusion from the gift tax. This extends the previously enacted Uniform Gifts to Minors Act (UGMA).

In Nevada the child will have access to the gift upon reaching the age of 18. Until then a custodian will manage and invest the property and be allowed to make payments on the minors behalf out of the corpus of the gift.

Should the donor choose to also act as the custodian and die before the gift is released to the child, the value of the custodianship property will be included in the donor's gross estate.

UNDUE INFLUENCE

Undue influence is often used as a plot device in Hollywood movies. The non-technical explanation is that this is where one family member, or a care taker of an elderly person, uses their influence over this person to get them to change their will at the last minute before their death. The technical explanation is that undue influence is an equitable doctrine in jurisprudence. An equitable doctrine is a legal principal that supplements other laws. Think of it as house rules in the board game Monopoly. According to the game free parking should pay you nothing. Most house rules modify this to put all taxes and fees into the middle of the board to be collected when somebody lands on free parking. The only difference is that this wouldn't be a house rule. It would be a rule followed by all other states.

Having an attorney that is well qualified to deal with probate issues is very important when drafting your will. Even if you are going to set up a trust to manage your estate it is still very important if the trust is a living trust, also known as a revocable trust. The reason being that you can still make changes to what happens to your assets upon your death or you are found to be incompetent to manage your assets.

One of the psychological effects of aging on the brain is to induce paranoid delusions about ones family. This often gives the elderly subjects caretakers undue influence over them. Even if a trustor that has named you as a beneficiary to their estate makes a last minute change dropping you from their list of heirs you can hire a good Las Vegas attorney to work on your behalf and petition the courts that there was undue influence involved.

BENEFICIARY DEEDS


A common mistake people make when they forgo using an attorney during the estate planning process is to setup a Beneficiary Deed in place of a trust. Yes, a Beneficiary Deed does cost less and is nowhere near as complex as setting up a trust. Yes, it will allow your beneficiary or beneficiaries to avoid probate in the event of your death. A big problem is that a Beneficiary Deed will not protect your heirs from estate taxes and it does not qualify as a gift tax. On top of this there can be problems which bring it back into probate if a beneficiary is a minor or there are multiple beneficiaries with undivided interests.

If paying the fees to setup a trust is difficult it may be wise to talk to your beneficiary or beneficiaries to see about collecting the fees from them. Otherwise they could lose out on as much as 35% of the assets they could have received in full.

DISCLAIMER


This article should be used for informational purposes only and should not to be construed as tax guidance. Be sure to consult with a tax professional and/or a Nevada attorney that is experienced in probate and trust laws.