Estate planning is a tool to manage the transfer and distribution of an estate after death. It is important because it provides estate owners with a way to have control over the distribution of their property after their death. The process of creating an estate plan can be complicated, so talking with a Nevada estate planning lawyer can be invaluable. If you are thinking about your estate plan, here are the top four things you need to remember.
What you need to know before creating an estate plan?
1. Wills Are Still The Most Common Tool Estate Planning Tool
A will is a physical document containing the last wishes of a testator/testatrix on how he/she wishes his/her property distributed upon death. Here is where you document your last wishes. With a will, you can provide for your spouse, children, grandchildren, parents or even close friends. You can even set aside part of your property for charity.
In addition, you can choose an executor for your will to oversee the distribution of the estate according to your wishes. You can also include funeral arrangements for how you would like to be buried.
There are certain legal requirements a will must meet to be valid. For example, a will must be signed by the testator/testatrix and it must be witnessed. Have an attorney present when creating a will to ensure it meets all the legal requirements of a valid will.
2. You Do Not Always Have To Prepare A Will, There Are Alternatives
A will is not the only way to distribute property to your loved ones. There are other ways you can do that.
Living trusts allow you to transfer title to assets such as homes or interests in a company to a trust while you are still alive. You continue managing these assets. You can name a trustee to take control of the property upon your incapacity, after a certain period of time or after your death. The property will automatically revert to the trustee after either of the three has happened.
Joint ownership is another vehicle of distributing property outside wills. Joint ownership is a form of ownership of property where two or more persons share title to a property. When one dies, ownership passes automatically to the surviving person.
You can include your spouse or child as a joint owner of property so that upon the death of one person, the surviving person automatically becomes the owner of the property. Joint ownership can also be applied to bank accounts.
Other alternatives to wills you may want to discuss with your attorney include:
- Payable on death for life insurance policies and retirement accounts
- Transfer on death for securities.
3. Estate Planning Allows You To Avoid Intestacy And Probate
Intestacy is when a person dies without a will or without an estate succession plan. In that case, his/her property will be distributed according to the state laws on intestacy. These laws can be harsh. Your spouse and children may not receive a sufficient share of your estate. To make it worse, distant relatives, some you may not even know, may benefit from your estate.
Probate is the court process of determining the validity of a will. It can take three months or more, depending on the size of the estate. It delays distribution of property and burdens a family with unnecessary court expenses. Estate planning helps you avoid it.
4. Estate Planning Allows You To Avoid Federal Estate Tax
While Nevada does not collect estate or inheritance tax, estates in Nevada worth more than $5.45 million do owe federal estate tax. The tax is owed on the value of an estate in excess of $5.45 million. And at 40 percent, federal estate tax is very high.
With proper estate planning, this tax burden can be reduced significantly so that your loved ones can inherit as much of your estate as you’d want.
Contact to the Nevada estate planning attorneys at Stone Law Offices today for a consultation to realize the best solutions for your estate’s distribution.