Nevada

ESTATE PLANNING

Some people hear about a friend or other family member who had to go through a lengthy or expensive court process because planning was not put in place. It is wise to plan now, and especially so if you or your loved one has mild cognitive impairment or your beneficiaries have special needs.

An essential estate plan will include documents that specify who gets what and under what terms. For those with minor children, a will is essential because it names the guardians of minor children, and you will want to ensure that you, and not the courts, are naming their guardians. Here are some basic documents that are typically part of an essential estate plan:

• Will: A document that states who receives your assets. You also name the person in charge, called a personal representative. If you have minor children, you need to name a guardian for them. A will alone does not avoid the probate process.
• Power of attorney for assets: Naming someone to act as your agent to handle financial matters, typically when you become incapacitated.
• Power of attorney for health care: Naming someone to make health care decisions on your behalf if you lose the ability to do so. This document also instructs what your final wishes are regarding life support, in the event you cannot express your wishes yourself.
• Trusts: Revocable trusts are sometimes the best option as it can avoid the probate process and provide for more legacy planning. Irrevocable trusts are often used for asset protection purposes to safeguard your assets from lawsuits.

When a person passes away without a will, they are known to have died intestate. If you die intestate, your assets will be distributed according to state law. The division of assets under the law may not coincide with your wishes. Additionally, assets titled solely in the name of the decedent without a beneficiary designation will have to go through the probate process, which is time-consuming and can be expensive. It can also result in your heirs and beneficiaries waiting longer to receive their inheritance.

A will is a legal document that outlines how you would like your property distributed upon your death, and names who you want to be guardians for your minor children. Your will also names an executor that administers your estate during the probate process.

Trusts are the only way to avoid the public, costly, and time-consuming process of probate. Trusts are legal documents that allow you to create a separate entity to hold your assets. When creating a trust, you will also name a trustee who will manage the assets for you and your beneficiaries. In the majority of cases, trusts do help your loved ones avoid the probate process. However, this is only the case when trusts are properly funded. If there are assets that are not in the trust at the time of your death, they will have to go through probate.

One of the biggest misconceptions is that only older and wealthy individuals need to worry about estate planning. This is not true. Truthfully, everyone has an estate even if they do not realize it. If you own a home, vehicle, bank account, or even clothing and jewelry, you have an estate that will be distributed upon your death. If you do not have an estate plan in place, this property may not be distributed according to your wishes.

Additionally, adults of all ages need an estate plan in place. No one knows what will happen in the future. You may become incapacitated while young, and need someone to make decisions on your behalf. Or, the worst could happen and your children could be left without a guardian. People of all ages, and of all income brackets, need an estate plan to protect themselves and their family.

Contrary to what many people think, estate plans are not ‘set it and forget it’ documents. You must review them periodically to make sure that they still reflect your last wishes. It is critical that you review and update your estate plan any time you experience an important life change. These can include events such as:

• Birth
• Death
• Marriage or divorce
• Disability of you or a beneficiary
• Substantial increase or decrease in the net worth of you or a beneficiary
• Significant change in your asset clarification
• The planned sale or purchase of a business
• Your move to another state
• Changes in tax or elder law

Even without these life changes, you should review and update your estate plan every two to three years to ensure that it is still relevant and reflects your wishes.