Generally speaking, people know they need an estate plan. However, in the vast majority of probates I handle, there is no will or trust. Estate planning often goes on the back burner for a variety of reasons. Facing mortality is uncomfortable for many. Life happens, and there are more pressing matters that require immediate attention. Taking time out of a hectic schedule of working, getting kids to day care, school, and extracurriculars for something as unappealing as estate planning is difficult.
Unappealing though it may be, an estate plan is absolutely necessary if you have minor children. Directing who will be the guardian of your minor child is often necessary to avoid unhealthy and unhappy legal battles after you are gone. Further, your children may end up being raised by a family member whose values and parenting methods are far different from what you would prefer. If your children will inherit significant funds from your estate, including life insurance proceeds, it is essential to have a trustee appointed to manage the money and prevent unwise spending.
TRUST OR WILL?
Many people want to know whether the best estate plan for them is a trust or a will. The answer depends on the state of your assets and your personal preferences. A will directs your personal representative to distribute your assets to your beneficiaries. In Nevada, if the gross value of your assets exceeds $100,000 and consists of bank accounts and/or real property, your will must be probated in a court of law. With a probate, your personal representative must hire an attorney, who will complete all the necessary steps in court to distribute your assets to your beneficiaries and give the appropriate notice to any creditors. A trust streamlines the process of distributing assets without court involvement, and it affords privacy to the heirs/beneficiaries. However, a trust is more expensive and more complicated to set up. In addition, a trust requires maintenance. To completely avoid probate, all your bank accounts, investment accounts, retirement account beneficiaries, life insurance beneficiaries, etc. must be in the name of your trust. You must transfer title of any real property into the trust. Often, people who have a trust forget to use it when they acquire new property or refinance a property. Assets left outside of the trust generally must be probated. If you want an estate plan that requires little to no maintenance, a trust is not for you.
DO IT YOURSELF?
Today, with online technology, there are many resources that permit you to prepare your own will or even trust. However, there are hazards and pitfalls to this option. Generic forms that are not tailored to your needs and assets can wreak havoc on your heirs and your personal representative and create ambiguity and confusion in a probate, and can result in a will contest, or trust dispute. In essence, you don’t know what you don’t know.
In sum, don’t wait any longer to make an appointment with a professional to take care of this important part of life. It will be a relief when it is done, and your family will thank you.
