Frequently Asked Questions About Estate Planning
Are There Different Types of Wills?
There are many types of wills:
- A “formal will” is typed or on a preprinted form which is signed by the testator and properly witnessed.
- A “holographic will” is entirely handwritten, dated and signed by the testator.
- A “living will,” medical directive or health care directive authorizes the continuance or cessation of life-sustaining medical treatments for an individual who is incapable of making decisions due to being incapacitated.
Who Should Make a Will?
Every adult person should consider making a will. Each year, a large number of people die without a will, potentially creating undesired consequences. Wills are especially important for parents of children who are under the age of 18, as arrangements for the financial support and/or the appointment of a guardian for a minor child can be directed by the parent in the parent’s will. Without a properly drafted will, property to be distributed to minor children could be subject to an expensive, court-supervised guardianship and adversely affect the child’s inheritance. Also, depending on whether property is characterized as community property or separate property, if a deceased person was married and childless at his/her death, the decedent’s parents or other relatives could split the decedent’s property with the decedent’s spouse if not alternatively directed in a will.
How Does a Trust Work?
A trust is an arrangement by which a person as grantor (sometimes referred to as a settlor, trustor or trustmaker) transfers legal ownership of property to himself/herself as trustee (or to another a person or institution as trustee) to manage the property for the benefit of the grantor (or another person) as beneficiary of the trust. Trusts create a fiduciary relationship between the trustee and the beneficiary, and the trustee must act solely in the best interests of the trust and beneficiary when dealing with the trust property. If a trustee does not live up to this duty, the trustee is legally accountable to the beneficiary for any damage to the beneficiary’s interests.
What about Health Care Provisions and Powers of Attorney?
Nevada allows for the delegation of decision-making power to cover health care issues, including the withholding or withdrawal of life support treatment, by means of a power of attorney for health care decisions. Through this power of attorney, you have the right to designate an agent who can make treatment decisions for you when you cannot make your own decisions because of a medical or mental condition.
What are Estate (Death) Taxes?
Estate taxes may apply to your estate at your death if you have a taxable estate for estate tax purposes. In that regard, your estate includes the value of all property in which you had an interest at the time of death. In addition to bank accounts, investment accounts, retirement accounts, real property and tangible personal property, your gross estate for estate tax purposes will also include the value of other property interests such as the following:
- Life insurance proceeds on your life if you owned the policy or had enough control over the policy for it to be deemed owned by you
- The value of certain annuities owned by you and made payable to your estate or persons you designate as beneficiaries
- The value of certain property you transferred within 3 years before your death
- The value of property held in a trust (established by you or, in some instances, others) as to which you have certain powers at your date of death
The allowable deductions used in determining your taxable estate include:
- Funeral expenses paid out of your estate
- Debts you owed at the time of death
- The marital deduction (generally, the value of property that passes from your estate to your surviving spouse)
I Live in Northern Nevada. Can You Help Me with My Estate Planning?
If you or someone you know, in Reno or Sparks or within the surrounding areas in Washoe County, or in other parts of northern Nevada, including, but not limited to Carson City, Douglas County, Churchill County, Storey County, Lyon County, Pershing County or Humboldt County, need the assistance of legal counsel experienced in estate, trust and/or business matters, contact attorney J. Robert Parke today at 775-391-6494, or use the contact form provided on this site to schedule your initial consultation.