Estate Planning at John Gavin Real Estate & Law
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ESTATE PLANNING INFORMATION

What is an Estate?
An Estate is the total of all the property that you own, real and personal.  Real Property consists of vacant or improved land and anything that is attached to it, such as a stick built home, commercial building on land, water rights, etc.  Personal property is basically everything else, it is also part of your estate and this refers to items such as insurance policies, stocks, bank accounts, CD’s, mutual funds, money market accounts, furniture, jewelry, vehicles etc.  All of these assets combined make up one’s estate.

What is Estate Planning? 
Estate planning is the method you use to accumulate, safeguard and eventually dispose of your property. It can range from a very simple plan to very complex depending on your needs.  Good planning helps you to enjoy your assets during your lifetime. It is also facilitates giving what you have to who you want, when and how you want.  If done right, it can also minimize “red tape”, governmental or court intervention, probate expenses and possibly administrative costs, transfer fees, court costs, attorney fees, income and possibly, some federal estate taxes.  It can also speed up distributing your assets.

Why do I need an Estate Plan?
Most Americans do not have any kind of an estate plan. Many don’t even have the simplest plan - a will or powers of attorney for medical care or assets.
If you do nothing, most often when you need help the most, it will be at a time when you’ll be the most vulnerable and least prepared and capable of handling your affairs.
Even if you prepare a will, your estate may have to pay thousands of dollars unnecessarily in legal fees, court costs, administration costs, executor fees and estate taxes.  In addition, your heirs have to put up with the sometimes slow, agonizing process of probate and also give up privacy with regards to the estate assets and liabilities.

What is a Living Trust?
A Living Trust is an efficient method of estate planning that is also known as a probate avoidance strategy.  A properly created and funded trust will efficiently distribute your estate to your heirs without the need for court intervention.
Also known as an Inter Vivos Trust, it is flexible or “changeable” during your lifetime.  It can, in most cases, be simply and quickly modified to meet the changes we go through in our lives and adapted as our life circumstances change. 

How does it Work?
When you create a  trust you will normally have three roles.  First, You, in your role as the creator of the trust, agree to be the Trustor and you transfer your assets into the name of your trust.  Second, You, agree to act as the Trustee or “manager” over these assets.  You still have “complete control” over them and make all of the decisions governing them.
You can buy, sell, use, borrow, or do anything else you could have done with the property in your own name.  And, finally, you are the Beneficiary of the trust assets during your lifetime.
As you can see, you maintain full control of your assets and their disposition.  Upon the death of one of the trustors (if a married trust), the remaining Trustor still has complete control of the estate.  Upon the death of both Trustors, the trust becomes irrevocable (unchangeable) and the successor trustee, who you have appointed, takes charge and carries out your instructions to distribute your assets.

What is a Will?  
A legal expression or declaration of a person’s mind or wishes as to the disposition of one’s property, to be performed or take effect after his death.  A Will requires the legal Probate process in order to enact it.  This process costs the estate additional time and money for administration.  Even if you have a Living Trust, you should also have a Will!

What is Probate?
Probate is simply the court-supervised process for paying off your debts and transferring ownership to your property after your death.  If you do not have a Will, a court supplies one under the intestacy laws of the state in which you reside.  If you have a will, in many cases your estate must still go through probate.  A will instructs the judge about how and to whom your estate is to be distributed.

Do I have to have a large Estate for a Living Trust?
Most people think that Estate Planning is just for the rich.  This is not true!  To the contrary, it is for anyone, married or single, who wants to maximize and protect their assets.  Do you want to build and protect an estate for yourself, your spouse or your children?   What if you, or your spouse, become temporarily incapacitated? Medical and Financial Powers of Attorney are critical for the protection of you and your estate in the event that this occurs.  They allow someone, of your choice, the authority to handle your affairs until you recover

If I die without a Will, does the State get all of my assets?
Not necessarily.  If you die without a Will, the Courts will provide one for you in the form of that state’s Laws of Intestacy.  The state will however, dictate how your estate is managed, who will administer your estate, who will receive, and how much each person will get.  In Nevada, your estate will only pass to the Department of Education in the event you have no living heirs per the laws of intestacy. 

What is a Power of Attorney?
A power of attorney (POA) is a document signed and notarized by you that allows someone else to manage your affairs for you in the event that you become temporarily or permanently incapacitated.  Generally speaking, there are three different types of POA’s, Springing Durable, Durable, and Specific.  Contact an attorney to help you decide which is best for you.

What is a “Transfer on Death Deed”
A transfer on death deed is just that, it transfers your real property to a person or persons of your choice upon your death. 

Does a Living Trust protect my assets from lawsuit?
No. A living trust is merely an entity created by you and belonging to you.  It can be sued just like you as an individual can be sued.  There are ways to protect your assets from judgment creditors that can be used in conjunction with a living trust, see your attorney for more information regarding this.

What is the difference between a Living Trust and a Will?
Simply put…Probate.  The concept of a living trust is that you fund it with all of your assets, whereby leaving nothing in your name personally, thus when you pass away, you as an individual don’t own anything.

What does “Funding the Trust” mean?
Funding the Trust is simply changing title of your assets from your individual name to the name of the trust.  A trust is much like a credit card, it has no value until you “activate” it or in this case “Fund” it.  See your attorney for assistance with funding your trust.

Can I put my child’s name on my checking accounts and home to avoid probate?
Yes, but this is the “Most Dangerous Estate Plan” there is.  By putting someone else’s name on your accounts, you open yourself up to lawsuit and attachments from that person.  The banks generally look at placing another’s name on accounts as that person being an “Owner” of the account, regardless of your reasons for adding them to an account.