Probate is the legal process of estate administration. If you use a last will to state your final wishes, the executor would not be allowed to act independently. The will would be admitted to probate, and the court would provide supervision during the administration process.
The same thing is true if you were to die without any estate planning documents at all. A personal representative would be appointed by the court, and ultimately, the assets would be distributed through the application of the intestate succession laws of the state of Nevada.
While the probate process serves a purpose, it is not necessarily positive for the rightful heirs to an estate. It will typically take about eight months to a year to run its course, and assets cannot be distributed while the estate is being probated. There are also considerable expenses that accumulate during probate.
Anyone that is interested can access probate records, and this loss of privacy is another drawback. Finally, probate opens a window of opportunity for disgruntled parties that may want to challenge the validity of a last will.
Fortunately, there are a number of different ways that you can get assets into the hands of your loved ones outside of probate.
Insurance Policy Proceeds
If you have insurance policies on your life, and you pass away under conditions that are covered, your beneficiary or beneficiaries would be paid directly after you die. The probate court would not be involved in the transactions.
Individual Retirement Accounts
When you name a beneficiary on an individual retirement account form, that person would assume ownership of the account after your passing. Probate would not be a factor.
Community Property With Right of Survivorship
You can add someone else to the title or deed of your home, and they would become a co-owner. This is called joint tenancy with right of survivorship. Nevada is one of a handful of states that recognizes Community Property with Right of Survivorship. You must title the property to include the words “with Right of Survivorship”. In joint tenancy, the right of survivorship is assumed but not so with community property. You must be very specific to include the entire phrase – Community Property with Right of Survivorship. After one of the community property tenants dies, the other one would become the sole owner of the home, and there would be no probate involvement.
Payable on Death Accounts
Banks and brokerages give you the opportunity to add a beneficiary when you open an account. These are called payable on death or transfer on death accounts. While you are living, the beneficiary would have no access to the funds. After you are gone, the beneficiary would obtain a death certificate and present it to the institution. If everything is in order, the funds would be released to the beneficiary in a probate-free manner. With regards to property titled payable on death, in Nevada, there is an 18 month waiting period before the beneficiary can sell the property.
Revocable Living Trusts
Most people do not use the asset transfer methods listed above to proactively create an estate plan. It is just a fact of life that these transfers do not have to be supervised by the probate court. However, it is possible to potentially plan your estate with probate avoidance in mind.
A revocable living trust is the ideal estate planning tool for a wide range of different individuals. The first thing to take note of is the fact that this device is in fact revocable, so you are not bound by your decision to establish the trust. If you ever change your mind, you can dissolve it entirely and take back direct personal possession of the property.
You maintain control while the trust is intact, because you can act as the trustee and the beneficiary while you are still alive. In the trust declaration, you name a successor trustee to administer the trust after you are gone, and your heirs would be the successor beneficiaries.
When the time comes, the successor trustee would distribute assets to the successor beneficiaries in accordance with your wishes as stated in the trust declaration. These distributions would not be subject to the costly, time-consuming, and intrusive process of probate.
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If you would like to discuss your estate planning objectives with a knowledgeable attorney from our firm, we are here to help. You can send us a message through our contact page to request a consultation appointment, and we can be reached by phone at 775-823-9455.