Since most people only encounter estate planning issues a few times in their lives, it is not uncommon for doubt and misinformation to be prevalent regarding it. Below are some common questions relating to estate planning. For other questions, don’t hesitate to contact the Las Vegas estate planning lawyers at Bowler Dixon & Twitchell LLP for seasoned legal counsel.
What is estate planning?
Put simply, this is the process of setting yourself up for an orderly and efficient transfer of assets at death. This typically involves preparing a will or living trust and includes life insurance planning through irrevocable life insurance trusts. Estate planning is also intended to encompass planning for the support of your minor children and your spouse along with your assets.
What laws regulate estate planning?
The Internal Revenue Code establishes the rules for federal estate and gift taxes, income tax, and generation-skipping tax. Any disputes between taxpayers and the IRS are adjudicated by federal courts. The state of Nevada on the other hand governs inheritance, estate, and gift taxes, along with wills, trusts, general and limited partnerships, etc.
What is a will?
Wills let a decedent control the flow of assets at the time of their death. Without a will in place, a person is said to die intestate and Nevada will determine how the deceased’s assets will be distributed according to its intestacy laws. Wills are revocable during life, inoperative before death, and applicable to the situation that exists at death. Parents with minor children can use a will to choose a guarding in the event that the children are left orphaned.
What is a living trust?
This resembles a will in that it manages the distribution of your assets upon death. On the other hand, a living trust can provide instruction for how to manage your assets in the event of your disability. You will name a trustee who will manage your trust which can be yourself, and you can enjoy the full use of your assets during your life and change the terms of your trust or revoke them any time you wish.
Are there any disadvantages to a trust?
Revocable trusts are usually more expensive to establish than a will. This is due in part to the latent benefit of skipping the pricey probate process by having a trust. The cost of having a will and post-mortem probate administration almost always exceeds the costs of a living trust.