Category Archives: Probate

Small Estate Affidavits; Or, How to Know If Someone Has Authority to Act on Behalf of an Estate – Part II

scales-of-justice  In my previous blog post, I addressed how you know whether someone has authority to act on behalf of an estate. I explained that letters testamentary, provided they are recently certified, furnish proof that the person in question has been appointed executor or personal representative of the estate. What if the person presents not letters testamentary but an affidavit?

Suppose for example that you are a bank clerk in Twin Falls, Idaho. A woman comes in to your branch and shows you an affidavit saying that a bank customer who was a resident of Elko, Nevada has died and she is entitled to receive the whole of the customer’s estate. The account has $9,000 in it and there is no “pay on death” beneficiary. The affidavit is supported by a will purportedly signed by the customer and leaves everything to the woman in question, who is a cousin of the decedent. It also identifies a vehicle of the decedent. The affidavit purports to be made pursuant to NRS 146.080.

What should the bank clerk do? How does the clerk know if the affidavit is true? Should the clerk get more documentation? Can the clerk demand a court order instead of the affidavit?

NRS 146.080 allows a beneficiary of a will or an heir of an intestate estate to obtain the decedent’s property if the decedent left less than $20,000 (excluding sums due for service in the armed forces) and no real property in decedent’s individual name. An affidavit can be used if at least forty days have elapsed since the decedent’s death. It must identify the affiant (the person making the affidavit) by name and address and state that the affiant is entitled to the decedent’s property. The affidavit has to state, among other things, that there is no petition for the appointment of a personal representative pending in any jurisdiction nor has any such petition been granted, and that all of decedent’s debts have been paid or provided for. It must describe the personal property claimed. It must state that the affiant has given written notice by personal service or certified mail, identifying the affiant’s claim and describing the property to all persons whose claim is equal or greater than affiant’s, and that fourteen days have elapsed since such notice was given. Additional requirements are listed in the statute.

Effective October 1, 2015, the small estate affidavit rules have been revised to allow a surviving spouse to obtain property up to a value of $100,000, and any other qualified person to receive property up to $25,000 by this method. The legislative changes also provide that the affidavit must state that the affiant has no knowledge of any existing claims for personal injury or tort damages against the decedent. Finally, the value of decedent’s motor vehicles is now to be excluded when calculating the value of the estate. Note, however, that the DMV will still need to see the affidavit and the affidavit must identify any and all vehicles that the affiant wishes to transfer.

Back to our example: if the affidavit is properly completed and the bank clerk has no reason to believe anything is amiss, it is proper to give the money to the person presenting the affidavit. The bank fulfills its obligation to the heirs or to the estate if it relies in good faith on the affidavit. That said, very often banks and brokerage firms outside of Nevada are not familiar with this provision of Nevada law and do in fact insist that a court order be obtained. If the bank refuses to turn over the account, the beneficiary may have to file a petition in court to set aside the account to herself.

If you are presented with a question about whether a small estate affidavit is valid under Nevada law, you should consult with a Nevada probate attorney before taking action.

How to Know If Someone Has Authority to Act on Behalf of an Estate

banner-1[1]            How do you know whether someone has authority to act on behalf of an estate? Suppose the following scenario: You own a jewelry business in Fallon, Nevada. A customer orders an expensive ring and pays for it up front. She dies shortly thereafter, prior to delivery of the ring she purchased. The customer is owed a refund. A few weeks later a young man shows up at your store and says he is the customer’s son and he wants to collect the refund. He shows you a copy of a will purportedly signed by the customer that leaves everything to him. The will states that the son is to be the executor. It expressly disinherits the customer’s other children. The son offers nothing else to support his request that you issue the refund to him personally.

What if you give the money to the son and later find out that the will was invalid, the customer’s daughter is appointed personal representative of the estate, which proceeds by intestate succession because no valid will is ever found? What if the son was actually raised by his father and step mother and had been adopted by his step mother? Would payment of the money to the son discharge the jewelry store’s obligation to refund the customer?

Nevada law provides for procedures by which a will is presented and admitted to probate and an executor or personal representative is appointed to administer the estate. A will by itself is not adequate to support a request for property belonging to the deceased. Why not?

First, because the will may not be valid. It may not have been properly witnessed. It may not be the last will and testament; it may have been revoked by a later will. It may be phony altogether. It may be real, but the product of undue influence or incapacity. By filing a petition in the county court where the deceased resided and giving notice to all interested parties, these issues may be raised and adjudicated. Only after the court has examined the will for validity and all interested parties have had the opportunity to raise any issues that may exist does a court admit a will to probate.

Second, perhaps the will is valid but the person presenting it is not the proper representative of the estate. The fact that the person is named in the will to be the personal representative does not mean he is qualified or has been appointed. Sometimes the person named in the will to act in this role will not be appointed by virtue of having been convicted of a felony, or because he has a conflict of interest or is improvident. Even if the person qualifies, he must actually be appointed to act before he has authority to collect debts owed to the Estate.

How does someone demonstrate he or she is the personal representative of an estate? In an estate where a will is admitted to probate, a personal representative receives letters testamentary. The letters testamentary demonstrate the authority to act on behalf of an estate. This is a short document that is issued by the court and contains an oath signed by the personal representative. It should state any restrictions on the authority granted on the front page. It should also be certified by the court, meaning it has the court’s seal and a stamped statement on the back verifying that the letters are both genuine and current.

Third, even if the will is valid, the decedent may owe money to creditors. Numerous costs must be paid before beneficiaries or heirs receive a share of an estate. These include costs of administration of the estate, costs associated with the decedent’s final illness and with burial, and creditors’ claims. Following proper court procedures ensures that these costs are properly paid before any distribution is made to beneficiaries or heirs.

So—what should the jewelry store do? Without evidence that the son has authority to collect the money on behalf of the estate, such as letters testamentary showing he has been appointed personal representative of the estate, the store should not give him the refund. Payment to the son will not satisfy the obligation to refund the money to the customer; only the customer’s personal representative has authority to collect the money. The store owner should ask the son for current, certified letters testamentary. In the alternative, if the estate is small, the son may furnish what is called a small estate affidavit—this option will be the subject of Part II of this blog post.

How might this have played out if the store did not follow the sage advice contained in this blog? The store cut a check payable for the full amount to the son. Thereafter, the daughter petitioned for appointment as the personal representative of the estate. A will similar to the one presented to the store was presented for probate by another relative, but it was never admitted to probate because it was invalid on its face for defects in the witnesses’ signatures. The estate proceeded according to intestacy laws and the son was not entitled to inherit at all—because he had been adopted by his step-mother, and adoption severed the natural right to inherit from his biological mother. The personal representative sued the store on behalf of the estate for a refund.

If you are presented with a question about whether someone has proper authority, the best course of action is to consult with a qualified probate attorney before taking action.

The 4 P’s of Protecting Your Family’s Legacy Home

Lake CabinThe lakefront home, the mountain cabin or the ocean-side estate all require special planning to protect and enhance these legacy homes. From Lake Tahoe to Donner Lake, from downtown city condos to Pacific Ocean properties, we advise our clients to give special attention to these legacy homes. These special properties need the “four P’s:” protection, privacy, probate avoidance and planning.

Protection:

These types of properties need comprehensive insurance coverage for potential damage to the structure, adequate liability coverage and an ownership structure that provides protection from outside creditors. Under Nevada law, limited liability companies (LLCs) offer tremendous protection, particularly if you or your family rent or lease the legacy home. A Nevada LLC may not prevent a lawsuit, but it will certainly deter potential creditors.

Privacy:

You and your family may not want to divulge the ownership of the real property. Nevada counties have very transparent real property records. Anyone with basic internet search skills can locate the owner of real property, past and present, and the price paid for the real estate. To provide a privacy shield, ownership of the legacy home can be held by a legal entity such as a trust or LLC, with a name unconnected to the family. You should consult with a lawyer to determine which device, trust or LLC, will best meet your objectives as simply titling your legacy home into an existing business entity is not a great solution. Doing so could subject your legacy home to the claims of existing or future business creditors.

Probate Avoidance:

Many people understand the primary benefit of a revocable living trust is probate avoidance. What many do not understand is that a revocable living trust can hold title to real property, like legacy homes, in other states. Families with real property in more than one state must have a trust to avoid probate. An existing revocable trust could be a ready-made device to hold title to your legacy home.

Planning:

Plan now if you want to keep the legacy home in your family. If you do not provide directions or instructions to your family, anxious beneficiaries can force the sale of the legacy home. You must establish a clear succession plan establishing how the property will be managed, maintained and eventually distributed to the next generation or beyond. Please contact a qualified estate planning attorney to discuss how to preserve and protect your legacy home.

What Does a Surviving Spouse Receive if Omitted from the Will?

Wedding ring  In my previous blog regarding lost wills, I discussed a client whose husband’s original will was lost. One discerning reader asked what happened to the client—wouldn’t she inherit everything from her husband anyway? In that case, I wish it had been so. Unfortunately for the client, that was not the case, even though it had been her husband’s intention.

Since the later will could not be offered for probate, we had to go back to his previous will, which was made before his marriage and left everything to his siblings. All was not lost, however. Where a person marries after making a will and his spouse survives him, Nevada law provides that the will is “revoked as to the spouse,” provided that the deceased spouse did not make provision for the surviving spouse by marriage contract or otherwise make it clear in the will that he intentionally omitted her.  The technical term for the inadvertently omitted spouse is a “pretermitted spouse”, from the verb “pretermit” which means to leave undone or to neglect. The law also provides for pretermitted children, i.e., children born after the deceased makes his or her last will.

The term “revoked as to the spouse” does not mean that the wife received all of the deceased’s property. The rule about a pretermitted spouse has to be read together with Nevada’s laws regarding persons who die without wills. In my client’s case, her husband owned the property in question before their marriage; it was his separate property. Since he died without surviving parents or children, one half of his separate property was allocated to her as his pretermitted spouse, and the other one half was allocated as provided in the will he made before their marriage.

That was not the end of the story. We contacted the relatives, explained the situation to them and requested that they disclaim their interest to our client, since that was her husband’s intent per his later, lost will. One of the deceased’s siblings was willing to do so. The rest refused; they thought they were going to get a big windfall. Since our client had maintained the property for twenty years, paid all taxes and maintenance, and born all losses, we obtained court approval to shift their share of the proceeds of the sale of the property to her in compensation for her labor and out of pocket costs. All’s well that ends well, I suppose; but the loss of the husband’s true last will and testament caused a huge legal mess that could have been avoided if the original had been maintained.

If you have a question about your rights under a will as a pretermitted spouse or child, contact a qualified probate attorney.

Can You Probate a Lost Will?

LWT March 2015   I once had a client whose husband had died many years previous, leaving a will in which he left all his property to her. The will had been prepared by a local attorney who later retired, and had died by the time the client retained me. The client had furnished a copy of the will to her accountant, who used it to prepare an estate tax return. However, the accountant only had a copy of the first few pages of the will, not including the signature pages. The client evidently lost the original will and could not locate a copy of it. All we had to go on was the copy of a portion of the will that the accountant had. I did my best to track down the original will or a copy. The drafting attorney was deceased and although I located his former secretary, she indicated that his files had not been retained; the will would have gone back to the client. In short, there was no extant copy of the full will.

Can you probate a lost will? In some instances, yes. If a will is lost by accident after the decedent’s death, or destroyed by fraud during the decedent’s lifetime and without his or her knowledge, a court may receive evidence of the execution and validity of the will. A lost will would have to be proved in the same way as other wills; the persons who witnessed the testator sign the will would have to testify to that fact. This may not be difficult if you know who the witnesses were and can locate them. Often the witnesses of a will are law office personnel. Most law office personnel who witness wills do so often enough that they would not be able to recall a particular instance; especially not where the will had been signed many years prior. If you can locate the witnesses and they remember the will, then the proponent of a lost will has to show that it is more likely than not that the will in question was never revoked by the testator; if no one objects, the court may admit it to probate. In the case of my client, we didn’t know who had witnessed the will because we did not have the signature pages or the pages signed by the witnesses. Without that, we could not offer the lost will for probate.

Lessons learned? Make sure your original will, and your spouse’s original will, are kept in a secure, fire safe location and that the location is known to those who will handle your estate at your death. Often an attorney’s office will store the original will in a vault. If your attorney retires and returns the original to you, put it in another safe place, such as a safe deposit box. Better yet, go to another attorney and see if the will needs updating; the new attorney may have a vault where the will and codicil could be stored. Make sure to keep full copies of the executed will. Finally, keep the original will and copies after the testator dies, even if you do not think there are any assets to probate at his or her death. This is critical! In the case of my client, her husband had died 20 years prior and she thought all assets were in joint tenancy at their death. It was only in refinancing some property that she discovered this was not the case.

If you have questions or concerns about lost wills or the proper care of original estate planning documents, consult with a qualified estate attorney.