Tag Archives: Estate

Separate Assets, Joint Problems


Some married couples enjoy living together while keeping their financial assets separate. Separate ownership of assets can be advantageous in some instances, but oftentimes loving couples misunderstand the results of holding separate assets.  The Wall Street Journal recently highlighted four potential pitfalls for couples maintaining separate accounts:

  1. The assets are not necessarily separate under Nevada law.

Simply having your name on an account does not mean the account is yours alone.  Under Nevada law, pursuant to community property principles, all of your earnings and wages after marriage are the property of both parties.   This is true even if you have your paycheck deposited into a separate account.

Nevada inheritance laws can surprise couples. If you die without a will and leave a surviving spouse, no children and surviving parents, your parents are entitled to a portion of your estate.  Many spouses intend for their entire estate to go to a surviving spouse.  However, unless that desire is set forth in a will or trust, the state may direct otherwise.

  1. Separate accounts most often mean lack of communication.

Communication between spouses is critical.  Many spouses have separate retirement accounts and manage those accounts in isolation.  This isolated planning can undermine the couple’s financial objectives and their combined risk tolerance.  Regularly, I meet with clients where both spouses are unaware of accounts or policies that one spouse possesses.  These omissions could cause the account proceeds to go missing or remain unclaimed for long periods of time.

In addition, holding similar investments in two separate accounts can be more costly.  Combining the separate holdings may result in lower advisory fees.

  1. Separately-owned property may be at greater risk in bankruptcy or a lawsuit.

Nevada has very liberal exemptions for bankruptcy purposes.  These protections can be utilized best by conferring with an attorney who focuses on asset protection planning.

Joint ownership can make your assets less appealing to creditors.  Creditors loathe joint assets in which they will hold only a one-half interest.  Separately-owned property is less-protected from creditors.  The home is the primary asset to hold jointly or through a trust.

  1. Separate accounts are more difficult to administer.

The death of a loved one causes plenty of heartache.  Maintaining separate account causes needless headaches too.  The time delay in accessing separately-owned accounts can lead to draining financial stress.  Many financial institutions demand formal court orders before allowing access to financial accounts, even when such orders are not necessary.  At a minimum, couples should maintain a joint checking or savings account to make sure the day-to-day expenses can be satisfied.

Estate Planning Awareness Week

October 17-23, 2011 has been designated by Congress as National Estate Planning Awareness Week.  Some estimate that as many as 120 million Americans do not have up-to-date estate plans and long term financial strategies to protect themselves or their families in the event of sickness, accidents, or untimely death.  The purpose of National Estate Planning Awareness Week is to encourage consumers to address these issues before they have a chance to negatively impact their daily lives.   Estate planning can include many different areas such as: retirement planning, asset protection planning, beneficiary designations, tax planning, planning for children, taking precautions to  address the risk of future disability, insurance planning, and more.

Locally, several charities are sponsoring a free workshop series titled, “It’s Your Estate.”  The workshops are designed to educate the public in the consumer financial arena and help them take charge of their own money and estate.  Jason C. Morris, Esq.will present on the Advanced Estate Planning topic the week of October 11th – 13th.  Mr. Morris will present at S. Valleys Library, 15650 Wedge Parkway, on October 11 at 2 p.m.  On October 12th, Mr. Morris will present at the North Valley Library, 1075 N. Hills Blvd #340 at 2 p.m.  Thursday, October 13th, Mr. Morris will present at the Sparks Library, 1125 12th Street, at 11:00 a.m. and offer another presentation at the Northwest Reno Library, 2325 Robb Drive, at 2:30 p.m.

For reservations or questions, call the Community Foundation of Western Nevada at 775.333.5499.

Estate Planning for Young Adults

A recent survey found that 92% of adults under age 35 do not have a will.  Many of my own friends and colleagues fit this description.  The most common explanations I hear are (1) they feel that they do not have enough to justify a will or (2) they do not have the means to pay for a will.

As for the first rationale, the label “estate planning” conjures up images of vast wealth and property ownership.  In reality, your “estate” comprises all of your personal and financial interests.   Providing your family and heirs some direction with regard to your assets lifts a major burden off of their shoulders in the midst of their grieving.

For married couples with children, the primary function of a will should be to name a guardian for their children.  Informally asking a family member or friend to look out for your children is insufficient.  For single parents, there is ever more urgency to name a guardian.  In the event of a simultaneous death, who will become the caregiver for the children?

In addition, for couples with children, would you like your children to receive their inheritance outright at age 18?  Without any planning, your children will receive money due to them upon reaching the age of majority.  As wonderful as your children may be, few are capable of handling money very well at such at an early age.    With some basic will drafting, money and assets can be held in a custodial account until your children are at least age 25.

As for the cost of planning, many young adults overlook the cost of probate.  Simply put, you will pay during life or after death.  Under Nevada law, if your estate totals more than $20,000 you must file a petition in court to distribute those assets.  Even college students with several electronics (laptop, iPad, cell phone), a meager checking account, and their own car can surpass this threshold.

The probate statutes are designed to pass your assets to your family.  Most people would like to have a say in how their earthly possessions will pass on to loved ones.  Would you rather choose how the assets pass or allow the state to determine their succession?

Also, any good estate planning attorney will prepare documents to assist with incapacity planning.  As young adults we tend to be more active and also subject to potentially incapacitating injuries.   You should state who you would like to make medical and financial decisions on your behalf.  As a result of the well publicized Terri Schiavo case, many are aware of the family entanglements that can ensue without these documents.  Medical and financial powers of attorney are vital components of your estate plan.

Most do not blink at paying for home, auto and health insurance.  Similar to these “just in case” protections, a simple estate plan acts as a safeguard for you and your family.  For help with your estate planning you should contact a qualified estate planning attorney.

Nevada Probate for Dummies®, Part Two

My dad just died. He named me the personal representative of his will. Now what?

What is involved in probating a loved one’s estate? Many people feel overwhelmed when they lose a relative or friend, and find themselves in the unenviable position of having to grieve the loss of their loved one, arrange the funeral, deal with difficult relatives, figure out how to pay bills and take care of the deceased’s house, pets, etc.—and on top of all that, they have to find a lawyer to help them deal with the estate.

If the value of the deceased’s possessions exceeds than $100,000, it may be necessary to initiate a probate. Probate means a legal proceeding in which the court has jurisdiction to administer and distribute the assets of a deceased person to those who are legally entitled to the estate.

There are several basic steps to a probate. Once the will has been admitted to probate and an executor or “personal representative” has been appointed to administer the estate, the personal representative must ascertain what assets the deceased owned that need to be included in the probate. Assets subject to probate are those that are titled in the name of the deceased and that are not held in joint tenancy (such as a joint bank account), or that don’t have a beneficiary designation (such as an insurance policy). Assets held in the name of a trust are not subject to probate, either.

The personal representative must file an inventory within 60 days of his or her appointment listing all the assets. The personal representative must publish notice to creditors and send copies of the notice to all known creditors. Legitimate debts of the deceased must be paid from the estate. All tax returns must be filed and taxes paid, if any. Often it is necessary or desirable to sell the assets; and in the case of real property, the sale is subject to confirmation by the court.

Finally, when the estate is ready to be distributed and closed, the personal representative must file an accounting of his or her work on the estate, and petition the court for an order allowing distribution of the remaining assets—less fees and costs of estate administration—to the persons designated in the will to receive the estate. Usually that would be the spouse or children of the deceased.

In some ways, the probate process is simple, but it can also be very complex depending on the circumstances. A good lawyer can help to make the process much easier.

Sharon Parker

FOR DUMMIES® is a registered trademark of Wiley Publishing, Inc.