Probate Attorney Explains: 7 Common Misconceptions About Wills and Trusts

Even if your estate is fairly simple and straightforward, there are several reasons it’s still important to formally execute a last will and testament. Each situation is unique. That means a probate attorney is rarely able to provide a one-size solution that fits every case.

For example, do you know why it’s critical to assign a medical power of attorney before you need one or the possible advantages of establishing a trust instead of drawing up a will? Are you aware that a power of attorney expires when you die? Few people outside of the legal profession do.

There are also several misconceptions about wills and trusts that are confusing to the average citizen. Some of these could end up costing you or your loved ones money.

Our estate planning attorney in Las Vegas is here to dispel a few of the most common.

7 Common Myths and Misconceptions About Wills and Trusts

For probate lawyers in Las Vegas, executing a will is probably the most common, routine duty. However, we face a lot of common questions and misconceptions during the initial consultation.

If fear or confusion are preventing you from getting your affairs in order, we’re here to do a little myth-busting about wills and trusts so you can put your mind at ease.

Myth Number 1: You don’t need a will if you have no assets.

Truth: Even if you don’t own any property and your total assets are valued below $25,000, the legal amount that triggers probate, it’s still important to have a will drawn up for several reasons. For example, you may want to formalize your funeral arrangements or ensure that other final requests are honored. You’ll need to establish a trust for that. Living wills are necessary so that your family members and medical professionals will know how to proceed should you be unable to provide consent for medical treatments or end-of-life care.

A probate lawyer can provide you with further details about when and why you need to create a will or trust.

Myth Number 2: Making a will means you can avoid probate.

Truth: Although you can avoid probate in Nevada under certain conditions, creating a will isn’t necessarily one of them. Probate is still required if your estate has a net value of more than $75,000 dollars, if real property is part of your estate, or if the terms of your will are unclear. Estates valued at less than $75,000 but more than $25,000 can undergo what’s known as “simplified probate”.

Myth Number 3: Wills and trusts are the same thing.

Truth: This is a common misconception that’s often based upon popular media written by people with little understanding of estate law. The image in films and TV shows is of the family sitting around in a law office for the reading of the will and its conditions.

The fact is that a will is a fairly simple documentation of your assets at the time the will was created and the particulars of how you would like them distributed. They only go into effect after your death.

Wills can be contested, but they do not contain conditions on bequests. For example, you cannot leave money to your children only on the condition that they perform specific acts like getting married or finishing college.

For that, you need to establish a trust.

Trusts are a legal way of setting aside specific assets during your lifetime and distributing them under specific conditions upon your death. Unlike a will, a trust cannot be contested, but they are a way of keeping certain assets out of probate.

Trusts can also go into effect after death if assets are only created by a death and the establishment of a trust to manage them is outlined in your will. These are known as testamentary trusts, and they will not help you avoid probate.

Myth Number 4: You can use a will to disinherit your spouse.

Truth: In the state of Nevada, this is only true if you and your spouse have a prior arrangement that he or she will receive nothing, and this agreement is formalized and filed with the court. As your probate attorney in Las Vegas will probably advise you, disinheriting your spouse in your will usually causes the will to be contested in probate court.

Probate judges are likely to rule in a spouse’s favor and award them at least part of your estate unless there are provable, extraordinary circumstances, such as suspicion of executing the will under duress.

Myth Number 5: Family members who have been disinherited don’t need to be notified of probate proceedings.

Truth: Even if you have intentionally left an heir out of your will, the probate court, probate attorney, or executor still must notify them of a death and probate proceedings. This is why it’s important to create a will with the help of a probate lawyer in Las Vegas and appoint an executor to oversee the distribution of your assets after death.

Myth Number 6: Estate taxes are always due upon death, and your heirs will have to pay them.

Truth: Most estates aren’t taxable under current estate tax guidelines. In fact, the state of Nevada does not have an estate tax.

There may, however, be a federal tax due if your estate is valued over the federal exemption amount of $12.06 million. The tax is only levied on the amount of estate valuation above that amount. Your heirs could also be subjected to the estate tax levied on bequests of assets located in states that do have an estate tax.

The federal exemption applies to both spouses, meaning your probate attorney can set up your estate so that one spouse can pass their exemption to the other. That way, both exemptions can be used when the second spouse dies.

Nevada is also a state that doesn’t have gift taxes. However, any bequests valued over $16,000 are subject to a federal gift tax per bequest above that amount.

There are, however, probate fees due upon death, and those must be paid to the court when the will is filed. In Nevada, the fee is between 2 – 4% of the total value of the estate, which is paid by the estate’s assets before disbursement.

Probate lawyers in Las Vegas usually charge a flat rate for their services, but there may be other costs, including:

• Filing fees

• Creditor notification fees

• Executor fees

• Probate bonds

Myth Number 7: Your assets automatically pass to your spouse when you die.

Truth: Although you cannot legally disinherit a spouse without their knowledge and consent, they do not automatically inherit all of your assets after you die.

When you die intestate, which means without a will, any assets that were not jointly owed by you and your spouse, those without joint-tenancy, such as bank accounts or houses, and those which do not have a named beneficiary must go through the probate process.

If you do not have a spouse, your assets will be divided among your legal heirs under the Nevada lines of succession. Basically, that means any children, then surviving parents, siblings, and other relatives in that order.

Why You Need a Probate Attorney

Probate laws vary from state to state. However, all 50 states require will validation and notice that a death has occurred. Some states will even recognize a will that was executed in another state, but not all of them do.

Residents of the Las Vegas community can protect their assets and help ensure that their last wishes are fulfilled by consulting with an experienced probate attorney who knows Nevada probate law.