Wednesday, April 9, 2014

Technical Requirements of a Last Will and Testament-Another Reason To Utilize Trusts

In this day and age, most individuals establish a revocable trust. The revocable trust is the key document that controls the disposition of the assets that are transferred to the trust as opposed to the Last Will and Testament being the controlling instrument. The individual’s Last Will and Testament is a “pourover” Will that “pours over” any asset outside the trust that would be controlled by the terms of the Will into the trust to be disposed of per the terms of the revocable trust.   

There are a number of reasons for establishing a revocable trust, including the avoidance of the time and expense of probate when one dies.  Probate is formal Court supervision of an estate proceeding in which the key document is the Last Will and Testament of the decedent.
There are a number of technical, legal requirements for a Will to be valid in Nevada.  Generally speaking, a Will must be in writing and signed the testator (person making the Will), or by an attending person at the testator’s express direction, and attested to by at least two competent witnesses who subscribe their names to the Will in the presence of the testator.  Nevada law also requires that all bequests under the terms of the Will to a subscribing witness to the Will are void unless there are two other competent subscribing witnesses to the Will. Unfortunately, this situation will arise periodically in which an individual who is a subscribing witness is also a beneficiary of the Will.  In such a case, if there are not two other competent subscribing witnesses to the Will, the bequest to the subscribing witness will be void and not legally effective.  This can have serious ramifications, especially if the bequest is a significant one to a member of the decedent such as a child.

Nevada does recognize holographic (handwritten) Wills that require no witnesses.  A valid holographic Will is a Will in which the signature, date and material provisions are written by the hand of the testator, whether or not it is witnessed or notarized.  These requirements are strictly enforced.  For example, a number of holographic Wills have been held invalid because there was no date on them.  Nevada also recognizes electronic Wills.  However, again there are technical, legal requirements that are strictly enforced. For example, an electronic Will must contain at least one authentication characteristic of the testator, and the electronic Will must be created and stored in such a manner that only one authoritative copy exists.  Nevada does not recognize nuncupative or oral Wills.
A revocable trust is much easier to create under Nevada law. Generally speaking, a trust is created if the creator properly manifests an intention to create a trust and there is trust property.

The above technical, legal requirements of a valid Last Will and Testament are yet another reason for the creation of a revocable trust in one’s estate planning.  
-Attorney John Mugan


Tuesday, April 1, 2014

Special Letters Of Administration in Probate Proceedings

Appointing a personal representative in a probate proceeding usually takes from 3 weeks to several months.  In cases where litigation between parties occurs, it can take even longer.  The delay in appointing a personal representative can be a major problem as assets need to be collected and preserved and other estate business needs to be completed.  The appointment of a special administrator helps to resolve this problem.
In Nevada, a special administrator can be appointed quickly through an ex-parte petition and order and without a court hearing.  A special administrator has several powers outlined in NRS 140.040:

NRS140.040  Powers, duties and immunity from liability for certain claims.

1.  A special administrator shall:

(a)Collect and preserve for the executor or administrator when appointed all the goods, chattels and receivables of the decedent, and all incomes, rents, issues, profits, claims and demands of the estate.

(b)Take charge and management of the real property and enter upon and preserve it from damage, waste and injury.

2.  A special administrator may:

(a)For all necessary purposes, commence, maintain or defend actions and other legal proceedings as a personal representative.

(b)Without prior order of the court, sell any perishable property of the estate, as provided in NRS 148.170.

(c)Exercise such other powers as have been conferred by the order of appointment.

(d)Obtain leave of the court to borrow money or to lease or mortgage real property in the same manner as an executor or administrator.

These powers allow a special administrator to conduct necessary estate business such as gather and preserve estate assets, manage a business or participate in legal proceedings for the estate pending the appointment of a personal representative.  Often, special administrators are appointed to open and inventory safe deposit boxes to look for a Last Will and Testament or other important documents. Feel free to contact our office should you have any questions regarding the appointment of a special administrator. 

Attorney – Corey J. Schmutz

Friday, March 28, 2014

Serious Study of a Series LLC

Nevada is one of just a few states in the U.S. that currently allows a strange creature known as a Series LLC.  A Series LLC is a statute-permissible division of one state-law limited liability company into subsidiaries, “cells” or “series;” each of which is a separate LLC for state law purposes.  This was added to Nevada law in 2005.  Nevada law states that the assets, liabilities, debts and obligations of each series are separate and apart from each other series.  The requirements for this separate treatment are: 1) each series must maintain separate and distinct records; and  2) the assets of the series are held (even indirectly through a nominee) separately from the other series; and 3) the articles of organization comply with the statute.  These requirements are really no more burdensome than if a person maintained more than one traditional LLC.

The articles of organization in Nevada provide a simple check-box to select a new LLC as a Series LLC.  It is also possible to amend the articles and select Series LLC treatment.  The biggest requirement, from our experience, seems to be the operating agreements.  We typically prepare an operating agreement for the “container” which would match the name of the LLC formed with the Nevada Secretary of State.  And then we create operating agreements for each series or cell in addition.
Some possible applications for a series LLC are: rental properties; property development; multiple franchises; taxicab companies; rental car companies; trucking companies; commercial property leasing, etc.

PROS:  The biggest advantage for most seems to be price.  Because you can have several LLC’s for the maintenance cost of one LLC (Secretary of State fees apply only to the container).  Easy expansion: adding a new series requires only an amendment to the container operating agreement and the drafting of a new operating agreement for the new series.
CONS: Business operations out of state: since the series LLC is a new concept, non-series states are unfamiliar with the concept and becoming eligible to conduct business outside of Nevada’s borders has proven difficult.  Since the LLC is rather new and unproven in case law, there may be a question of its efficacy.  But we have confidence that the series LLC should work well for Nevada residents that keep their business operations contained to Nevada.

Please contact our office for help with the creation of your series LLC.  The attached diagram shows a typical setup where the series are all part of the same LLC (represented by the cloud).

Attorney Jason C. Walker

Thursday, March 27, 2014

AFR's for April

The section 7520 rate is 2.2%
The AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.28% 0.28% 0.28% 0.28%
Mid-term 1.81% 1.80% 1.80% 1.79%
Long-term 3.32% 3.29% 3.28% 3.27%

Wednesday, March 26, 2014

National Healthcare Decisions Day

Please join us for National Healthcare Decisions Day Kickoff Reception
Thursday April 10, 2014
5:00 pm - 7:00 pm
Palm Mortuary
1600 South Jones Blvd.
Las Vegas, NV 89146

Thursday, March 13, 2014

Upcoming Speaking Engagements

Pleas join us for a FREE lunch and learn
"Don't be Scared, be Prepared"
Wed April 30, 2014
12:00pm  - 1:30pm
H2U Mountain View office
3150 N Tenaya Way #114

Please call 702-233-5474 to register.

Thursday, March 6, 2014


Leaving an estate plan can provide peace of mind that a person's wishes will be respected and carried out when they are no longer around to care for and provide for their loved ones.  Indeed, many estate plans are implemented just as flawlessly as the person who created it intended.  There are, however, no shortage of estate plans that become tied up in lengthy and costly litigation as a result of will or trust contest actions alleging that the testator either did not have capacity to execute the estate plan or was unduly influenced by another person in making the estate plan.  In these instances, the challenges have historically been made after the testator has already passed away.  This is due to the fact that the laws of most states employ purely post-death probate procedures, which only allow the testator's mental capacity to be considered after death.  The inherent flaw then becomes that the person best suited to confirm his or her testamentary wishes is no longer alive to consult about it.
North Dakota, Ohio, Arkansas and Alaska have enacted pre-death or “ante-mortem” probate laws that authorize some form of lifetime will validation. These laws permit testators to proactively seek a court declaration as to the validity of their wills during their lifetimes, thereby reducing the likelihood of a will contest after their death.  With the exception of Alaska these laws have been in existence for some time, having had the most frequent use in Ohio while getting little to no use in North Dakota and Arkansas.  Alaska sparked a reemergence of interest in pre-death probate legislation in 2010 when it adopted a broader version of the ante-mortem probate statute.  In addition to wills, the Alaska statute authorizes the court to declare the validity of trusts during the lifetime of the trustor.  The validation proceedings may either be initiated by the testator or any interested person with the testator’s consent.  Incidentally, Alaska will entertain pre-death probate proceedings even when the testator resides in another state or has no connection to Alaska.  In 2011, the Nevada legislature considered similar ante-mortem probate legislature, but it failed to pass.
Whether Nevada and the other currently “post-mortem” probate states will ultimately enact pre-death probate legislation remains to be seen.  In such states, there continue to be a range of methods that may be invoked when setting up the estate plan to lessen the potential for a will or trust contest later.  Included in these methods are: self-proving wills, no-contest or "in terrorem" clauses, and videotaped execution ceremonies, to name a few.   Individuals who are concerned that a will or trust contest might interfere with his or her carefully crafted estate plan should speak candidly to the attorney about the options available to safeguard it from unwanted attacks.
-Attorney Kari L. Stephens