Wednesday, July 20, 2016

Determining The Validity Of Your Will During Your Lifetime

One of the common fears of clients when doing their estate planning is that the terms of their last will and testament and/or their revocable trust will not be followed after their death.  In this regard, there are a limited number of legal theories to challenge the validity of a will or trust of a decedent.  The two most common legal theories are: (1) the decedent lacked the necessary legal capacity at the time the will (testamentary capacity) or trust (contractual capacity) was created, and (2) the decedent was unduly influenced by someone at the time the will or trust was created. 

When a will or trust is so challenged, one of the main problems is that the person who made the will or created the trust is now deceased.  The maker of the will or trust is no longer available to confirm that these are their intentions, that they have the necessary legal capacity, that they are not being unduly influenced, and if necessary explain to the court or jury the reasons for the terms of their will and trust such as why a child is disinherited.  This unavailability of the maker of the will or trust may lead to speculation on the part of the judge or jurors, and the substitution of their judgment of what they believe the will or trust should provide such as a child should not be disinherited.  At least as to wills, there is now a solution to this problem in Nevada.

For many years under Nevada law, the maker of a will, trust or other writing constituting a testamentary instrument could have a court determine any question of validity arising under the instrument and issue a declaration of rights. In other words, a Nevada court could issue a declaratory judgment as to the validity of a will or trust. Specifically, the law is Nevada Revised Statute 30.40(2). However, until recently this statute has been construed to mean that such a determination and declaratory judgment of the validity of a testamentary instrument by a court could not take place until after the death of the maker. This has now changed as to wills. The 2015 Nevada legislature passed a law that states if a declaratory judgment is entered under Nevada Revised Statute 30.40(2) during the lifetime of a decedent declaring a document to be the valid will of the decedent, the validity of that will is not subject to challenge after the death of the decedent. Of important note is this does not prevent the person from later revoking the will or making a new will during their lifetime.

However, of particular concern is that the Legislature did not include trusts in the new law.  This is most unfortunate in that revocable trusts are the primary estate planning tool in this day and age as opposed to wills.  One saving grace may be that in most instances the will is executed the same day as the trust.  Accordingly, a determination by the court during the lifetime of the maker that a will is valid should at least indirectly assist in later establishing the validity of a trust that was signed on the same day as the will was signed by the now deceased maker.  A potential problem is that a trust may be amended or restated after the date the will is signed.  Hopefully, a similar law for determining the validity of trusts during the lifetime of the trustor will be enacted in the next session of the Nevada Legislature. 

Tuesday, July 19, 2016

AFR's for August

August AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.56% 0.56% 0.56% 0.56%
Mid-term 1.18% 1.18% 1.18% 1.18%
Long-term 1.90% 1.89% 1.89% 1.88%
The Section 7520 rate is 1.4%

Wednesday, June 29, 2016

Melina Barr-Nicolatus Celebrating 30 Years with Jeffrey Burr

Longevity says a lot about a firm.  Longevity of its employees in particular.  We have several long-term employees, but our longest running employee is Melina, who is celebrating 30 years with Jeffrey Burr this June!  Melina Barr-Nicolatus started with Jeffrey Burr as a paralegal in June of 1986 and has been a support beam of this firm ever since.

We wish Melina a very Happy 30th Anniversary with Jeffrey Burr Ltd.  Here's to many more years.

Friday, June 24, 2016

The Power of Sentimental Value

Sentimental value can sometimes be worth more than economic value. Having represented family members fighting over family mementos worth little or nothing money-wise, we have come to realize the power of sentimental value.

Nevada, like many other states, allows a person to dispose of his/her tangible personal property by a written list referenced in the person’s will or trust. These lists allow a person to designate individual recipients of certain pieces of tangible personal property. The person can change the list as many times as he/she wants during his/her life. However, we oftentimes find the lists are never completed. In some cases the result is family dissension – often over the most unassuming items.

Sometimes the cure to the potential family discord is simply completing the tangible personal property list that accompanies most wills and trusts. If you have promised a certain piece of tangible personal property to someone and you still wish to leave that property to that person, complete your tangible personal property list accordingly. This can facilitate the administration of your estate or trust when you die and hopefully prevent frivolous lawsuits that consume potential inheritances.

For more information about the tangible personal property list, contact the attorneys at Jeffrey Burr, Ltd.


Wednesday, June 22, 2016

Congratulations Jeff Burr on being one of those named Top Attorneys in Mountain States Super Lawyers for 2016 for Estate Planning and Probate.  Jeff has been named since 2007.

Tuesday, June 21, 2016

AFRs for July

The Section 7520 rate is 1.8%
July AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.71% 0.71% 0.71% 0.71%
Mid-term 1.43% 1.42% 1.42% 1.42%
Long-term 2.18% 2.17% 2.16% 2.16%

Wednesday, June 15, 2016

Dangers of Outright Distributions

Many clients feel that once their children or grandchildren reach a certain age, they will have obtained a financial maturity that will enable those beneficiaries to make good financial decisions and not spend their inheritance in one visit to a casino.  Thus, in many estate plans beneficiaries are entitled to receive their inheritance all at once when they reach a certain age, or to receive portions at certain ages. While a beneficiary at age 25 or 30 may very well be financially mature, there are dangers besides a beneficiary’s propensity to spend money to consider when crafting an estate plan.

When a beneficiary is entitled to an outright distribution, those assets may become subject to more than a beneficiary’s spending habits; a judgment creditor can seize an inheritance to satisfy a claim, a bankruptcy court can seize an inheritance to pay creditors and costs of the bankruptcy proceeding, a divorce court may award some or all of an inheritance to that beneficiary’s soon-to-be ex-spouse, or if the beneficiary fails to create his or her own estate plan and something happens to him or her, the inheritance may become subject to a probate.  If a minor is the beneficiary of an outright distribution, they will receive a check when they are 18, with no limitations in place for how they can spend it.

Rebecca J. Haines. Esq.
To avoid those potential dangers, among others, you can direct through your estate plan documents that a beneficiary’s inheritance be held in trust for their benefit, with distributions to be made in the discretion of the trustee.  By making distributions to a beneficiary discretionary rather than mandatory, the inheritance is protected because the money is not in the beneficiary’s pocket to spend or give away.  Allowing the inheritance to stay in trust will also allow the assets to grow, enabling your beneficiary to receive more than what they were originally entitled to over time.

At JEFFREY BURR, LTD. our attorneys have worked with many clients and their families to determine the best estate plan for the preservation of their legacies and protection of their beneficiaries.  To discuss the best estate plan for your family, contact us today.