Monday, September 26, 2016

Planning for the Unexpected ... Divorce

The recent news of the “Brangelina” (Brad Pitt and Angelina Jolie) split has me thinking...even the perceived “match made in Heaven” can end in divorce. The unexpected can become reality. So no matter how improbable divorce may be for you, plan for the unexpected.

Nevada is a community property state, and there is a presumption in Nevada that property acquired during marriage is community property and, therefore, subject to an equal division upon divorce. Some property, however, is not considered community property, unless commingled with community property. For instance, property brought into the marriage is generally the separate property of the spouse who owned the property prior to marriage. Also, inheritance is generally separate property.

How do we make sure, then, that commingling doesn’t happen? How do we deal with appreciation? How are mortgage payments treated? How are premium payments on life insurance, or 401(k)/IRA contributions treated? What do we do with family owned businesses?
Sometimes these questions are left unconsidered, whether because of premarital bliss, naivety, or some other reason. But as the news of Brad Pitt and Angelina Jolie’s divorce shows, the outcomes of human relationships are unpredictable. Sometimes (or many times) unexpected things happen, and we should be ready when they do.

Contact an attorney at JEFFREY BURR, LTD. to make sure you have the right plan and discuss with us your options for a separate property trust, a domestic asset protection trust, or other community property and separate property issues.

Wednesday, September 21, 2016

Join us for NBI Seminar on 10/6/16

Please join Jason Walker, Esq. and Collins Hunsaker, Esq. at their upcoming NBI seminar on October 6th.  Jason and Collins are scheduled to speak to attorneys, certified public accounts, and financial planners regarding:

·         Estate and Gift Tax Laws
·         Taxation of Trusts
·         Revocable Living Trust based plans versus Will based plans
·         Structuring Separate and Joint Revocable Living Trusts

Here is a link to the seminar webpage so you can read more and register: Revocable Living Trusts from Start to Finish

We hope to see you there!

Tuesday, August 30, 2016

If I’m Not Leaving Millions, Do I Need an Estate Plan?

Even if you are not a celebrity or self-made millionaire, failing to plan properly will leave a huge mess for your family.

Some ways to make sure that your family is not scrambling to find assets upon your passing or spending thousands of dollars in court and attorney fees to transfer those assets to your beneficiaries are:

1.  Make sure you at least have a simple Will.

The Will tells a court who you would like your Executor to be, or person that you would like to manage and oversee the probate process.  If you fail to nominate someone, the court will nominate someone for you.  A Will also directs the court to distribute assets to your named beneficiaries in accordance with the terms you lay out.  If you do not have a Will, the state substitutes its own estate plan for yours by distributing your assets according to the state’s intestacy statutes – which may inadvertently disinherit those who you actually wanted to leave your assets to. 

2.  Determine if a Living Trust is good for you.

Living Trusts enable you to bypass the court probate process entirely.  They enable for a smooth transition of assets from you to your beneficiaries after you are gone.  Another benefit of the Living Trust is that it can provide for means to take care of you if you are ever incapacitated. 

3.  Title your Assets Properly.

If you have a Living Trust, it is important to “fund” the Trust with your assets. This means that you must transfer title of bank accounts, investment accounts, real property and vehicles into the name of the Trust. Otherwise, your family will have to probate the assets left in your individual name.  Life Insurance and Retirement Plans should have updated beneficiary designations, which can include your Trust.

4.  Keep an Updated Asset Inventory.

One of the most difficult parts of distributing a person’s assets after they are gone is figuring out exactly what that person owned before they passed away.  Keeping an updated asset inventory will enable your family to effectively take over without having to scramble to figure out if or where you held investment accounts, stock, real property, etc.

While it may seem counter-intuitive, investing in setting up an estate plan now with an experienced estate planning attorney will save your estate (and your family) money in the long run.  So to prevent a mess for your family, even if you are not a celebrity or self-made millionaire, take the time now to meet with an estate planning attorney and determine the best estate plan for you.  

Monday, August 22, 2016

AFR's for September

The AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.79% 0.79% 0.79% 0.79%
Mid-term 1.22% 1.22% 1.22% 1.22%
Long-term 1.90% 1.89% 1.89% 1.88%

Tuesday, August 9, 2016

Nevada's new Commerce Tax

You may have recently received a “Welcome Letter” from the Nevada Department of Taxation notifying you of the newly enacted Commerce Tax laws.

The Commerce Tax is a new tax levied annually on each business entity that (1) does business in Nevada, and (2) earned gross revenue in Nevada for the fiscal year that exceeds $4,000,000. However, even exempt entities or business entities whose gross revenues in a fiscal year do not exceed $4,000,000, will be required to take certain actions before the August 15th deadline.

Exempt entities must file the Exempt Status Entity Form using the Tax ID number provided in the Welcome Letter. You can submit the Exempt Status Entity Form to the Department of Taxation by mail or through the Nevada Tax Center system. After submitting the Exempt Status Entity Form, your exempt entity will be in compliance with the Commerce Tax laws and will be removed from further Commerce Tax related mailings.

The list of entities exempt from the Commerce Tax is limited to:    

 Natural person, unless such person is engaged in a business and files Schedule C, E (Part 1) or F with the federal tax return;
 Governmental entity
 Non-profit organization pursuant to section 501(c) of the Internal Revenue Code;
 Business entity organized pursuant to NRS 82 or NRS 84;
 Credit union
 Grantor trust, excluding a trust taxable as a business entity for federal tax purposes;
 Estate of a natural person, excluding an estate taxable as a business entity for federal tax purposes;
 Certain REITs – Real Estate Investment Trusts
 REMIC – Real Estate Mortgage Investment Conduit
 Passive Entity*
 Entity, which only owns and manages intangible investments, such as stocks, bonds, patents, trademarks
 Participant in an exhibition NOT required to obtain state business license (NRS 360.780)
 Any person or entity which is prohibited from taxing pursuant to Constitution or law

Our office has been assisting many of our clients with this newly adopted Commerce Tax. If you have questions regarding how to file, or if you are exempt or non-exempt, we suggest contacting your attorney, accountant or calling the Department of Taxation.

Attorney Jason C. Walker

Friday, August 5, 2016

LLC Operating Agreements

Even single member LLC’s should have operating agreements.  The importance of an operating agreement seems obvious when unrelated parties are partners in an LLC; but the need seems less apparent when there is one member or if the member of the LLC is a husband and wife or a joint trust.  Having an operating agreement is a tangible item that demonstrates the intent that the LLC be treated as a legitimate business.  A creditor attempting to pierce, or reverse pierce, the veil of the LLC is likely to use the lack of an operating agreement to try to prevail in litigation.

The operating agreement should also be updated from time to time to reflect changes in ownership or management.  For instance, in estate planning matters we often have clients assign their ownership of their LLC to a revocable trust or a Nevada On-Shore Trust (domestic asset protection trust). The resulting change in ownership or a change in the named manager should be updated in the operating agreement with an amendment to the operating agreement or a restatement of the operating agreement. 

Attorney Jason C. Walker

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.