Thursday, December 22, 2011

Series Limited Liability Company with a Nevada On-Shore Trust

Here in Nevada, we are lucky.  First, as far as natural disasters, we don’t have to worry about hurricanes, tsunamis, blizzards (at least here in Las Vegas).  Tornados are highly unlikely and we have no track record of regular earthquakes.  Second, we’re blessed with pretty decent weather most of the year.  Last but not least, we have the best domestic asset-protection trust statutes in the country!
We’ve talked at length on our blog about the Nevada On-Shore Trust.  Please take a minute to look at our newly revised website www.nevadaonshoretrust.com and tell us what you think.
I really wanted to take a minute and talk about an option that we have used to accompany the Nevada On-Shore Trust.  We regularly team one or more limited liability companies (LLCs) with the Nevada On-Shore Trust to maximize the protection we are seeking for our clients.  For clients with multiple investment properties, or for clients with a broad range of investments that deserve isolation of risk, we have often opted to utilize a Nevada series LLC with the Nevada On-Shore Trust.
A series LLC can be illustrated by the following example:  Imagine the series LLC as a building with four walls and a roof.  Within that building, one could build out individual rooms.  Each room can contain furniture and the furniture in one room does not belong to another room.
The series LLC is like the building.  There is one LLC that is formed with the Nevada Secretary of State, this is sometimes called the “container” LLC.  This means that there is one initial filing fee, and one annual fee.  Within the “container”, one can then begin to create the “series.”  The statutes authorize additional companies to be created and each series is a separate and distinct entity.  The assets and liabilities of each series is separate and apart from the other companies.  Each series must maintain its own separate books and records, should have a separate bank account, and each series is provided its own operating agreement.
The primary advantage to the series LLC is that one can accomplish the goal of having a separate LLC for individual assets (such as investment rental properties) while saving money on state filing fees that might otherwise be prohibitive.
The one down-side to a series LLC is that, from our experience, it is best to keep the series operating only in the State of Nevada.  Perhaps the series LLC would work in other states without too much effort if it is another state that recognizes series LLCs, such as Utah.  But it has proven difficult to achieve foreign LLC status in states that are unfamiliar with the series LLC.  This is because each series does not have its own record with the Secretary of State; therefore we cannot obtain a certificate of good standing for each series.  The only proof of existence is for the entire “container.”  But for clients that have limited their investments to Nevada alone, the series LLC is a nice option when a large number of LLCs has been recommended by counsel.

Wednesday, December 14, 2011

46th Annual Heckerling Institute on Estate Planning

Jeffrey L. Burr and Jason Walker will be attending the Heckerling Institute on Estate Planning in January.  This is the nation's leading conference for estate planners. 

The firm of Jeffrey Burr will also be hosting a booth at the conference to spread the word on Nevada's Domestic Asset Protection trust - what we call the "Nevada On-Shore Trust."

Thursday, December 8, 2011

Irrevocability - Not What You Might Think

There are many types of Trusts that exist under the law.  Trusts can be either revocable or irrevocable.  A revocable trust allows the Grantor of a trust to transfer property into the trust with the unrestricted ability to undo such transfer by transferring the property from trust and even terminating such trust.  In other words, the Grantor is not required to permanently part with ownership and control of property transferred into the trust.  In fact, the trust terms can be amended by the Grantor as he or she deems necessary from time to time. 
With regards to an irrevocable trust, once the Grantor has transferred property into the trust, the Grantor no longer retains the unrestricted right to remove such property or terminate the trust.  The Grantor is unable to amend the terms of the trust.
A very powerful asset protection planning technique involves the use of the Nevada On- Shore Trust (sometime referred to as the Nevada Asset ProtectionTrust or the Nevada Self- Settled Spendthrift Trust) The Nevada On-Shore Trust is an irrevocable trust.  For some, the concept of irrevocability causes some hesitations in proceeding with implementing the Nevada On-Shore Trust as part of their asset protection planning.  The most often asked question by a person being introduced to the Nevada On-Shore Trust is whether or not the terms of the agreement can be amended from time to time.  The answer to such question is “yes.”  Although irrevocable and otherwise not amendable by the Grantor, the trust agreement usually allows for amendments or restatements to the trust agreement, including its dispositive and administrative provisions.  However the Grantor is unable to make such changes directly, and most often calls for a Trust Protector to effectuate an amendment to the Trust.
A Trust Protector can be any person or institution.  However, this person or institution cannot be anyone who has ever made a transfer to the trust.  Thus, the Grantor cannot be his or her own Trust Protector.  The Trust Protector’s powers are usually outlined with the trust agreement itself and, by way of example, often include such powers:
·         The ability to remove and appoint a Trustee;
·         The ability to change the location or governing law of the trust;
·         The ability to remove from the trust agreement any provisions which are no longer operative in the ongoing administration of such trust due to changed circumstances;
·         The ability to amend or restate the trust agreement to cope with changes in tax laws to achieve a more favorable tax status; and
·         The ability to terminate the trust.
Although a trust may be irrevocable, the Trust Protector’s role affords the Grantor the ability to have a trust agreement that can change and evolve to meet the changes both to the law and changes in the Grantor’s life.

Tuesday, November 29, 2011

Nevada Passes Legislation to Protect the Elderly

Nevada recently passed legislation to protect the elderly from exploitation on transfers of property after death.  Unfortunately, the elderly are often targets of financial exploitation. We often hear tragic stories of caregivers or others deceiving the elderly by fraud or undue influence and convincing them into leaving the exploiter a large inheritance. In its most recent legislative session, Nevada passed a law to protect the elderly from certain types of fraud and undue influence relating to transfers occurring after death.

The new law creates a presumption that a transfer occurring after the date of death is void if the recipient is:

a) The person who drafted the transfer document;

b) The transferor’s caregiver;

c) A person who paid or arranged for the drafting of the document; or

d) A person who is related to, affiliated with, or subordinate to anyone described in (a), (b), or (c).

The law provides that the presumption does not apply where the transfer does not exceed what the recipient would have received if the decedent died intestate or without a will. The presumption that the transfer is void can be overcome if a court determines by clear and convincing evidence that the transfer was not the product of fraud, duress, or undue influence.

We think the new statute is a positive change and we hope this new law will play a large role in protecting the elderly in the state of Nevada.


Monday, November 21, 2011

Gift Tax Opportunity...For a Limited Time Only!

This is not a sales advertisement. There are no echoing voices, special interest rates, nor any free no-name flat screen TV’s – but the ability to gift up to $5 Million is truly (probably) a limited opportunity.

The changes to the Federal estate and gift tax that were passed in late December, 2010, re-unified the estate tax and gift tax exemption amounts at $5 Million through the end of 2012. In 2013, the estate and gift tax exemption amount will return to $1 Million unless Congress changes the exemption prior to December 31, 2012. We have heard recent rumors that the Joint Select Committee on Deficit Reduction of Congress (the so-called “Super Committee”) may have suggestions for reducing the gift tax exemption from its current $5 Million level. This could happen before the end of the year in theory. If so, the change would be one year earlier than expected.

So what we thought was a limited opportunity to make lifetime gifts in excess of $1 Million may really be shorter than even originally expected.

But Why Should I Give Assets Away During Life?

Transferring assets with a lifetime gift is more favorable from a net tax perspective than relying upon transfers occurring upon death. This is because gift tax is calculated on the net value of the assets transferred (exclusive of the gift tax paid) while the estate tax is calculated by including all assets transferred including the money that will be used to pay the tax (tax inclusive). The uncertainty of the current exemption amount ($5 Million) and its duration makes today a unique opportunity that may not last.

Please consult with an experienced attorney for advice on how to make completed gifts to family members or friends within the confines of a trust in order to prevent unrestricted use of the gifted assets. There are also tax implications of the gift, such as the requirement of filing a gift tax return, that should be discussed with an attorney or CPA. When a lifetime gift amount is accompanied by other advanced estate planning techniques that our attorneys can assist you with, it is possible to greatly reduce or eliminate estate tax upon your death.


Friday, November 18, 2011

December AFR's Announced

December Mid-Term AFR - up from 1.20% in November.


Wednesday, November 2, 2011

Nevada Legislature Expands Applicability of "No Contest" Clauses

No contest clauses in a Trust and Will have been discussed previously in this blog. A no contest clause is a provision in a Trust or Will that provides that any beneficiary challenging the validity of the terms of the Trust or Will shall have his or her share reduced or eliminated. Nevada law has recognized the validity of no contest clauses with certain exceptions.

Along with these legal exceptions, many courts in the past have held that the actions of the beneficiary must directly relate to the Trust or Estate itself and/or an actual lawsuit must be filed in court in order for a no contest clause to be enforceable. The last session of the Nevada Legislature has expanded the existing law to make it clear that, with certain important exceptions, a beneficiary’s share may be reduced or eliminated under a no contest clause by conduct contrary to the express wishes of the Decedent as set forth in the Decedent’s Trust or Will. Under the new law, which is effective October 1, 2011, conduct by a beneficiary that could trigger a no contest clause may include, without limitation:

1. Conduct other than formal court action; and

2. Conduct which is unrelated to the Trust or Estate itself, including, without limitation:

a. The commencement of civil litigation against the Decedent’s Trust or probate Estate or family members;

b. Interference with the administration of another Trust or Estate or a business entity;

c. Efforts to frustrate the intent of the Decedent’s power of attorney; and

d. Efforts to frustrate the designation of beneficiaries related to a nonprobate transfer by the Decedent by operation of law or by operation of contract such as joint tenancy, payable on death designations, and contractual beneficiary designations.

However, the new law specifically states that a no contest clause will not be enforced if the beneficiary seeks only to:

1) Enforce the terms of the Trust or Will, any document referenced in or affected by the Trust or Will, or any other Trust or Will related document;

2) Enforce the beneficiary’s legal rights related to the Trust or Will, any document referenced in or affected by the Trust or Will, or any other Trust or Will related document;

3) Obtain a court ruling with respect to the construction or legal effect of the Trust or Will, any document referenced in or affected by the Trust or Will, or any other related Trust or Will.

Also a no contest clause is unenforceable, notwithstanding its terms, if the court finds that the challenge to the Trust or Will, any document referenced in or affected by the Trust or Will, or any other Trust or Will related document was made in good faith based on probable cause.

Except for these four exceptions, it is now clear under Nevada law that a beneficiary could see his or her share of the Trust or Estate reduced or eliminated via a no contest clause even though the actions of the beneficiary do not directly relate to the Trust or Estate itself and/or the beneficiary does not bring a formal action in court challenging the validity of the terms of the Trust or Will.

 - Attorney John Mugan

Thursday, October 27, 2011

Who Is Going To Make Your Decisions?

If you had a car accident or a medical emergency and were unable to talk, who would make medical decisions for you? Does this person know what types of life support or end-of-life care you want? Have you memorialized your decisions in writing? Does your family know where to find these documents? And does your physician know of your wishes?

Most families will at some time need to make medical decisions concerning the continuing care of an incapacitated family member. Documenting your medical, legal and spiritual decisions is an essential part of your estate planning. Your family should have powers of attorney for health care, living wills, wallet cards, and your medical documents should be on file with your physician and registered with the Nevada Secretary of State.

At Jeffrey Burr, our experienced attorneys can assisted you and your family through all aspects of medical decisions and will memorialize your family’s care plans with the most current and up to date governmental documents. With proper planning, you can be assured that your end of life wishes will be honored.

Call us, we are here to help.

 - Attorney James M. O'Reilly

Tuesday, October 25, 2011

Jeffrey L. Burr Speaking at ASDO Annual Conference-October 26th

Attorney Jeffrey L. Burr will be speaking at the Annual Conference of the Aging Services Directors Organization (ASDO) on Wednesday, October 26th.  The conference title is "Helping Caregivers - Legally, Medically, and Safely."  The conference is being held at the United Healthcare offices on North Tenaya.


Wednesday, September 28, 2011

October ARFs Announced

Tuesday, September 6, 2011

Tax-free IRA Charitable Gift Rollovers

The IRA rollover was first enacted in 2006 as part of the Pension Protection Act. The provision allows individuals aged 70 ½ and older to donate up to $100,000 from their Individual Retirement Accounts (IRAs) to public charities without having to count the distributions as taxable income. As part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the IRA Charitable Rollover has been reinstated through the end of 2011. Because the legislation expires on December 31, 2011, donors only have a few more months to take advantage of this opportunity.

You should consider this opportunity if:

- You are age 70 ½ or older;
- You have a traditional or Roth IRA (other plans such as 401(k)s, 403(b)s, SEP, KEOGH, and SIMPLE IRAs do not qualify);
- You do not need the assets currently held in your IRA(s);
- You would like to make a large one-time gift to charity;
- You are subject to the 2% floor on their itemized deductions;
- You do not itemize your deductions at all; or
- You plan to leave part or all of their IRA to charity upon your death.

What you should remember:

- You must be 70 ½ or older to qualify
- Only a direct transfer of the funds to the charity will work (ask the custodian of your IRA account for the appropriate form to request a direct transfer to charity)
- You can only give up to $100,000
- If you have not yet taken your Required Minimum Distributions, you may be able to partially or wholly satisfy that requirement through this type of gift
- There is no separate charitable deduction for this type of gift because of the income tax avoidance already occurring. The usual ceilings on charitable deductions (50% of adjusted gross income for cash, and 30% of adjusted gross income for capital gain assets) do not apply.
- The gift must be an outright gift to the charity. Donors cannot receive any personal benefit from the gift, and planned gifts like charitable remainder trusts or gift annuities do not qualify.

New legislation has been introduced to make the IRA charitable rollover permanent and to expand it such that the $100,000 limit would be lifted, and gifting could begin as early as age 59 ½. Additionally, the requirement that the gift be outright may also be lifted, allowing for gifts through charitable remainder trusts, etc. However, according to the law as it currently stands, the opportunity to make a direct gift from an IRA to charity without taxable income is only available through the end of this year, and you should consult with your attorney or tax advisor to determine whether this would be a good option for you.

 - Attorney Serena Baig

Tuesday, August 30, 2011

Trying to Protect Your Assets: Why Giving Money To a Family Member Does Not Work

With the current state of the housing market, many of us know of a friend, family member, or neighbor who is contemplating walking away from their home. Whether that person decides to enter into a short sale agreement or let the home fall into foreclosure, he or she may be aware of the potential liability associated with either decision. In an effort to avoid losing one’s assets due to such liability, a common scheme employed by the homeowner usually involves gifting large sums of cash or other valuable property to a trusted family member – spouse, adult child, parent, etc. Many are mistakenly led to believe that by giving the asset away that such asset becomes unreachable by the person’s creditor(s). Unfortunately, this scheme is what the law calls a fraudulent transfer/conveyance. What is more unfortunate is that this is such a common scheme that the creditor’s attorneys often begin their search for transfers such as these to successfully get those assets into their clients’ hands to satisfy outstanding liabilities.

There are two types of fraudulent transfers: (1) those made with the actual intent to defraud and (2) those made under circumstances that constitute constructive fraud. Actual fraud exists when the debtor accomplished the transfer with the actual intent to hinder, delay or defraud a creditor. A debtor’s intent is often established indirectly by what are known as the “badges of fraud.” A partial list of such badges of fraud, found both in the Nevada Revised Statutes (“NRS”) and in common law, is as follows:

• Transfer was to an insider ( e.g., a family member);

• Debtor retained possession or control of the property transferred after the transfer (ex. Debtor transferred title to his home to a family member or entity but continued to reside in the home);

• Transfer was undisclosed or concealed;

• Before the transfer was made, the debtor had been sued or threatened with a suit;

• Transfer constituted substantially all of the debtor’s assets;

• Debtor absconded (ex. Debtor fled to an offshore jurisdiction);

• Debtor removed or concealed the assets (ex. Debtor puts assets in an anonymous “private vault”);

• Debtor was insolvent or became insolvent before or shortly after a substantial debt was incurred;

• Transfer occurred shortly before or shortly after a substantial debt was incurred; or

• Debtor transferred the essential assets of the business to a lienor, who transferred the assets to an insider.

With constructive fraud, the debtor does not have to have had the intent to hinder, delay, or defraud his or her creditors. A creditor most often proves constructive fraud simply by demonstrating that the transfer was made when the debtor was insolvent or became insolvent as a result of the transfer.

The determination of insolvency is the most important factor in determining whether a transfer is voidable as either actual fraud or constructive fraud. Determination of insolvency generally rests on whether a debtor’s liabilities exceed his assets. In determining insolvency, a mistake made by debtors, and at times by professional advisors, is the inclusion of assets that are not available to satisfy creditors’ claims because such assets are otherwise exempt from execution. Thus, transfers made as part of a comprehensive asset protection plan may sufficiently reduce a client’s assets so as to render the client insolvent. Such assets that would not be included in the determination of insolvency due to the exempt nature of the asset include but are not limited to:

• Exempt property such as an interest in a spendthrift trust;

• Property transferred, concealed or moved to defraud creditors; and

• Exempt property under Federal or state law (e.g., IRA’s, homesteads, etc.; see NRS 21.090 for Nevada state specific exempt assets).

Although the stumbling block to asset protection planning known as the fraudulent transfer may seem great, at Jeffrey Burr, Ltd, we have the knowledge necessary to assist our clients with an effective asset protection plan which significantly reduces or even negates the power of the fraudulent transfer attack.

 - Attorney A. Collins Hunsaker

Friday, August 26, 2011

Providing Long-term Healthcare Assistance for Loved Ones in Tough Economic Times

Earlier this year, A study done by Genworth Financial, Inc. reported that nursing home costs in Nevada are more than $4,000 a year above the national median. In Nevada, a private room in a nursing home carries a median rate of $82,125 per year.* Given the current economic situation in Nevada, expensive nursing home costs can be devastating for families. Families are forced to balance a desire to provide quality care for a loved one with the economic realities of high healthcare costs and a depressed economy.

Loved ones must be cautious as high healthcare costs can deplete savings in a short period of time. Fortunately, there is help. Families can find some relief through Medicaid where the family is unable to bear the costs to provide for a loved one. However, families should be aware that applying for state assistance can be complicated. Medicaid has specific rules and requirements that must be satisfied in order to receive aid.

Family members providing long-term healthcare assistance for other family members in these tough economic times must also remember to take care of themselves. Providing care for an ageing or disabled family member is not only financially draining, but can also be emotionally draining. Family members, especially spouses, must not attempt to do more than is physically possible. This can lead to financial ruin or physical exhaustion. It is often not possible to provide adequate care alone. Even though economic times are tough, it is important to seek help.

Jeffrey Burr Ltd. has a full service Elder Law division that is available to assist you in helping you with all your Medicaid and long-term health care assistance. We are happy to answer any questions you may have.

*Source: Genworth Financial Press Release, Home Care Costs in Nevada Rising Faster than Nationally, Finds Genworth's Annual Cost of Care Survey, Genworth Financial, Inc., May 10, 2011.

 - Attorney Corey Schmutz

Wednesday, August 24, 2011

September AFR's Announced

September 2011

Applicable Federal Rate

Annually, Semi-Annually, Quarterly, Monthly

Short-Term 0.26, 0.26, 0.26, 0.26
Mid-Term 1.63, 1.62, 1.62, 1.61
Long-Term 3.57, 3.54, 3.52, 3.51


http://www.irs.gov/pub/irs-drop/rr-11-20.pdf

Tuesday, August 23, 2011

Delaying Estate Planning - It's Not Really That Bad

Recently, it seems that I’ve lost more than my share of clients. Death is a part of our business, but it still troubles me sometimes. Two clients in particular come to mind that recently passed unexpectedly. One client was living in life’s sunset and he certainly experienced a full life. The other died very prematurely leaving young children and unfinished business.

In all cases, I am glad that the client found the time and allocated their resources to come in and prepare an estate plan. I hope that our work will make things easier for their families. It makes me wonder if I would have a Will in place if I could not easily prepare my own?

I feel like I am always borrowing something for my blog posts from other sources – but I found this blog post from CNBC about people procrastinating about preparing a Will. The numbers that were shared were surprising, even to me:

• In a recent survey, only 57% of people surveyed have Wills in place.

• For individuals under 35, only 10% of people have a Will.

• For individuals between 45 and 64, only 44% of people have a Will.

• And for individuals over age 65, the survey found that 20% of respondents still did not have a Will.

The best part of the blog discussing the survey stated that one in three of the respondents would rather experience the following instead of creating a Will: 1) Prepare a tax return 2) have a root canal 3) give up sex for a month.

So, for you faithful readers of the Jeffrey Burr Blog (all seven of you), statistically at least a few of you do not have a Will. So, let’s get it done, but let’s also not ignore our dental health, tax deadlines, and consortium.

 - Attorney Jason Walker

Monday, August 8, 2011

Specific Bequests: Potential Ademption Problem

Trusts and Wills often provide that a particular asset pass to a certain beneficiary. Such a bequest is a “specific bequest” in that it is satisfied only by receipt by the beneficiary of the specific, particular property identified in the Trust and Will. For example, a person leaves “100 shares of my Apple, Inc. stock to my daughter, Kathryn.” What happens if at the time of death, the decedent or his or her Trust no longer owns any Apple stock? Generally speaking, if specifically bequeathed property, such as the Apple stock in this example, is not in the decedent’s Trust or estate at the time of death, the bequest is adeemed, the bequest fails and the beneficiary receives nothing. This is known as “ademption”, namely the failure of a bequest because the property is no longer in the decedent’s Trust or estate at the time of his or her death. In this example, Kathryn would receive nothing. It is essential that if the decedent does not wish the bequest to adeem, the Trust or Will must clearly indicate this intent. An example of such stated intent would be:

“In the event I no longer own any shares of Apple, Inc. at the time of my death, this bequest shall not adeem but my daughter, Kathryn, shall receive in cash an amount equal to the closing value of 100 shares of Apple, Inc. as of the date of my death or as of the most recent trading day preceding my death.”

Other questions could arise even with the inclusion of the above language. For example, what if Apple, Inc. or its assets are acquired by a separate corporation prior to the date of death in such a fashion that the corporate entity Apple, Inc. no longer is in existence on the date of death? Does the bequest then adeem, or does Kathryn receive in cash an amount equal to 100 shares of the corporation that acquired Apple or its assets? Again, the Trust or Will needs to clearly state the intent of the decedent in the event of such contingencies.

Contrast this with a general bequest of a specific dollar amount such as where the Trust or Will provides for a bequest of “Thirty-five Thousand Dollars ($35,000.00) to my daughter, Kathryn.” In this latter situation, it makes no difference whether the decedent still owns any Apple stock or not as the general bequest of Thirty-five Thousand Dollars ($35,000.00) to Kathryn will be satisfied out of the cash or liquid assets of the Trust or Estate or by the sale of other general assets of the Trust or Estate. However, although Kathryn would receive the general bequest of Thirty-five Thousand Dollars ($35,000.00), she would not share in any appreciation (or depreciation) in the value of Apple, Inc.

Accordingly, it is important that an estate planner insure that the client fully understands the pros and cons of providing for a specific or a general bequest. It is most important that the client’s Trust and Will clearly state his or her intent so that such wishes and desires are not defeated by future events arising after the Trust and Will is executed but prior to the date of death.

Wednesday, August 3, 2011

Federal Benefits Paid Electronically or by Debit Card

The Treasury Department now requires all future federal benefits, including Social Security and VA, to be paid electronically.

If you already receive electronic federal benefit payments, there is nothing further you need to do. You will continue to receive your benefit payments on your payment date as previously scheduled.

However, if you presently receive a federal benefit by way of a paper check, you will have only until March 1, 2013, to switch to an electronic payment option - meaning your benefit payments will be made by an electronic direct deposit to your designated bank account.

But what if you don’t have a bank account, or you don’t make a timely designation of your preferred account? In that event, effective March 1, 2013, you will receive your benefit payments via a Direct Express Debit MasterCard© card. Direct Express© is a pre-paid debit card. Your benefit payments will simply be credited to your debit card on your payment day each month. There will be no sign-up fees and no monthly service fees. However, if you sign up for elective optional services, these additional services will be subject to monthly service charges.

If you now wish to convert your paper checks to electronic direct deposits to your bank account, you may:

• Call the US Treasury Processing Center at (800) 333-1795

• Sign up on-line at www.GoDirect.org

• Visit your bank or credit union. Most financial institutions can now initiate your direct deposit agreement with the Treasury Department


Sunday, July 17, 2011

News from Jeffrey Burr

There are a lot of changes here at Jeffrey Burr.

First for the good news, we are excited to announce the addition of three new attorneys to our firm. They are Craig D. Burr, Collins Hunsaker and Corey Schmutz.

Craig is a long time Nevada attorney who was the head of our Probate and Guardianship Department for several years ending in 2005. He has decided to rejoin us to again lead our Probate and Guardianship Department.

Collins Hunsaker is a licensed Nevada attorney who obtained his Juris Doctor Degree and his Masters of Law in Taxation (L.L.M.) from Chapman University. Collins will be working as an Estate Planning Attorney.

Corey Schmutz is a licensed Nevada attorney who obtained his Juris Doctor Degree from the University of Nevada, Las Vegas, and his Masters of Law in Taxation (L.L.M.) from the University of San Diego. He is a former Judicial Extern to Wesley Yamashita, the Clark County Nevada Probate Commissioner. Corey will be working mainly in the Probate, Elder Law and Guardianship areas.

They are all quality individuals and have the background we expect our attorneys to have.

Now for other news, three of our attorneys, David M. Grant, Mark L. Dodds and Robert M. Morris have left the firm to start their own law firm. We thank them for their efforts here and wish them well in their new endeavor. All of their cases have been assigned to other competent attorneys at our firm.

One benefit you enjoy by selecting the firm of Jeffrey Burr is knowing that regardless of a transition in personnel, we will always have several experienced, qualified attorneys and a knowledgeable, friendly staff who will be here to assist you with your vital estate planning and probate needs.

As you may know, the firm of Jeffrey Burr has been serving the Southern Nevada community since 1981. We currently have 22 staff members and 9 attorneys – many of whom, in addition to being an attorney, are either a certified public accountant or have an advanced tax degree.

We thank all of our clients and referral sources for the confidence you have placed in us to meet your estate planning and probate needs. We look forward to continuing to provide exemplary services to our valued clients.

 - Jeffrey L. Burr

Thursday, June 30, 2011

Asset Protection and Divorce

If any of you are going through the unfortunate process of a divorce, it’s important that you preserve any asset protection planning you have done with our office by having special language included in the Marital Settlement Agreement and Divorce Decree regarding your Nevada On Shore Trust. Here is some sample language that we’ve used in the past:

“It is the intent of the parties to maintain, to the extent practicable, the integrity and the enforceability of the [NAME OF NOST], an irrevocable trust, for their mutual benefit. The parties acknowledge and understand that to effectuate the provisions of this agreement it may be necessary to effectuate trustee to trustee transfers between the above referenced trust rather than to either party individually under the terms of the respective trust, including but not limited to the specific section of the trust entitled “Trustee Actions”. The parties hereby agree to jointly seek an appropriate order from the Court authorizing such distribution to themselves as trustees.”

 - Attorney Jeffrey L. Burr

Thursday, June 23, 2011

July AFR's Announced

Wednesday, June 22, 2011

New Updates to the Self-Settled Spendthrift Trust Laws:

Nevada’s self-settled spendthrift trust laws have long been considered the most favorable of the thirteen states allowing these types of trusts. (See NRS 166 for the laws pertaining to the “Nevada On-Shore Trust,” as we like to call it, or “NOST”). This is because Nevada has the shortest statute of limitations period and has no statutory exceptions allowing certain creditors such as divorcing spouses, preexisting tort creditors, etc. to pierce the trust.

On June 4, 2011, Governor Sandoval signed SB 221 into law, which makes our spendthrift trust laws even stronger. The changes to the statutes, which are discussed in further detail below, will become effective on October 1, 2011.

1. Expansion of the types of trusts that qualify

Under the new language, a charitable remainder trust, a grantor retained annuity trust, and a qualified personal residence trust all qualify as a NOST.

2. Clarification of settlor’s ability to use property owned by the NOST

If a NOST owns real or personal property, the settlor is now explicitly permitted to use that property without decreasing the protection offered by the NOST.

3. Tacking of statute of limitations period for trusts changing situs to Nevada

If a non-Nevada spendthrift trust is domiciled in a state with substantially similar spendthrift laws to Nevada’s, and the trust’s domicile is properly changed to Nevada, the statute of limitations period does not have to be restarted. The transfer date will be deemed to date back to the actual date of transfer to the trust, or the date on which the laws of the non-Nevada jurisdiction became substantially similar to those of Nevada.

This new provision will allow individuals who have established asset protection trusts in other states with less favorable laws to change the situs to Nevada without restarting the statute of limitations.

4. Trustee liability limited

Currently, Nevada law already protects an advisor to the settlor or trustee of a spendthrift trust from claims unless the claimant can prove by clear and convincing evidence that the advisor knowingly and in bad faith violated Nevada law, and that his actions directly caused damage to the claimant. The new legislation now also protects the trustee of a spendthrift trust unless the claimant can make the same showing as to the trustee.

5. “Last in, First Out”

The new laws clarify that, when a settlor makes more than one transfer to the NOST, a more recent transfer will not result in the earlier transfers becoming accessible to creditors if they would otherwise be protected due to the statute of limitations.

Additionally, any distributions made from the NOST will be considered to have come from the most recent transfer, leaving older “seasoned” transfers in the trust and protected.

6. Decanting Spendthrift Trusts

Under the new law, the trustee of a NOST may decant the trust into another spendthrift trust without affecting the statute of limitations period applicable to the assets in the original trust.

7. Limitations of actions against a spendthrift trust

Until now, it was unclear whether Nevada’s four year Statute of Limitations period for fraudulent transfers would negate the favorable two-year rule under Nevada’s spendthrift trust provisions. Now, it is clear that no action may be brought against the NOST’s trustee at law or in equity if, at the date the action is brought, an action by a creditor with respect to a transfer to the NOST would be barred.

Additionally, in order to bring an action as to a transfer to a NOST, the creditor will have to prove by clear and convincing evidence that the transfer (i) was a fraudulent transfer, or (ii) violates a legal obligation owed to the creditor under a legally enforceable contract or valid court order.

8. Unauthorized agreements by Trustee are void

The new legislation clarifies that the settlor only has rights and powers conferred specifically in the instrument, and any agreement between the settlor and trustee attempting to grant or expand those rights is void. This provision strengthens the use of the NV self-settled spendthrift trust as a completed gift trust, which will bolster its use as an estate tax savings tool for some clients.

 - Attorney Serena Baig

Monday, June 20, 2011

Mark's Theory of Large Numbers

Through years of working with people in their estate planning and financial matters, I have come to conclude that we as humans may understand that the number 1,000,000 is a fairly large number; however, when we see the number 10,000 we think that is a large number as well. We see them both as large numbers and so often do not appreciate the extent of the difference between the two. For example, if I explain that my fee for an estate plan which is designed to save $1,000,000 in taxes will cost $10,000, the prospective client will just see the fact that 10,000 is a large number and, although $10,000 spent with an expected return in tax savings of $1,000,000 seems a good return on one’s investment (i.e. 100 to 1), often the client will decline the services on the basis that $10,000 is a big number and not on the basis that it is small in comparison to the expected tax savings.

It seems our misunderstanding of the significance of large numbers carries over into our reactions to our ever-escalating federal budget deficit. There was a time when $1,000,000 seemed like a pretty significant amount of money. However, these days, when speaking of budgets, the only number that gets anyone’s attention is a number with “trillion” after it. There was a time, not long ago, when we were aghast at the prospect of a deficit of, say, $50 billion. In the month of February, our deficit exceeded $50 billion PER WEEK. But what’s the difference now, billions or trillions, it’s just another very large number that we don’t fully understand. We can see it on paper, but we cannot comprehend the difference between a billion versus a trillion. A few years ago the president challenged his cabinet to come up with savings of $100,000,000 from their budget requests. $100 million seems like a lot. But in fact, $100 million is equal to 16 hours of interest on a $1 trillion deficit (and our deficit is about $14 trillion). The federal government cutting its budget by $100 million is like a family earning $75,000 cutting its annual budget by about $1.75. It’s the equivalent of telling your spouse to buy the generic box of Cocoa Puffs instead of the name brand and calling it a year for budget balancing!

Maybe comparisons like this can help us understand a little better the difference between millions, billions and trillions. Who would have ever thought we would see S & P cut the federal government’s AAA borrowing rating from “stable” to “negative” but this is what happened today. Someone in Congress better learn to understand the significance of large numbers.

Thursday, June 9, 2011

Planning Considerations for Families with Special Needs

Part of any effective estate plan is considering the possibilities of special needs of immediate or extended family member.

Did you know:

  • One out of 9 children under the age of 18 in the US today receive special education services;
  • Out of 72.3 million families included in the 2000 Census, about 2 in every 7 reported having at least one member with a disability;
  • 20.9 million families have members with a disability;
  • Of the 20.9 million families reporting at least one member with a disability, 5.5 percent have both adults and children with a disability;
  • One in every 26 American families reported raising children with a disability;
  • One in every three families with a female householder with no husband present reported members with a disability;
  • An estimated 2.8 million families were raising at least one child aged 5 to 17 with a disability.*
* Source: “Disability and American Families: 2000”, US Census Bureau, July 2005 Report.

With data like this, it is extremely important to consider the current and future needs of potential estate beneficiaries. Often this will include the creation of an independent special needs trust or a special needs trust as a sub trust of a larger estate plan.

To distinguish a special needs trust, a first party special needs trust is one that is created with the special needs individual’s own funds and with court approval. A first party special needs trust will require a state Medicaid payback upon the death of the beneficiary. In contrast, a third party special needs trust is created with a third party’s funds (e.g. parent, grandparent) and does not require court approval nor a state Medicaid payback, as long as the trust corpus is not considered a countable resource for needs based state assistance.

Care should be taken in the preparation of any special needs trust to insure if necessary that court approval is sought. In cases where court approval is not necessary, proper planning will insure that the trust corpus does not become a countable resource for state and federal benefits that may be available for those with special needs.

Jeffrey Burr Ltd. has a full service Elder Law division that is available to assist you in proper special needs planning and is happy to answer any questions you may have.

Thursday, June 2, 2011

SPOTLIGHT Senior Expo - June 3rd

Jeffrey Burr Elder Law Services will be attending the SPOTLIGHT Senior Expo on Friday, June 3rd from 9:00 am - 1:00 pm at Spring Valley Hospital Medical Center.  We will have a table setup and available to answer any questions you may have on estate planning and elder law services.

Wednesday, June 1, 2011

Top 5 Reasons To Use An Attorney

The following posting is borrowed from the May 2011 issue of Vegas PBS Source Magazine, as written by Attorney David M. Grant:



“It can seem daunting when beginning the process of making out a last will & testament, revocable trust, and powers of attorney. As one starts down this important, yet often intimidating course, increasingly people are wondering if they can do it themselves or should they use an attorney. Here are the top 5 reasons why you should use an attorney:

1. Experience. An attorney experienced in estate planning can tell you what to expect in terms of timelines, costs, taxes, and family issues that could arise.

2. Objectivity. On your own, it can be almost impossible to remain objective since estate planning decisions are so fraught with emotion.

3. Special skill. Estate planning specialists are specially trained in what they do. They understand important legal nuances and are able to bring together complex federal and state laws to make your plan work.

4. Protection. Doing it yourself, often leads to the payment of higher taxes, expensive probate proceedings, litigation and fighting between heirs, and increased opportunities for creditors attack. Don’t be “penny wise and pound foolish.”

5. Peace of mind. Knowing your financial affairs will be handled correctly leads to a profound sense of “inner peace.”

Wednesday, May 25, 2011

Morris and Grant to Present at Upcoming Seminars

Attorneys Robert L. Morris and David M. Grant will be presenting at the following legal seminars:


June 6th - “Trust Termination & Legal Ethics,” National Business Institute Seminar on Trust Administration and Preventing and Litigating Fiduciary Liability, to be presented in Las Vegas, NV on June 6, 2011. For more information go HERE.

June 24th - “Estate Planning in Light of Recent Tax Law Changes & Nevada Legislative Update,” State Bar of Nevada 2011 Annual Meeting, to be presented in Kauai, HI on June 24, 2011. For more information go HERE.

Monday, May 23, 2011

Just for Vets ~ Non-Service Related Pensions

Two little-known benefits available to vets or their widows are the Improved Pension and the Aid and Attendance Program.

The Improved Pension is an asset and income based program available to vets or their widows whose assets and income are below certain levels as adjusted annually for inflation.

The Aid and Attendance Program provides additional benefits if the vet or widow is age 65 or older and is permanently and totally disabled. Anyone requiring nursing home care is automatically considered disabled for purposes of qualifying for this program.

Eligibility for either program requires the vet to have served 90 days of active service with at least one day of service during wartime with no dishonorable discharge. Vets who entered service after September 8, 1980, may have a longer minimum period of service.

The benefit levels for 2011 are as follows:

  • Up to $1,644 per month for a single veteran
  • Up to $1,949 per month for a married veteran or a veteran with one dependent
  • Up to $1,057 per month for an unmarried widowed surviving spouse
These are valuable benefit programs for American vets. If you or someone in your family is eligible for these enhanced VA benefits, the VA will assist in helping you qualify.

For more information, go to www.vba.va.gov/

 - James M. O'Reilly, Certified Elder Law Attorney

Thursday, May 19, 2011

June AFRs Announced

Nice little drop...For the month of June 2011 the Applicable Federal Rates will be as follows:





In June the 7520 rate will drop to 2.8% from 3.0% where it was in May. To go directly to the IRS' publication of these rates, please visit the following website: http://www.irs.gov/pub/irs-drop/rr-11-13.pdf.

Wednesday, May 18, 2011

Comparison of Portability and Exemption Trust

Last week, I prepared and gave a presentation to the Financial Planning Association of Nevada on some of the details of the 2010 Tax Act and its impact on estate planning. One interesting thing that I came across in preparing my presentation was a comparison of an estate relying on the new portability provisions versus utilizing an “A-B”, “Bypass”, or “Credit Shelter trust. “

The assumptions are as follows:

• Married Couple with a $10 Million estate
• Husband dies in 2011
• Wife dies in 2019
• 2% rate of inflation
• 5% return on assets

The original source of the chart and calculations may be found here on page 40-42.


This example shows the power of capturing the appreciation of the assets in the credit shelter trust. Of course, various factors could affect the calculations, including inflation rate, changes in the Capital Gains rate, and an assumption that the Estate Tax rate will remain at 35%.

Wednesday, May 11, 2011

Jeffrey Burr Named as Preferred Estate Planning Firm

We are pleased to announce that the law firm of Jeffrey Burr has been selected by Legacy Quest as its preferred estate planning provider. Attorneys at Jeffrey Burr were selected by Legacy Quest, from among their competitors, based upon the firm’s long-running reputation for providing high quality, specialized services in the estate planning area.

Legacy Quest offers the Legacy Planner, a system for preserving and shaping a person’s legacy. The Legacy Planner is a first-of-its-kind planning tool used to assists individuals in better organizing their personal and estate information. It provides a structure for helping record personal histories, memories and letters, and includes a system for assembling genealogical information, final plans and directives, and other important financial and estate documents. Legacy Quest was started in 2009 by Hyrum Smith, one of the founders of Franklin Covey, the company behind the Franklin Day Planner.

It is truly an honor for our firm to be recognized as the preferred estate planner by the renowned people behind this innovative company.

Monday, May 9, 2011

Disposition of Tangible Personal Property By List or Statement - What Is "Tangible Personal Property"?

Nevada, like most states, permits a person’s Last Will And Testament and Trust to refer to a separate, written statement or list to dispose of “tangible personal property” not otherwise specifically disposed of by the terms of the Last Will And Testament or Trust. In this regard, the question often asked is “What is tangible personal property that can be disposed of by such a written statement or list?” The applicable Nevada statute attempts to answer such question by defining certain tangible personal property that cannot be disposed of by such a written statement or list, namely “money, evidences of indebtedness, documents of title, securities and property used in a trade or business.” NRS 133.045. Accordingly, a person should never attempt to dispose of “money, evidences of indebtedness, documents of title, securities and property used in a trade or business” via a written statement or list. Examples of these items are cash, financial accounts, promissory notes, deeds of trust-mortgages, stocks, bonds and real estate.

Common examples of tangible personal property that can be disposed of by such a written statement or list are furniture, furnishings, rugs, pictures, books, silver, linen, china, glassware-crystal, objects of art, wearing apparel, jewelry and guns. One of the most common examples of property disposed of by a written statement or list is the wedding and engagement rings of the testator passing to a particular daughter or granddaughter.

Some of the advantages of using such a written statement or list are that it can be prepared before or after the execution of the Last Will And Testament and Trust, and it can be altered by the testator after the list has first been prepared. However, one must be careful to abide by the legal requirements of a valid written statement or list under Nevada law such as the statement or list must contain the date of its execution, the statement or list must contain a reference to the Last Will And Testament or Trust, et cetera.

The attorneys at Jeffrey Burr Ltd. have many years of experience in estate planning, and always inform clients of their option of disposing of part or all of their “tangible personal property” via a written statement or list. In the event a client wishes to utilize such a written statement or list, we insure that such statement or list is valid, enforceable, and carries out the wishes of the client.

 - Attorney John Mugan

Wednesday, May 4, 2011

What Is a Trust?

Stupid question, right? Everyone knows what a trust is…or do they? Some people wrongly assume that a trust is an entity, like a corporation or limited liability company. While many states do recognize an organized business trust entity, the vast majority of trusts are not technically recognized as entities by the state. Simply stated, a trust is an agreement whereby property is held and administered by one person for the benefit of another.

There must be at least three parties to every trust agreement: the settlor, the trustee, and the beneficiary. The settlor is the person who forms the trust by contributing property to the trust agreement. Such property is known as the trust corpus or trust res. Sometimes a settlor is also referred to as a trustor, grantor, donor or creator. The trustee is the person who holds the trust corpus for the benefit of another. The beneficiary is the one for whom the trust corpus is held, and the one to whom distributions are made.

On a more academic level, a trust is created (or settled) when the title to property is split into two parts: legal title and beneficial title. Legal title refers to the ownership interest of a trustee. One who has legal title to property has the right to hold, possess, and deal with such property. Beneficial title, on the other hand, refers to the ownership interest of a beneficiary. One who has beneficial title has the right to enjoy the benefits of the property. Before the trust is ever formed, and title is thus bifurcated, the settlor will generally possess both legal and equitable title, or absolute title.

In common law jurisdictions, trust agreements are governed by the terms of the trust document, or trust indenture as they are sometimes called. The trustee is obligated to administer the trust in accordance with those terms as well as in accordance with governing law.

Common law trust doctrine first developed in the 12th and 13th centuries when landowners leaving England to fight in the Crusades would convey ownership of their land to a friend or family member, with the understanding that title would be conveyed back upon the Crusader’s return. Today, trusts are commonly used as testamentary devices (e.g., living trusts) or as tools to achieve one’s tax planning and asset protection objectives. Whatever a person’s legal needs may be with respect to property, it is almost certain that solutions can be found through the use of trust agreements.

 - Attorney David M. Grant

Monday, May 2, 2011

Large IRAs and Portability Under the 2010 Tax Act

Owners of large IRAs prior to the 2010 Tax Act generally had to decide between the income tax benefits of leaving the IRA to his or her spouse and the potential estate tax benefits of leaving some or all of the IRA to a credit shelter trust or a trust for children or grandchildren. Now, portability may allow owners of large IRAs to name the spouse as the beneficiary of the IRA while still preserving the owner’s unused estate tax exempt amount to be transferred to the surviving spouse.

Rules for IRAs with the Surviving Spouse as Beneficiary
When an individual with an IRA dies, leaving the surviving spouse as the beneficiary, the survivor has three options, all of which could have positive income tax results:

1. Roll the IRA into his or her own IRA, which allows the survivor to wait until he or she reaches the age of 70 ½ before having to take minimum distributions.

2. Keep the IRA as an “inherited IRA,” which allows the survivor to wait until the deceased spouse would have reached 70 ½ before taking distributions.

3. Convert the IRA to a Roth IRA, which has no required distributions during the lifetime of the survivor.

The problem with these options is that, if the survivor is the named beneficiary of the IRA, and the deceased spouse does not have sufficient assets to maximize his or her estate tax exemption, the exemption of the first spouse to die could be wasted.

Maximizing the exemption before the 2010 Tax Act
In order to avoid wasting the exemption, many couples were either naming another individual as a beneficiary of their IRAs, or they were leaving all or a portion of their IRAs to a credit-shelter trust in order to preserve the exemption of the first spouse to die.

A number of disadvantages and complexities arise when leaving an IRA to a trust, such as:

1. If you are only leaving a portion of the IRA to a trust, preparing a formula beneficiary designation is complicated and may not be accepted by the IRA custodian.

2. The IRA benefits will have to be paid over the life expectancy of the oldest beneficiary of the trust, which is usually the spouse. If the payments are distributed to the spouse, they will be included in the spouse’s estate. If they are distributed to other beneficiaries, the spouse will not benefit from the IRA. If they are accumulated, the compressed income tax rates applicable to trusts will apply.

Another option would be to name the family trust as the primary beneficiary, allowing the survivor to disclaim the proceeds to a disclaimer trust at the first spouse’s death. However, the spouse would have to decide whether to give up the potential estate tax benefits of fully funding the credit shelter trust and disclaiming the IRA and giving up the income tax benefits of the spousal rollover. Additionally, the spouse would not be able to have any power of appointment over the disclaimer trust.

After the 2010 Tax Act
Now, with the 2010 Tax Act allowing for a $5 million exemption per person, the unused portion of which can be transferred to the surviving spouse, the problems set forth above may be largely solved. The IRA owner can name the spouse as the beneficiary, with all the income tax benefits which come with that option. Any amount of unused estate tax exemption will be transferred to the survivor to use upon his or her own death. Not only will this preserve the estate tax benefits which were only previously preserved by the methods outlined above, but the planning will also be simplified for owners of large IRAs who do not have sufficient other assets to fully fund a credit shelter trust.

As we know, portability is only in effect for 2011 and 2012. In the event that portability is not extended or made permanent, the other methods to preserve the first spouse’s exemption will have to be revisited. For the next two years, however, IRA owners without sufficient nonretirement assets to fully utilize their estate tax exempt amounts should consider whether it would be desirable to name the spouse as beneficiary in light of the availability of portability.

Wednesday, April 20, 2011

May 2011 AFRs Announced

Very little change will be seen from April to May in the federal AFR. For the month of May 2011 the AFRs will be as follows:

In May the 7520 rate will remain unchanged at 3.0%, for the third month in a row. To go directly to the IRS' publication of these rates, please visit the following website: http://www.irs.gov/pub/irs-drop/rr-11-11.pdf.