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Las Vegas Estate Planning Law Blog

What is probate and how do I manage the process?

We often write on our Las Vegas estate planning law blog about probate. Usually we do so in the context of discussing how to avoid probate through careful estate planning. But for those whose loved ones' estates must go through probate, let's take a few moments to look at just what probate is and what happens during the process. This is just for general information, and is not intended as specific legal advice.

Probate is simply the name for the process in which a court oversees the distribution of a deceased individual's assets. The court will take stock of the property left behind, figure out who is entitled to it and make sure state law is followed in terms of who gets what. There will also be taxes and perhaps lingering debts to pay. If there is a valid will naming an executor, the court will make that appointment formal, otherwise the court will identify someone to serve as the executor.

A will is important, but comes with limitations

James Gandolfini was larger than life in his starring role as Tony Soprano on HBO's "The Sopranos" for many years. His death just over a year ago left many Las Vegas fans of the hit show stunned and reeling from the loss of such a talent. Unfortunately, in the time since his death, we've seen how a lack of careful estate planning can leave one's heirs reeling as well.

It's not that Gandolfini didn't take any estate planning measures during his adult life. He did leave a will which outlined his wishes regarding distribution of property among his surviving family members. He did not, however, provide adequate instructions for property he owned in Italy.

Updating estate plans to include heirs

We often talk on our Las Vegas estate planning law blog about the importance of keeping one's will and other estate planning documents up to date. Changes in one's family life, employment or financial status may all require revisions to a plan in order to ensure that one's assets are distributed in accordance with one's wishes. But there is another side to keeping plans and documents current, and that is talking about the changes with one's family and heirs.

Particularly among families of wealth, a recent study has found that communication along these lines is lacking. While over 80 percent of individuals surveyed did have wills that they kept current, almost half of them hadn't had a conversation with their heirs about what their inheritance would consist of. The reasons for this varied, but nearly two in three said they didn't want their children to count on inherited wealth or feel entitled to it (a phenomenon our blog has discussed in previous posts).

A closer look at the gift tax in estate planning

In our last blog post, we discussed how the federal estate tax took a significant bite out of Philip Seymour Hoffman's estate after the actor's untimely death. As we reviewed why this happened and how Las Vegas residents can avoid a similar situation, we briefly mentioned utilizing the gift tax exemption as a strategy to reduce tax liability. The gift tax exemption is an important element of tax and estate planning law which merits some additional examination in its own right.

According to the IRS website, the gift tax is a tax paid by someone who makes a gift of any kind of property or money to another individual. A "gift" in this context means a transfer where the giver does not receive full consideration in exchange. Generally speaking, and perhaps surprising to Las Vegas residents, any such gift is taxable. But there are some important exclusions from the gift tax.

Over 40 percent of actor's fortune consumed by estate tax

It has been less than half a year since the death of actor Philip Seymour Hoffman from a drug overdose. Las Vegas film fans will remember the shocking news of this Oscar-winning performer's unexpected passing. And as with many relatively young people (Hoffman was in his mid-40s) who die suddenly, Hoffman's estate plan offers some lessons to Las Vegas residents considering tax ramifications in estate planning.

Hoffman was never married to his partner with whom he had three children, yet he insisted that his entire $35 million estate be left to her because he wanted to avoid the perceived "trust fund baby" syndrome in his children (a phenomenon our Las Vegas estate planning law blog discussed back in early June). Because they were not married, however, roughly $15 million will go to the IRS, leaving the mother of Hoffman's children with around $20 million.

As Lou Reed's will goes through probate, details go public

The idea of a last will and testament is something ingrained in the minds of Las Vegas residents and people all over this country. After death, the will is read and assets are distributed accordingly. Sounds pretty simple, right? The fact is that this idealistic scenario glosses over a lot of those details that make real life so much more complex.

Take, for example, the recent death of the famous musician Lou Reed. Reed left what some might consider a pretty thorough estate plan in the form of a will -- just under 35 pages long at that. The will essentially divided up his assets between his wife and sister. No small feat when one considers that we are talking here about an estate worth a minimum of $30 million and continuing to grow, thanks to revenue from Reed's publishing, copyright and other business deals.

Probate judge rules heirs out $400,000 due to IRA form error

Las Vegas residents often encounter a simple message here on our blog and elsewhere. The message is that it's important to keep estate planning documents up-to-date. Maybe this point is just so obvious that some fail to register the serious consequences that can occur during the distribution of assets if, for example, a beneficiary form has been filled out incorrectly or not updated.

In one case, a man had been fighting cancer for years. He had remarried late in life, two months before his death in 2008, in fact. But he wanted his children (now adults themselves) to be the beneficiaries of his retirement accounts. So he updated his will to specify the distribution.

Judge rules on will contest between prominent, wealthy families

Recently a major legal dispute over an inheritance came to a close. Las Vegas residents interested in estate planning and related issues may be interested in the details available about newspaper and magazine mogul Robert B. Cohen and the will contest pursued by his granddaughter Samantha. Samantha is the daughter of Cohen's daughter Claudia and Ronald Perelman, billionaire investor and chairman of Revlon cosmetics.

Cohen suffered from a degenerative disease prior to his death in 2012 which made things like speaking and walking more and more difficult for him. At some point before his death, he modified his will to leave the family business to his son James, cutting daughter Claudia out of it. Samantha would go on to sue after her mother Claudia's death, claiming that her mother was deprived of her share of a $700 million estate, and Samantha herself in turn lost out on her inheritance, because of James' alleged undue influence on their father to change his will.

Minimizing the risk of will contests, family disputes

We often write on our Las Vegas estate planning law blog about how to ensure that Las Vegas residents' wishes will be carried out after their deaths. Many estate planning tools and options are designed to make sure instructions will be followed and that assets will be distributed according to a solid plan. But what happens when someone else's wishes interfere - specifically, when a will contest or other family dispute breaks out?

Fortunately, there some preemptive steps one can take to minimize the risk of this. Discussing one's plans with family members and heirs before writing out a will is an important element; children might have emotional attachments to certain personal property, for example, that can be taken into account. Las Vegas residents who have married multiple times should also be sure they are updating their estate plans to ensure that the correct, current beneficiaries are named in any retirement accounts or life insurance policies.

An unconventional way for some to minimize estate tax liability

Last month, our Las Vegas estate planning law blog discussed some tax tips for residents in 2014. While it's important to understand the basic tax ramifications in estate planning, there are some fairly unique strategies available for those with high-value estates and assets.

These individuals are perennially faced with the dilemma of trying to save for retirement and ensure an inheritance for their heirs, while every year the IRS claims a greater share through the federal estate tax. In some situations, financing a life insurance policy may offer an approach worth considering.

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