Las Vegas Probate Estate Lawyer

Little else causes us more stress, time, money, and grief than when our health, or the health of a close family member or friend, is seriously threatened. It is something we do not like to think about and hope never happens to us. Unfortunately, it is very possible that either us or a loved one will, at sometime or another, become incapacitated whether it be through an accident, old age, or some other means. When this does happen, we do not want to be unprepared or unable to handle important health care decisions. With a Durable Power of Attorney for Health Care (DPOA HC), this does not have to be the case.

Putting it simply, a Durable Power of Attorney for Health Care is a document that allows individuals to authorize another person(s) to make health care decisions for them in the event  they become incapacitated or otherwise unable to make health care decisions for themselves . It makes dealing with health issues less stressful, less time consuming, and less costly.

Picture a scenario where a man is involved in an accident and only remains alive after being hooked up to life support. Although he knows how he wants his health care decisions made, his loved ones do not and he does not have a DPOA HC that legally validates his desire. Now, under the distress of the tragedy, his loved ones begin to worry and are unsure who is authorized to make the decision to keep him on life support or not and how his medical expenses will be handled, among other things. Again, the man knows how he wants this handled, he just does not have the document to validate it. This puts unneccesary burdens on everyone, and this is only a basic example.

There are many important aspects that go into drawing up a DPOA HC. Some important things to know are first, you should have one if you do not and second, you should appoint only person(s) who you completely trust and feel comfortable with making these decisions for you. You will understand everything else when you come in to create or update your DPOA HC.

The idea of your loved ones having to deal with your incapacity is difficult enough already; you do not want to risk additional, unneeded stress and complications by failing to get your health care affairs in order.

General George S. Patton once said “…one does not plan and then try to make circumstances fit those plans. One tries to make plans fit the circumstances.” A simple interpretation of this quote is that it often takes more than one initial plan in order for the intended result of that plan to come to fruition. This is because the initial circumstances of that plan will change along the way, which ultimately requires us to revisit our plan and adapt it to the present circumstances. This was true for General Patton during times of war, and it is also true for each of us with our estate planning.

Estate planning is more of a process of planning, not just a plan. Initially, your plan will detail how you want your assets managed from that point forward. However, changing circumstances will require you to revisit that plan to ensure that it reflects those changes. Here are some examples of when it is a good idea to revisit your estate planning:

Change is always certain. It is vital to continually review your estate plan to make sure it is up to date. After all, a good plan today might be insufficient tomorrow, depending on the circumstances.

To contact an Estate Planning lawyer visit our main site at www.probate-estatelaw.com

Studies have consistently shown that over 1/2 of Americans do not have a will.* Considering that a will is a pivotal component for an adequate estate plan, it is likely that over 1/2 of Americans lack other important aspects of an estate plan, such as a living trust or durable power of attorney. The fact that so many are lacking in estate planning is unfortunate, but perhaps even more so are the reasons why.

Last Will and Testament

Studies have also shown that the most popular reasons for not having an estate plan are that people do not want to think about dying or becoming incapable of making decisions, they do not know who to talk to about it, they feel that they do not have enough assets to justify setting up an estate plan, or they do not feel they can afford it with the current economic conditions.* In reality, these are not good reasons to avoid setting up an estate plan.

There can be detrimental consequences for those who fail to protect their assets and get their affairs in order in the event that they die or become incapacitated. Those who fail to do these things risk having their assets distributed in a way contrary to what they actually want. Not only does this negatively affect the individual, but it also affects the people and organizations who end up, or should end up, as beneficiaries of their estate. This is putting it simply.

Contrary to what some people may think, estate planning is for everyone. It remains certain that 1) Every person will at one point pass away and/or become incapacitated, and 2) The assets of each person will be distributed in some way. When it comes to having a will, durable power of attorney, living trust, or any other component of an estate plan, it is not the quantity or worth of assets that is most important, but the simple fact that you have assets that need to be managed and protected.Who and to whom those assets are distributed is up to you to decide. You can either set up estate planning and have the process be as efficient and effective as possible, or you can leave it up to the probate courts and potentially pass on unneeded stress and expense to your loved ones.

We spend our lives working to acquire and accumulate various kinds of assets for various reasons. Does it not make sense then that we should invest in protecting our life’s work?

Sources:

1) Lawyers.com Wills and Estate Planning Survey (2007). Performed by Harris Interactive. Retrieved from LexisNexis, http://www.lexisnexis.com/about/releases/0966.asp

2) Lawyers.com Wills and Estate Planning Survey (2009). Performed by Harris Interactive. Retrieved from LexisNexis, http://www.lexisnexis.com/media/press-release.aspx?id=1268676534119836

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The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 has opened a window of opportunity to avoid significant estate and gift taxes for 2011 and 2012. The Act, signed on December 17, 2010, has significantly increased the exemptions and decreased the maximum tax rates for estate, gift, and generation-skipping transfer (GST) taxes. The changes are only effective through 2012 and will reset again at the start of 2013.

President Obama signs the law into effect as members of Congress look on

For 2011 and 2012:

• Estate, gift, and GST tax exemptions are each $5 million ($10 million per couple)
• Maximum tax rate is 35%

Starting 2013:

• Estate, gift, and GST tax exemptions are each $1 million
• Maximum tax rate is 55%

These changes to the estate and gift taxes allow for many to better protect their assets and save considerable amounts on estate and gift taxes, specifically for assets and gifts in excess of $1 million. A $5 million dollar gift now could save you up to $2.2 million dollars in taxes compared to making the same gift after 2012. The same holds true for assets you want to designate to a beneficiary upon your death. Now is an opportune time to consider making gifts and changes to your estate planning. Not doing so could be very costly.

Sources:

1.) Photo. White House Photographer. December 17, 2010. President Obama Signs the Act.

We have all heard the adage, “It’s not always what you say, but how you say it.” In estate planning, this principle can reworded as, “It’s not always what you give, but how you give it.” As you consider the assets you will give to others and who will be the beneficiaries of those assets, it is important to keep in mind the timing of the gift. The step-up in basis principle is one example of this.

A simple way to understand what a step-up in basis means is to use an example. Let’s say a man purchased some land years ago for the amount of $100,000 and recently decided to give it to his son. He can either give it to his son while he (the father) is still alive, or he can leave it to his son upon his (the father’s) death. To make it simple, we will say that the fair market value (the value the land can be sold at presently) is $200,000 in both scenarios. If the man gives the land to his son while he is still alive, the son automatically has to assume the cost basis of the land at $100,000, the same amount that it originally cost his father to purchase it. If the man leaves the land to his son upon his death, the son would assume a step-up in basis of the land at its fair market value of $200,000. This is what it means to have a step-up in the basis of an asset-to assume an asset’s value at its higher fair market value compared to its original cost. But why is this relevant and what implications does this principle have?

The tax implications are significant when dealing with the step-up in basis of an asset. To continue our example, after receiving the land from his father the son decides he wants to sell it for $200,000. If the land was given to him while his father was still alive, the son would have to pay taxes on the amount of $100,000, the difference between the fair market value and original cost, or the gain on the sale of the land. Now if the son received the land upon the death of his father, he does not have to pay any taxes because he would be selling it for the same amount that it is worth at the fair market value. In other words, the difference between the selling price and fair market value of the land is $0, therefore no taxes need be paid on the sale.

Using this example, it is evident that in many cases it may be wise to leave an appreciated asset upon one’s death rather than give that asset to a beneficiary while the donor is still alive. This will minimize the taxes to be paid, which can be very costly, in the event that he or she sells the asset during his or her lifetime.

Some people feel that giving assets away during their life will help avoid the time and expense of dealing with probate upon their death. However, people that choose to do this forfeit the beneficiary’s advantage of the step-up in basis principle. There are ways to both avoid probate and still allow for the beneficiaries to receive a step-up in basis of an asset. One such way is through creating a trust. In doing so, the assets placed within the trust pass on to the beneficiaries without the cost of probate and still give the beneficiaries the step-up in basis.