Who Will Get My Property at My Death? Title to Property is the Key to Asset Transfers at Death

Introduction

Estate planning is the planning of the acquisition, preservation, and ultimate disposition of one's assets. The focus in these pages is on the transfer of assets at death. They are intended to motivate the reader to do something and to do it right. The first law of estate planning is a modified version of Murphy's Law: "If anything can go wrong, it does, and usually when it's too late to correct."

To prepare a will or even a trust that meets the minimum legal requirements is relatively easy, but to prepare an effective estate plan, you must know what what your options are and the consequences flowing from those options. Preparing estate planning documents without adequate knowledge of the legal, tax, and practical effects of those documents is like traveling in a car without a map. Just as a map of Pennsylvania will not help you travel through California, estate planning information that comes from someone who is not familiar with the laws of your state may lead you down the wrong path. You need to:

1. Educate yourself with professional advice from someone experienced in the estate planning, property, tax laws applicable where you live,

2. Prioritize your goals, and

3. Implement your plan with professionally prepared documents. You also need to periodically review your plan to keep it up-to-date.

The articles that follow in these pages are intended to give a simple, easy-to-understand overview of estate planning techniques ranging from the basic to the sophisticated. These articles were written by Nevada estate planning attorney Layne T. Rushforth, and a brief biography gives a few boring details about him. After you read the articles, feel free to ask questions via the rushforth.net questions forum. This information is not a substitute for personal, professional advice, but it is hoped that it will provide a foundation for a basic understanding of the laws that affect estate planning and the tools we use to accomplish our objectives.

Asset Ownership

Asset ownership is the key to determining who will get your assets (also, "property" or "estate") when you die. Your assets will pass at death: (1) by operation of law; (2) under the terms of a contract; or (3) under state laws relating to the administration of estates in the probate court. Why is this important? Because assets passing by operation of law or under a contract are usually not subject to administration in probate and are usually not affected by a will.

• Operation of Law: Some forms of property ownership determine, by legal definition, who will immediately succeed to a deceased co-owner's interest in the property. Examples include joint tenancy, community property with a right of survivorship [Nevada Revised Statutes 111.064(2)], and life estates. Financial accounts you hold "in trust for" a designated beneficiary and registered securities you hold "transferrable on death to" a designated beneficiary will be given to the designated beneficiary upon your death. In these situations, legal title passes the instant of death.

• Contracts: You can arrange to have money or other assets transferred to designated beneficiaries upon your death under various contracts, including life insurance, trusts, retirement benefits, annuities, partnership agreements, and stock-purchase ("buy-sell") agreements. The beneficiaries' rights spring into being at the moment of your death. This can also including living trusts, whether revocable or irrevocable.

• Probate: All of your assets which do not pass by operation of law or by contract pass through probate or intestacy proceedings. Your personal representative is called an "executor" if named in your will or "administrator" if not. "Probate" refers to the court proceeding required to transfer the assets of a decedent which do not pass directly by law or contract. To avoid probate, either (a) don't die or (b) use the non-probate forms of ownership which allow your assets to pass to your beneficiaries by operation of law or under a contract. A will does NOT alleviate the need for probate. A will may clarify and simplify probate, but it is of very limited value until it is probated. Probate proceedings vary from state to state, but similar rules apply in most states. For a discussion of probate proceedings in Nevada, click here.