What happens to your pets after you have passed on? That is an important question – and one that people often worry and wonder about. Fortunately, the Nevada legislature has specifically enabled pet owners to provide for their pets after their passing. Specifically, NRS 163.0075 enables the creation of a Pet Trust, in order for pet owners to create the Trust and spell out how you desire the pets to be taken care of and who will be designated to be their caretaker. Since this is statutory law in Nevada, there will be no question of the validity of a properly established Pet Trust. When creating a Pet Trust, there are some issues that you should carefully consider. First of all, you should carefully consider who the Trustee/Caretaker of the Pets will be. Of course, it is best if you designate someone that will love and take care of your Pets the way that you would want them to be taken care of. You may also want to designate one or more alternative Trustees/Caretakers, in the event that the person that you have designated dies or becomes unable or unwilling to take care of the Pets. You should also carefully consider how much money that you should “fund” the Pet Trust with, to ensure that your Pet Trust will have sufficient funds to provide for the Pets’ food, shelter and veterinarian care needs.You should consider what happens to the funds remaining in the Pet Trust, if you Pet(s) pass away before the Trust funds are depleted. You may want to have the remainder distributed to family members, friends or to a charity (perhaps, your favorite animal charity).
If you would like to schedule a free consultation to discuss establishing a Pet Trust, click the following link to contact us: https://www.rdjohnsonlaw.com/contact/

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1. When a Home is the only significant asset.  When a retired person who has no plans or ability to acquire additional income or assets and he or she owns only a home and nothing else of significance, the person may not need to do a Last Will and Testament or a Trust.  Creating a Will and having the estate be distributed through the Will in the probate process will certainly take care of the planning need in terms of spelling out who will receive the home following the person’s death. However, the probate process takes a significant amount of time and expense which may not be justified if the home is all there is (note that, if the home is held in joint tenancy with a spouse or some other person as the co-owner, upon the death of the first joint tenant to die, the surviving joint tenant will receive full ownership of the real estate, without the need for any court or other formal proceeding). A Trust (which would avoid the need of a probate proceeding) too may be more expense than is justified in this situation. In Nevada, a good alternative to the above two options would be to do a “Deed Upon Death”. 

Deed Upon Death.  NRS 111.655 – 111.699 provides for the opportunity for a person, while they are still living, to record a Deed Upon Death in the County Recorder’s office where the real estate property is located. The Deed Upon Death specifies that it is effective upon the death of the current property owner.  The Deed Upon Death will specify one or more persons to whom the property will be conveyed to, following the property owner’s death. When the property owner passes away, all the person that is designated to receive the property will need to do is to present a certificate of death and record an Affidavit of Death of the property owner in the County Recorder’s real estate record for the property. When the Affidavit of Death is recorded, the conveyance to the transferee is then effective and the beneficiary becomes the owner of the real estate. If this is the only asset to deal with, the Deed Upon Death will be a very cost-effective means of providing for the passing of property to whomever the property owners wishes to receive it when they pass away. 

2.  When there are only Retirement Accounts, Bank Accounts and/or Investment Accounts. All retirement accounts, bank accounts and financial investment accounts nowadays will allow you to designate a “pay on death” (P.O.D.) beneficiary on the account.  In fact, if you hold any of these accounts (other than retirement accounts) that are not in a trust, you should always designate a pay on death beneficiary (in every case).  The pay on death designation will avoid probate of the account. Following the death of the account holder, all the beneficiary will need to do is to go to the bank or financial institution and present identification and a certificate of death of the account holder.  After they institution has verified the beneficiary’s identity and the death of the account holder, they will be able to distribute the account proceeds to the beneficiary and close out the account.  If there is no pay on death designation and the account is not held by a trust, the only way for the heirs to receive the proceeds of the accounts will be to open up a probate case (which is called an “intestate” estate when there is no Will) and go through the probate process (note that Nevada does have a provision for a small estate that can be handled without probate or an abbreviated probate in Nevada, but, unless it is an actual court order, banks and financial institutions routinely refuse to recognize an “affidavit of entitlement”). Even if you have a trust but you have one or more accounts that are not in the Trust, you should at least do a P.O.D. designation on the account and name the Trust or an individual as a P.O.D. beneficiary.  

3.  Life Insurance and Annuities.  A life insurance policy or annuity through an insurance company will always have a beneficiary designation. The death beneficiary designation will avoid the probate process.  Similar to the pay on death beneficiary, the insurance or annuity beneficiary will need to notify the insurance company of the death of the insured, present a death certificate and proof of identification. If the deceased person’s only asset was a life insurance policy, then there should be no need for a Will or Trust, because there will be no assets other than the payout of the insurance policy or annuity. 

If there are assets, other than the foregoing types, the person should certainly do a Will or a Trust. In choosing whether to do a Will or a Trust, remember that a Will is a ticket to probate court and a Trust (if properly “funded” with all of the assets) will avoid the probate process and will generally save the family of the deceased a significant amount of time and cost to the estate.  Also, do not forget the necessary planning for incapacity through a General Durable Power of Attorney and a Health Care Power of Attorney, which will enable someone to handle your financial transactions and health care decisions if you become incapacitated.  

For a free consultation regarding Estate Planning at our Summerlin office, contact R.D. Johnson Law Offices: https://www.rdjohnsonlaw.com/contact/ 

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With regard to a residency owned by a Trust, the applicable U.S. Treasury Regulation at 26 C.F.R. 1.121-1(c)(3)(i) states that, if a residence is owned by a trust, for the period that a taxpayer is treated under sections 671 through 679 (relating to the treatment of grantors and others as substantial owners) as the owner of the trust  or the portion of the trust that includes the residence, the taxpayer will be treated as owning the residence for purposes of satisfying the 2-year ownership requirement of section 121, and the sale or exchange by the trust will be treated as if it was made by the taxpayer.

Thus, a revocable living trust would clearly not disqualify the tax exclusion on the gain of from a sale or exchange of property owned by the revocable living trust. Likewise, a residence that is owned by a Nevada Asset Protection Trust or Nevada Real Estate Trust would also not disqualify the taxpayer from the tax exclusion on the gain from a sale or exchange of the residence that is owned by these types of trusts, as long as they are established and maintained as a “grantor trust”.

Ordinarily, the Nevada Asset Protection Trusts and Nevada Real Estate Trusts that R.D. Johnson Law Offices, LLC creates for its clients are intentionally established so as to be treated as “grantor trusts” for U.S. taxation purposes. With a grantor trust, the income or loss of the Trust “flows through” and is attributed to the grantors (a/k/a: the people that established the trust) for federal taxation purposes, even though the trust may often have it’s own EIN (U.S. taxpayer I.D. number).

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