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27 March
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Trust Administration in Nevada

Posted by David M. Grant
in Trust Administration

Closing Procedures and Timeline.  Following is an explanation of the recommended administrative and termination procedures. Affidavit of Successor Trustee (“AST”) - The signing of an AST by the successor trustee formally installs them as the trustee of the Trust and is evidence of the same.  If real property is owned by the Trust, the AST will add the Successor Trustee to the title of the property upon recording in the proper county recorder’s office. Notice to creditors – In Nevada known creditors have thirty (30) days from mailing date to file a written claim with the Trustee and ninety (90) days from the first...

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27 March
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How to Terminate a Trust

Posted by David M. Grant
in Estate Planning, Probate, Trust Administration

Trust agreements can terminate for any number of reasons. Following are several explanations of why a trust might end, come to its conclusion, and be terminated… Natural Trust Termination Upon the settlor’s death. Upon the death of the settlor (or within a reasonable time after death) a standard liquidating trust may terminate. Upon a designated age or date. Upon a specific date or the beneficiary turning a specific age, the provisions of a trust may call for complete distribution and termination of the trust. Upon another stated event. Upon the occurrence of some other event (i.e., graduation from college, marriage, the birth...

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27 March
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Donating Appreciated Stock

Posted by David M. Grant
in Estate Planning, Estate Tax Planning

(Republished in part from Vegas PBS Source Magazine, October 2011) Donating appreciated stock to charity is a sure way to generate a little tax relief for yourself.  If you do decide to donate stock, here are a few important points to consider before making your gift. Make sure the stock has appreciated.  If the stock has fallen in value since you purchased it, you may be better off selling the stock first to generate a capital loss.  Then, if you desire, you can donate the proceeds to charity. Select long-term stock. If you have owned the stock for more than one year before making...

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27 March
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Community Property vs. Separate Property for Estate Planning

Posted by David M. Grant
in Asset Protection, Estate Planning, Estate Tax Planning, Trust Administration

Community Property. Community property is everything that a husband and wife own together. Nevada is a community property state. This means both the husband and wife equally own all money earned by either one of them from the beginning of the marriage until the date of separation. In addition, all property acquired during the marriage with "community" money is owned equally by both the wife and husband, regardless of who purchased it.  Like community assets, all debts contracted from the beginning of the marriage until the date of separation are community debts. Therefore, each spouse is equally liable for debts. A full...

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27 March
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What is Estate Tax Portability?

Posted by David M. Grant
in Estate Planning, Estate Tax Planning

Before 2010, married couples could pass on up to two times the federal estate tax exemption by including "A-B Trusts" or "A-B-C Trusts" in their estate plan. Because TRA 2010 was a temporary law, many wondered if portability was a concept that would only work for those dying in 2011 and 2012.  We can stop wondering.  The “American Taxpayer Relief Act of 2012” (ATRA) is now "permanent" law.  Under ATRA, portability is a constant principal going forward. Now married couples may use “portability” to add any unused portion of the estate tax exemption of the first spouse to die to the...

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27 March
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Can a Trust Own S-Corporation Stock?

Posted by David M. Grant
in Estate Planning, Estate Tax Planning

Many people ask if a trust can own S-Corporation stock.  In general, living trusts and testamentary trusts may hold S corporation stock only for two (2) years after the date of death of the grantor.  After death, the trusts become ineligible shareholders and the corporation will lose its S-election due to the Grantor's death.  While the grantor of a living trust is living, the Trust would be qualified as a "grantor trust" for income tax purposes, thus allowing all items of income and expense to flow through to the trust's grantor.  Upon death, the grantor trust status is switched off.  At...

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26 March
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Qualifying Domestic Trust (“QDOT”)

Posted by David M. Grant
in Estate Planning, Estate Tax Planning

A Qualifying Domestic Trust, or QDOT, allows taxpayers who are not U.S. citizens to claim the marital deduction for estate tax purposes, while keeping the property in trust for other future contingent beneficiaries.  A non-citizen spouse is not otherwise eligible for the marital deduction.  QDOTs can be used when trust assets would likely be subject to the federal estate tax (married couple with taxable estate greater than $5 million), without the marital deduction otherwise being available.  Otherwise, without a QDOT, the surviving spouse must become a U.S. citizen before her deceased spouse’s estate tax return is filed. QDOT Requirements.  The following...

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26 March
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Funding Formulas for Revocable Trusts

Posted by David M. Grant
in Estate Planning, Estate Tax Planning

Unlimited Marital Deduction.  This deduction allows transfers of unlimited amounts of assets between spouses at death.  The result is that the surviving spouse does not have to pay any tax on the estate of the first spouse to die.  In other words, the marital deduction postpones the federal estate tax.  As an example, Bill Gates can pass to Melinda Gates $50 billion in assets, so long as they are married at the time of the transfer, free of transfer tax until the passing of the last of them to die. Funding Formulas.  Generally, two types of funding formulas exist, Pecuniary and...

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26 March
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Nevada Wills: Drafting a Last Will and Testament in Nevada

Posted by David M. Grant
in Estate Planning

Fundamental Discussion Before Drafting a Will.  As an estate planning attorney, it is important for me to ask the right questions of my clients.  I need to know about the client’s life, goals, family and relationship status, as well as about their assets, liabilities, income and expenses.  Before making recommendations, I really need a good picture of their financial and personal life.  Without such information, mistakes will be made and important planning opportunities will be lost.Many new clients come to me with a wrong understanding of how the law works.  For example, they think if they have a Will that...

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21 March
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Thoughts on Estate Planning and Over-Seas Flights

Posted by Mark L. Dodds
in Asset Protection, Estate Planning, Guardianship, Probate

Imagine that you are preparing to fly an airplane from Los Angeles to Honolulu. You know that airplane engines need to be serviced and overhauled after a certain number of hours of operation and you also know that the plane you are going to fly to Honolulu, over 3,000 miles of open water, has not been serviced recently. Would you choose to ignore the service requirements of the engines of that airplane, knowing that  you have only one chance to get it right and that failure is not a viable option, particularly when that plane must travel non-stop for 3,000...

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