Note: This article was originally published by Bo Bingham, the current managing partner for Bingham Snow & Caldwell’s Mesquite office. We decided to re-publish it as a “classic” with updates due to the many inquiries we receive regarding the mechanics of a full probate in Nevada, which is often far more involved than many other states and definitely more involved than people think.
Smaller estates, meaning the assets of individuals who pass away with relatively few assets, may qualify for a simpler form of “probate” such as using a small estate affidavit or an “estate set aside” (discussed in previous articles). However, when those options aren’t available and when steps to avoid probate haven’t been taken (such as the creation of a trust, execution of deeds upon death, etc.), the formal probate process with some form of court oversight is generally required. This article provides a basic road map for those heirs who face the prospect of full, or as we lawyers like to call it, formal probate.
A deceased person’s (called the decedent) property and assets are legally held in their name and death does not change this status. Thus, the decedent’s heirs don’t have the legal authority to sell, give away, or otherwise use the property after the decedent’s. For example, heirs can’t walk into the bank, tell the bank teller that mom or dad passed away, and then withdraw the money from the account. The bank teller won’t even tell heirs the balance of the account, let alone release any of the funds and no amount of tears, smiles, or winks will change this impasse.
Since, as a practical matter, a dead person can’t do much with their estate, Nevada law empowers the probate courts to transfer ownership from deceased persons to their heirs who, in theory at least, will put the estate to productive use. Thus, in order to start withdrawing money and selling property, heirs must first request and receive permission and authority from the probate court. When the net value of a person’s assets totals $125,000 or more, a full or formal probate will be required. This process is started by filing a probate petition describing, among other things, the deceased person’s assets and debts. The petition will also ask the court to appoint a personal representative (a.k.a. executor) for the estate. The executor will often be a family member or person named in the decedent’s will.
If the petition is approved, the court will provide certain documents to the personal representative called “Letters Testamentary.” These documents prove that the personal representative has authority to legally act on the deceased person’s behalf (or really on behalf of the deceased person’s estate) to gather assets and ensure that the estate is protected against waste and loss. The Letters Testamentary can be provided to that pesky bank teller, for example, who will then know that the personal representative is authorized to act on behalf of the estate and has authority from the court to access the account.
However, even with the Letters Testamentary, the personal representative cannot transfer the person’s assets to the heirs or beneficiaries so tell them to put off the vacation to Fiji for a few more months. The decedent’s creditors must first be given notice of the death so they can attempt to collect whatever money they can from the estate. One of the personal representative’s most important duties may end up negotiating settlements with the creditors who may, depending on the size of the estate and the type of debt, settle for considerably less than the face value of the decedent’s debts.
After the notice is provided, the creditors will have 90 days to formally make a claim against the estate. However, after the 90 days have passed, any creditors that did not make a claim will forever lose any right to get paid. If there is anything good about probate, it is that it provides some finality. Once the 90 days have passed, the heirs can rest easy knowing that a creditor won’t come knocking on their doors two years later. After the creditors have an opportunity to make any claims, the personal representative will provide appropriate documentation to the court, pay off any valid debts, and transfer the rest of the assets to the heirs or beneficiaries as set forth in the will or—if there is no will—pursuant to Nevada’s intestate (i.e. “no will”) rules of inheritance.
As you can see, even with this brief summary, probate can be a somewhat complicated and lengthy process. Having a road map of what will occur and how it works can make things a little easier.
Bo Bingham and Clifford Gravett are attorneys with the Virgin Valley law firm of Bingham Snow & Caldwell with an office in Mesquite (702-346-7300 / www.binghamsnow.com)