Nevada Probate Basics

What would happen to your assets if you died today?  A proper estate plan can be the difference between an efficient, expeditious, and inexpensive distribution of your estate and an administration that takes years and costs tens of thousands of dollars.  In Nevada, there are several mechanisms that can be implemented to avoid the expense of probate entirely.
When people do not establish a trust or take other steps to avoid probate,  the Probate Court will then supervise all activities relating to the payment of the final expenses of the decedent, determine who is entitled to inherit the deceased person’s assets, and charge for those services.
Nevada has four levels of probate or estate administration.

Affidavit of Entitlement or Affidavit of Small Estate

If the deceased owned $20,000 or less and had no real property and no debts, the heirs can present a simple affidavit with a death certificate to a bank, DMV, or other entity in order to transfer title. In this case there is no need to file anything in Court.

Set Aside without Administration

If the deceased owned $100,000 or less, the heirs or beneficiaries under the Will can petition the District Court to distribute the decedent’s assets to the heirs or beneficiaries without any Court supervised administration. This procedure is relatively simple and economical.

Summary Administration

If the deceased owned assets valued between $100,000 and $200,000, either the deceased’s next of kin or the person the decedent designated in a Last Will and Testament as the Executor/Executrix must conduct a formal, Probate Court supervised procedure to administer the estate, pay the debts and distribute the remaining assets to the beneficiaries. If the deceased did not have a Will, a relative or other interested person may petition to administer the estate. The assets go to the relatives of the deceased in accordance with Nevada’s laws of intestate succession.  This process cannot be completed in less than four (4) months and the administrative and attorneys’ fees associated therewith can be determined by a percentage of the total estate.

General Administration

If the deceased dies with assets in excess of $200,000, the estate must be administered under Probate Court supervision, as in a Summary Administration. The only difference between the two is that, in a General Administration, there is a longer period of time creditors have to file claims against the estate and the filing fees are almost double that of a Summary Administration.  This process cannot be completed in less than five (5) months and it is not uncommon for an uncontested General Administration to take longer than one (1) year.
Probate Court can be avoided with an estate plan designed by a competent attorney.  The costs for establishing mechanisms for avoiding the intervention of the Probate Court are generally much less expensive than conducting a Probate administration and generally lead to much fewer problems such as will contests, trust contests and other litigation which can lead to additional fees and delays.

Christopher J. Phillips, Esq.

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Excuses We Use To Maintain Credit Card Debt

No mat­ter how many credit cards you own, never keep a balance on any of them to avoid any and all finance charges.  However, many people do not have the discipline to pay off their credit cards every month and fall into credit card debt.  Who knew that such a little piece of plastic could cause so much havoc on a person’s finances?  How do people justify putting themselves in such a situation?

Here is a short list of common excuses for unplanned charges on credit cards:

The 0% introductory interest rate is a bargain you just can’t turn down.

Your dream TV is on sale at your local electronics store. You think you must be in the right place at the right time.  As you begin to think about whether you can buy the TV and whether it was in your budget, a sales person approaches you with the kicker: 0% interest for 12 months.  But you really have to think, do you really need this item now? Are you really saving enough to justify this spontaneous purchase? With a 0% interest rate, the payment will only be a small amount, making the TV seem much more affordable.  In the beginning, you think you will pay off the balance, but in reality, you get sucked into buying even more.  After 12 months, you find yourself stuck with massive finance charges.

The same goes for 0% balance transfers between credit cards. Maybe some people can avoid paying any interest by transferring credit debt from card to card, but if you forget for any period of time, you get stuck with more high interest debt. Avoid the 0% interest trap!

The rewards from credit card purchases are worth it.

Try to use credit cards that offer bonus points or cash back from certain purchases such as gas and groceries. However, remember there is a reason why credit companies offer reward programs.  People usually don’t pay off the entire balance and instead, rack up significant interest charges.  They want your business AND your interest.

It’s for an emergency!

You may have an emergency fund for purchases like home repair.  However, you decide to charge it instead of tapping into that emergency fund.  You think you want to keep your emergency fund intact and cheat just once by charging the expense.  However, nothing ever happens just once.  Use the emergency fund for what it’s for: emergencies.  Otherwise, everything might start to seem like an “emergency.”

We’ve been good so it’s time to treat ourselves.

It’s been a hard month you are tired of staying home on the weekends.  You feel like you simply MUST go to California for the weekend and enjoy the beaches.  Maybe you have your eye on the latest smart phone. You work hard for your money and now it’s time to buy something for yourself. By charging it, you avoid most of the guilt since you don’t see the funds quickly disappear from the bank account. However, just because you think you deserve it doesn’t mean you are immune to finance charges on your credit card.  That $2,500 trip to California will end up costing you $4,000+.  Budget for your vacations and treats.

I’ll start paying off my debt next month.

Why waste your fun money by starting to pay off your debt? The debt can wait.  But, while the debt waits, the interest charges accumulate.  Every so often you can justify a purchase by committing to make changes to your budget so that you will have the additional funds to pay down that debt.  However, months go by and you never ACTUALLY change your budget.  You need to have the attitude to start NOW or you may fall victim to the continuous cycle of credit card debt. It’s time to follow through on the promise you made to yourself to achieve your goals of being debt-free.

I’m going to get a raise soon.

Be grateful just to have a job.  In today’s economy, bonuses and raises are a thing of the past.  Plus, even if you do get that raise, you want to enjoy it THEN and not have to pay off credit card debt from months ago.  You work hard and you deserve to splurge when your raise or bonus comes but WAIT to get it.

This is the last time.

You have a plan of not using your credit cards until you pay off the balance. But wait! Before that, you just need to make one more purchase.  One more purchase won’t hurt, right?  You just avoided following through with your plan of paying off your debt. Next time is always the last time until you cut up your cards for good until your debt is gone.

The payments are small.

You see the signs everywhere: Own this TV or computer for only $40 month! What the sign won’t tell you is that you could end up paying 25% for the TV because of all the finance charges you accumulate by paying the minimum each month. If you can’t afford it now, you shouldn’t consider any store gimmicks.

It’s only for a small purchase.

Every time you don’t have enough cash, you are forced to use your card. Those small charges add up. If you already had a balance on your card, your fight to become debt free becomes that much more difficult. You don’t want that $6 lunch to turn into a $7 lunch month after month. Try and use cash for small purchases as much as possible, especially if there is no gain in making the credit card purchase.

In the end, credit card debt is only bad for your financial health.  While the rewards are enticing the risk is too great.  What excuses have you used in order for us to fool ourselves into using that credit card?  Please share!

Randy M. Creighton, Esq.

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Equitable Subordination in Nevada

Nevada is a first-in-time recording state, which means that the lien recorded on real property first has priority over subsequently recorded liens.  Huntington v. Mila, Inc. 119 Nev 355, 357, 75 P.3d 354, 356 (2003).  However, there are exceptions to this rule.  In cases of equitable subordination, a lien recorded first in time can be subordinated to a later-recorded lien.  The issue usually arises when there are several liens on a property and the purchaser fails to identify a junior lien holder.  In certain circumstances, the court will allow the purchaser or subrogee to step into the shoes of the superior lien holder.  The rationale behind equitable subordination is that, to do otherwise gives the junior lien holder an undeserved windfall. Houston v. Bank of Ma. Fed. Sav. Bank, 119 Nev, 485, 490 (2003).

The court will allow equitable subordination if:

  • The subrogee made the payment to protect his or her own interest;
  • The subrogee did not act as a volunteer;
  • The subrogee was not primarily liable for the debt; or
  • The subrogee paid off the entire encumbrance and subrogation would not be unjust to the junior lien holder. 

Mort v. United States, 86 F3d 890, 894 (9th Cir. 1996)(citation omitted). 

Byron E. Thomas, Esq.

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The federal government provided new Home Affordable Modification Program (HAMP) outreach and communication guidelines for foreclosure actions while evaluating the borrower.  These guidelines provide additional protection for delinquent borrowers who have filed bankruptcy but would otherwise be eligible for HAMP benefits. Some key highlights from the directive include:


  • The servicer must evaluate the borrower’s eligibility under HAMP and determine ineligibility before referring the borrower to foreclosure (or make “reasonable solicitation efforts”).
  • If foreclosure activity has already been initiated, the foreclosure sale cannot occur until after the servicer determines if the borrower is ineligible under HAMP (or makes “reasonable solicitation efforts”).
  • The servicer must give the borrower 30 days to respond to HAMP “Non-Approval Notices” in certain circumstances before conducting the foreclosure sale.
  • The servicer must provide, in writing, to the foreclosure attorney certification that the borrower is ineligible for HAMP before conducting the foreclosure sale.


  •  A borrower in active Chapter 7 or Chapter 13 bankruptcy or the borrower’s attorney or bankruptcy trustee can request the servicer to consider the borrower under HAMP.  The servicer can no longer decline the borrower as a “proper exercise of discretion.”
  • If the borrower has been approved on a trial loan modification and files a Chapter 7 or Chapter 13, the servicer may not deny the borrower a permanent modification simply for filing bankruptcy.  
  • If a delinquent borrower has a discharged Chapter 7 and chooses not to reaffirm, the first lien mortgage debt is still eligible under HAMP with the following provision added to the permanent modification agreement: “I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the loan documents. Based on this representation, the lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

Homeowners struggling to make mortgage payments or feeling their lender or servicer has not worked with them on a loan modification should call a bankruptcy attorney.  For a copy of the full disclosure, see Supplemental Directive 10-02.

“Cancelled Debt” from a Foreclosure May be Taxable

If the bank foreclosed on your house or you abandoned it, and the lender cancelled your debt, you may receive IRS forms from the lender regarding that cancelled debt.  Your lender may send you an IRS Form 1099-A, Acquisition or Abandonment of Secured Property or an IRS Form 1099-C, Cancellation of Debt.  If you used the debt to purchase, build, or substantially improve your primary residence, that debt may qualify as “acquisition debt,” and be eligible for the Home Mortgage Debt Forgiveness Relief program.  If you have received either Form 1099-A or Form 1099-C, the IRS recommends you review IRS Publication 523 and 525 to determine whether you must include the debt amount on your tax return as income.

This article does NOT constitute tax advice.  If you desire tax planning or assistance, seek a qualified professional.

Carlos L. McDade, Esq.

A New York Times article explains how A HIGH credit score won’t necessarily insulate borrowers from the home-foreclosure crisis.

Read the full story here

bILLSNevada Supreme Court Justice James W. Hardesty announced that more than 3,400 homeowners who received notices of default have requested mediation in the Nevada Foreclosure Mediation Program as they seek to hold on to their homes.  Since the program first began on July 1, 2009, 372 mediations have been conducted and another 805 mediations have been scheduled.  An additional 1,401 cases have been assigned to mediators, who are working to schedule and hold those mediations within 90 days of the notices of default being recorded.  Justice Hardesty announced that the statistics are current as of November 16, 2009

Important Note to Homeowners:  If you receive a “Notice of Default and Election to Sell,” you must sign the application form and mail it with $200.00 in certified funds within 30 days from the day you receive your notice to seek mediation.  You should receive two copies of the application form.  Sign both and mail them in the supplied envelopes.  Mail one copy of the application and your $200.00 certified funds using the supplied envelope addressed to the Nevada Foreclosure Mediation Program Office.  If you do not receive any application forms or envelopes, contact the Foreclosure Mediation Program

Currently, the Foreclosure Mediation Program has 95 mediators who have been appointed by the Supreme Court.  Those mediators have all been through rigorous training designed to teach the mediators the intricacies of the mortgage loan and foreclosure process and some mediation techniques.  Another 80 mediators have been trained recently and the Supreme Court will select from the list of those who successfully completed the training.

Justice Hardesty provided the following statistics regarding the program:

  • Notices of Default filed:                 29,242 (July through October)
  • Requests for mediation:                3,446
  • Mediations conducted:                  372
  • Mediations scheduled:                   805
  • Cases processed and
    ready for mediations
    to be scheduled                               1,402

(All statistics beginning July 1, 2009, and as of November 16, 2009 unless noted)

Carlos L. McDade, Esq.


bILLSA bankruptcy court in Pennsylvania recently ruled on an issue that has been a frequent source of confusion to those working with short sales. 

The issue is whether a 1099-C issued by a lender to a borrower automatically relieves the borrower of liability for the debt.  In other words, is a creditor prevented from pursuing collection of a debt for which it has issued a 1099-C pursuant to IRS requirements?

A 1099-C is issued to the borrower by the lender for “cancelled” debt.  This debt generally is taxable income to the borrower.  The exceptions to this have been covered extensively in other articles including that for purchase money debt on a primary residence.

In the case of In re Zilka (407 B.R. 684) the court considered this issue in a situation that did not involve a short sale. Nonetheless, the case is illustrative of what may happen when a court considers the issue in a short sale context. The judge wrote:

[The creditor’s] issuance of the Forms 1099-C did not itself operate to  legally discharge the Debtor from further liability on each of the [creditor’s] four claims. That is because Forms 1009-C, as a matter of    law, do not themselves operate to legally discharge debtors from liability on those claims that are described in the Forms 1099-C.

The court addressed the issue of a taxpayer who has paid tax on cancelled debt that is the subject of the 1099-C.  It found that the issuance of a corrected 1099-C would allow the creditor to pursue the debt in such a situation.  This can be distinguished form a short sale of a primary residence where the owner most likely is subject to tax relief.

Robert B. Noggle, Esq.

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Behavioral Economics

ResessionThe pundits are suggesting that the economic recovery will be far slower than they had originally anticipated. Despite the slug of government money and programs, the consumer is the chief factor in determining how deep and how long this recession will be. Despite moderately good news on the stock market and employment sector, consumers remain cautious and are choosing to pare down debt and save rather than extend credit and spend. This is a gloomy picture considering that consumer consumption accounts for roughly seventy percent (70%) of the GDP.

Tisha Black-Chernine, Esq.

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Tax Form 982 and Mortgage Forgiveness Debt Relief Act

Homeowners whose mortgage debt is partly or entirely forgiven during the calendar years of 2007 through 2012 are able to claim tax relief by filling out the newly-revised Form 982, filing it with the Internal Revenue Service, and submitting it with their year-end federal tax returns. Normally, when a bank gives a homeowner debt forgiveness it results in taxable income. However, the Mortgage Forgiveness Debt Relief Act of 2007 allows taxpayers to exclude from their taxable income debt forgiven on their principal residence. A homeowner qualifies for this tax exclusion if the balance of their loan is $2 million or less, or $1 million for a married person filing a separate return.

The Tax Form 982 applies to debt reduced through mortgage restructuring, loan modifications, short sales, and foreclosures. Eligible homeowners need only fill out the Form 982 and receive a 1099-C from their lending institution. The debt forgiven by the lending institution must have originated to buy, build or improve the taxpayer’s principal residence and must have been secured by that residence. Debt associated with rental or investment properties, home equity lines of credit, business property, credit cards or car loans do not qualify for the new tax-relief provision.

A homeowner will encounter the Tax Form 982 upon the completion of a mortgage restructuring transaction. This would include but not limited to (1) a successful loan modification with principal reduction, (2) a completed short sale, and (3) a foreclosure sale with remaining deficiency.

If you would like additional information about the Tax Form 982 and its relation to your residential home visit the IRS’ website at

James E. Herbe, Esq.

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Tisha Black Chernine awarded for
Mountain States Rising Stars 2011

Michele T. LoBello awarded for 
Nevada Super Lawyers 2007

Black & LoBello is an AV® Preeminent rated, locally owned, full service law firm in Las Vegas, Nevada.