By Amanda Stevens and Whitney Short
Many estate plans traditionally involve revocable living trusts (“RLT”), which facilitate the seamless transfer of assets and help to avoid probate. However, not all individuals wish to employ this method; alternatives to an RLT may be more fitting for some unique situations. This article explores three such alternatives: using beneficiary designations, holding property as joint tenants, and not owning any assets. Each approach offers distinct advantages and disadvantages, which must be carefully weighed depending on the client’s specific needs and goals.
1. Payable on death (“POD”) and transfer on death (“TOD”) designations
POD and TOD designations allow individuals to name beneficiaries who will receive assets upon their death, bypassing probate. See NRS § 111.761.
Pros:
- Simplicity and affordability: POD and TOD designations are simple and affordable, as they typically require only the completion of a beneficiary designation form with the relevant entity.
- Avoiding probate: Assets with POD or TOD designations pass directly to the named beneficiary without going through the probate process in most cases.
Cons:
- Limited availability: Not all assets can be titled with POD or TOD designations. Business interests in Nevada, for example, cannot have POD or TOD designations.
- Real property: For real property, a transfer on death deed is possible in Nevada. See NRS § 111.671. However, certain requirements must be met to sell the property after it is inherited. See NRS 111.689.
- Lack of distribution specifics: Unlike an RLT, POD and TOD designations provide little in the way of specific instructions for how assets should be distributed.
2. Joint tenancy: shared ownership for simplicity and probate avoidance
Taking title to property as joint tenants with rights of survivorship is another popular alternative to an RLT. See NRS § 111.065, NRS § 111.365. Under this structure, two or more individuals jointly own property, and upon the death of one joint tenant, the surviving tenant(s) inherit(s) the decedent’s share of the property.
Pros:
- Simplicity and affordability: Joint tenancy is simple and inexpensive to establish. The title to property is simply transferred into joint ownership.
- Avoiding probate: When one joint tenant passes away, the surviving joint tenant(s) take(s) full ownership.
Cons:
- Loss of control: All joint tenants must agree to any decisions regarding the property, which can become problematic if disagreements arise among multiple owners.
- Tax concerns: The creation of joint tenancy can trigger gift tax consequences, especially if the transfer is made without compensation. Moreover, the surviving joint tenant may be responsible for paying capital gains taxes when the property is sold.
- Liability concerns: If one joint tenant faces financial distress, creditors may be able to seize the jointly owned property. Similarly, Medicaid could potentially claim part of the property if the individual qualifies for benefits and the property is included in the estate.
3. Owning nothing: A radical yet potentially effective strategy
One alternative involves not having any assets. This strategy entails transferring ownership of assets to various entities or individuals, such as family members or irrevocable trusts.
Pros:
- Avoiding probate: The most significant benefit of owning nothing is that assets held by others are not subject to the decedent’s probate.
- Reducing estate taxes: By transferring assets out of an individual’s name during their lifetime, it may be possible to reduce the taxable estate, thus minimizing estate taxes. For wealthy individuals, this can result in substantial tax savings at death.
Cons:
- Loss of control: Once transferred, the individual relinquishes ownership, which can be unsettling for those who wish to maintain control over their property during their lifetime.
- Fraud concerns and creditors: Transferring assets can raise red flags, particularly if done in a manner that appears to be aimed at avoiding creditors or Medicaid’s lookback period. See Division of Welfare and Supportive Services Medical Assistance Manual Section F-410.1. If the transfers are deemed fraudulent, creditors or Medicaid may still be able to access the assets, and there may be other legal ramifications . See NRS § 112.180.
- Gift tax implications: The act of gifting property can trigger federal gift tax consequences, especially if the transfers exceed the annual exclusion limit or lifetime exemption. See IRS Form 709.
Conclusion
While an RLT remains a common estate planning tool, the alternatives outlined here provide distinct options for avoiding probate and managing estate tax liabilities. The client’s goals, the complexity of their estate, and their tolerance for risk are what determine the correct strategy to use. It is crucial to work with experienced legal, financial, and tax professionals to create an estate plan that is both effective and aligned with the client’s desires.
About the authors
Amanda L. Stevens and Whitney E. Short of Short & Stevens Law, LLC. Amanda and Whitney both went to Boyd School of Law and have been active members of the CCBA since graduating in 2015.
About the article
This article was originally published in the Communiqué (May 2025), the official publication of the Clark County Bar Association. See https://clarkcountybar.org/about/member-benefits/communique-2025/communique-may-2025/. The printed magazine was mailed to CCBA members on April 30, 2025.
The articles and advertisements appearing in Communiqué magazine do not necessarily reflect the opinion of the CCBA, the CCBA Publications Committee, the editorial board, or the other authors. All legal and other issues discussed are not for the purpose of answering specific legal questions. Attorneys and others are strongly advised to independently research all issues.
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