People in Nevada might want to take another look at their estate planning after the passage of the tax bill at the end of 2017. This bill raises the estate tax exemption for individuals to more than $11 million and for couples to more than $22 million. This means that some people who have created an estate plan that uses strategies to avoid estate tax may no longer need those strategies. In particular, married couples might simply leave the entire estate to a spouse. However, in some cases, there may still be good reasons to continue using bypass trusts and other tools.
For example, in blended families, a person may not want to simply have all assets go to a spouse. A bypass trust can help ensure that the children of the first spouse to die still get a share of assets. Another consideration is protecting assets from creditors. Trusts may also be the right choice for multigenerational planning. A bypass trust might be used if there is a reason to keep assets and appreciation out of the estate of the second spouse to die.
The higher exemption rate is set to expire in 2026. This means that people may want to consider lifetime transfers before that date to take advantage of the exemption.
Estate planning can be complex with or without having to consider estate taxes. The process is both practical and emotional in that people will need to consider which loved ones might be the best choices to act as executor or trustee or whether a professional would be a better choice. People may also need to consider things such as whether they might want to create a special needs trust for a loved one or if a beneficiary might be irresponsible enough with assets that the assets would be better managed with a trust.