The start of a new year may be a good time for Nevada residents and others to review their estate plans. In 2020, there will be a presidential election, and shifts in political philosophy could have tax and other estate planning consequences. For instance, some believe that estate tax rates could increase as the estate tax exemption goes down. While it is important to note that nothing is certain before it happens, it is generally a good idea to be proactive in case something does change.
Ideally, individuals will review their current estate plans with a CPA or another financial adviser. This professional may be able to help someone create a strategy that minimizes his or her tax bill without the need to make large gifts. One potential strategy may be to create a spousal lifetime access trust (SLAT). Creating a domestic asset protection trust (DAPT) may also be an option assuming it is available where the trust is domiciled.
Those who have revocable grantor trusts may want to take an inventory of the assets they contain. This may make it easier to determine which ones have appreciated and what to do with them. In some circumstances, it may be possible to sell an asset and receive a step-up in its cost basis. The step-up could minimize or eliminate the need to pay income or other taxes on those items.
A will, trust or another estate plan document may make it easier to retain control over one’s assets. It may also make it possible to minimize taxes owed on the sale or transfer of an asset after an individual passes on. An attorney may help someone create an estate plan or make changes to those that already exist to account for life events or tax law changes.