You may have recently begun thinking about creating an estate plan. Taking this step could provide a number of benefits to you and your family, especially after your passing. You may have specific assets you want to protect to ensure that the right family member receives them, but you may also need to take precautions to prevent your estate from diminishing due to estate taxes.
You, and many other Nevada residents, may think that you do not need to worry about or plan to reduce estate taxes because you are not necessarily a wealthy person. However, before you completely disregard thinking about ways to reduce such taxes in the future, you may want to keep in mind that personal and legal matters can change.
Tax rules are in constant flux
Currently, the estate tax exemption limit is $11.58 million. You may not have assets that total even close to that number, so you think that you will not have to worry about estate taxes. It is worthwhile to remember that tax rules and laws are constantly changing. It seems as if, every year new, rules apply or alterations to existing rules have occurred. In fact, in 2001, the exemption limit for estate tax was $675,000, which is much less than the millions exempt today.
Though the exemption amount seems only to have increased, it does not mean that the tide of change will remain so favorable. In the future, the exemption limit could stop at a much lower level and one that could be closer to your estate’s worth. As a result, planning for such a scenario is wise.
You could come into money
Maybe you have made some sound investments here and there and have been able to earn a sizable but not enormous income from those investments. The current state of your investments does not necessarily predict what will happen in the future. Any sudden change could positively affect your current investments or new investments, and you may come into more money than you had imagined.
Discussing your options
Though you may feel confident that you will not need to reduce estate taxes, you may want to remember that no one can predict the future. Estate planning is often helpful because of that unpredictability, and while you are looking into your planning options, you may wish to discuss your options for reducing estate taxes with a knowledgeable attorney.