You pay tax on your income as you earn it and on your property as you acquire it. You may even have to pay taxes on the value of your assets when you file your income tax return every year.
The idea that there could be yet another tax that applies to that property before you can transfer it to others may frustrate you, but at least you can plan for this final tax. Estate taxes reduce the value of the inheritance someone leaves for their loved ones when they die. Estates have to pay these taxes before distributing property to any beneficiaries.
You can potentially plan now to limit what you pay in estate taxes or even avoid them altogether.
Nevada does not levee an estate tax
Unlike a few other states that do assess estate taxes, Nevada does not require anything from an individual’s estate, even if it is worth millions of dollars. However, those who died in Nevada may still be subject to federal estate tax rules.
Those with more than $12,060,000 worth of property in their names will have estate taxes taken from their holdings after their death. The greater the value of the estate, the higher the tax rate. The maximum tax could be 40% just to the federal government.
Advance planning can help limit what property is in your name when you die and therefore the value of your estate and what taxes may apply. Recognizing liabilities that could limit the legacy you leave when you die, like federal estate taxes, can assist you during the estate planning process.