Changes to the tax law or other events that happen during a person's life may cause estate planning problems. For instance, a trust may become obsolete because of a change to the tax code or because it fails to provide for a newborn child. If an irrevocable trust does become outdated for any reason, it may be possible to change with permission from a judge or from the trust's beneficiaries.
Nevada residents may be interested in using an irrevocable trust as part of their estate plans. An irrevocable trust is one that generally cannot be modified without the consent of all of its beneficiaries. Once an item is transferred to the trust, the trust obtains full ownership of that item. Irrevocable trusts offer a variety of potential benefits such as shielding assets from being seized to satisfy a judgment or as part of a divorce settlement.
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.
In 2019, the federal estate tax exemption was $11.4 million. In 2018, there were only 1,900 families that were subject to this tax, which means that it has become less of an issue for most people who are creating their estate plans. Typically, Nevada residents and others are more concerned about limiting capital gains taxes or otherwise making a plan as easy to carry out as possible. However, the SECURE Act may require individuals and families to adjust their current plans.
Business owners in Nevada and throughout the country will ideally take the task of estate planning seriously. Doing so may help to ensure that a company is successful after the original owner no longer owns or operates it. While many people wait until later in life to put together such a plan, it may be best to do so as early as possible. A company owner can start the planning process by naming potential successors long before any changes need to take place.
Nevada families may struggle to talk about estate planning, but it is an important conversation to have. Often, these discussions only occur in the middle of health crises. A better approach is to talk about it early. This can be done with a financial or legal professional present who can advise on the technical elements while the family deals with the emotional aspects.
Many people in Nevada know that establishing a trust can be an important part of estate planning that provides greater privacy and flexibility. However, they may wonder if there are benefits to establishing more than one trust to cover different types of property. Since the trust becomes the legal owner of the property in question, more than one trust cannot address the same items. In addition, making a trust is different from making a will. If people make a new will, it overrides completely all prior documents. With a trust, a new trust does not replace the old one although a restatement or amendment of an original trust can typically be made.
Many families have dysfunctional dynamics that can make estate planning difficult, and in families with high net worth, the stakes can be particularly high. However, the basic advice that experts give for high net worth families can apply to most other situations involving estate planning well. The best way to get the outcome a person wants is with a combination of careful planning and communication.
Trusts can be an important and useful part of a Nevada estate plan, but there are some circumstances under which a person may want to revoke a trust. If the trust is irrevocable, that can be a complicated process. To revoke a revocable trust, though, the person should follow a few steps. It may be advisable for a person to consult an attorney before taking any action that will impact his or her estate plan.
Parents in Nevada and throughout the country may be tasked with raising children who have a mental or physical disability. These disabilities may make it difficult or impossible for children to provide for themselves when they are older. One way that parents can provide for their special needs children is to create a special needs trust. A primary benefit of a trust is that it protects a child's inheritance against creditor claims.