Many Nevada residents may have prepared an estate plan at some point in their lives and assumed that is sufficient, but this is not always the case. Estate plans can often be improved or may need changes over time. For example, people may not have life insurance policies. A life insurance policy can have a number of uses. It can provide immediate funds for expenses associated with the estate. It can also help the family financially if they were depending on the income of the decedent. Additionally, life insurance can provide tax-free funding to the next generation.
The last thing that most Nevada families want to do is sit around the dinner table discussing an estate plan or trusts. No one likes to think of their inevitable mortality. However, having the right plan in place can be a huge blessing during a time of extreme loss.
Parents of adult children in Nevada who have significant assets might wonder what they should do with their assets in an estate plan to protect them for their children. An example might be a couple who has about $1.5 million in assets and no debt, including no mortgage.
Nevada residents may benefit from using a trust as part of their estate plans. However, determining what type of trust to have is just one issue that they will need to contend with. It is also important to spend time thinking about who would be the best fit to act as the trustee. Ideally, the person who is chosen to fill the role will understand what the grantor wants to accomplish with this tool.
The 2020 presidential election could have implications for Nevada residents and others who currently have estate plans. For instance, if Elizabeth Warren or Bernie Sanders become president, there could be a reduction in the gift tax exemption or the estate tax exemption. Today, the gift and estate tax exemptions are set at $11.4 million. While some may choose to wait to alter their plans until anything actually changes, that may not necessarily be the best strategy.
Nontraditional family structures, such as blended families, are on the rise, and these families need estate planning just like everyone else does. However, estate planning advice is often written for more traditional families, even though these types of families are increasingly in the minority. People in Nevada whose families do not fit the traditional model may need to keep additional considerations in mind when creating an estate plan.
People living in Nevada may inadvertently create problems for their heirs through poor estate planning. While estate planning mistakes can take many forms, one of the most common involves beneficiary designations.
Nevada residents who are expecting to receive an inheritance after getting married have ways to protect that money. One option could be to put the cash into a trust. The language of the document could stipulate that the money is to be for the benefit of a child or grandchild. Another option could be to create a prenuptial or post-nuptial agreement with a spouse that allows the inheritance to remain separate property.
Trusts can be an important part of estate planning, helping Nevada residents to achieve their goals with a higher level of customization, control and privacy. However, flexibility can also be an important part of a trust. Tax laws and inheritance laws can change over time, as can individual family relationships. The Tax Cuts and Jobs Act drew attention to this issue, as many of its provisions sunset at the end of 2025. This means that Congress will actively need to renew them in order to keep the increased estate tax exemptions and other provisions in place.
Trusts can be an important part of estate planning for many people in Nevada. These instruments allow people to pass on important belongings and assets with a higher level of privacy. They also offer a greater amount of discretion and control. A revocable trust can be used along with a power of attorney to make sure that the grantor's assets are handled well throughout their life, even if they face incapacity or cognitive decline. It allows property to pass after death without going through probate courts, giving a higher level of protection to the decisions made by the person passing on their estate.