Many residents in Nevada who are approaching retirement age are concerned about their estates. After a lifetime of work, they often wish to leave something to their children or grandchildren. Without proper estate planning, that task can become troublesome and expensive, often ending up in probate court. Now, seniors have to worry about losing money as new tax laws begin to go into effect.
Estate planning, when done properly and early, can help individuals and families keep more of their money by lowering their tax obligations. Some ways to accomplish this are to set up family-limited partnerships or certain types of trusts. To deal with estate taxes, individuals may want to consider what is known as a Stretch IRA. These are just a very few of the options that seniors have when it comes to planning for their children and grandchildren.
Some seniors may have considered moving to other states, such as Nevada, where taxes are lower or nonexistent. That plan can backfire, however, as 21 states have not adopted the federal rules excluding up to $5 million of estate tax assets. Relocating into one of these states could cost individuals and their heirs additional taxes. Before moving, check with the state tax code of where you want to move early on in the process.
In the end, Nevada residents should understand that estate planning can help them keep more of their money and make it easier to transfer assets later on. But much of the work involved in estate planning can be complex and hard to understand. For this reason, many prefer to work with professionals who are well versed in this area.
Source: USA Today, “Retired? Here’s how to cut your tax bill,” Mark Koba, Dec. 9, 2011