Nevada Estate Planning Considerations
Community Property State
There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state that gives both parties the option to make their property community property.
Domicile is a person’s legal permanent residence and may not be where they currently live. For those in the military, people who have homes in several states, or those who have moved frequently, figuring out which state is their proper domicile is vital.
IRS Publication 555 provides guidance and states that generally, community property is property:
- That you, your spouse, or both acquire during your marriage while you and your spouse are domiciled in a community property state.
- That you and your spouse agreed to convert from separate to community property.
- That cannot be identified as separate property.
Guidance is also given regarding what is considered separate property:
- Property that you or your spouse owned separately before your marriage.
- Money earned while domiciled in a noncommunity property state.
- Property that you or your spouse received separately as a gift or inheritance during your marriage.
- Property that you or your spouse bought with separate funds or acquired in exchange for the separate property during your marriage.
- Property that you and your spouse converted from community property to separate property through an agreement valid under state law.
- The part of property bought with separate funds was purchased with community funds and amount with separate funds.
A premarital agreement is an agreement that may change the result of the property division.
Last Will and Testament
The minimum age of a person competent to make a will is 18.
The number of witnesses necessary to execute a will is two.
Uniform Act on Transfers to Minors
The original custodial gift may be a life insurance policy or annuity contract.
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
- The minor child reaches age 18 (though the donor may override by specifying any termination age up through 21 for a transfer by gift, or 25 for transfers made by will, trust, or exercise of a power of appointment).
- The minor child dies.
Dying without a Last Will, the Nevada laws of Intestacy.
- If there are no descendants, parents, siblings, or their descendants, —100% of the estate.
- If there is only one child, or the descendant of one child, —50% of the estate (with the other 50% going to the child or descendants of the child)
- Suppose there is more than one surviving child, or a child and the descendants of one or more deceased children—one‐third of the estate (with the remaining two‐thirds going equally to the children and the descendants of any deceased child by representation). The Nevada statutes do not define representation.
- If there are no surviving descendants, but one or both parents survive—50% of the estate (with the other 50% going to the surviving parent or both parents equally)
- If there are no surviving descendants or parents, but one or more siblings survive—50% of the estate (with the other 50% going equally to the siblings of the decedent)
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
- 100% to children, share and share alike, and to the descendants of each deceased child, by representation, the same share that the parent would have received if the parent had been alive at the time of the decedent’s death
If there is no surviving spouse or child:
- 100% to the descendants of any children, by representation, ad infinitum
If there is no surviving spouse, child, or descendant:
- 100% to a surviving parent or parents equally
If there is no surviving spouse, child, descendant, or parent:
- 100% to siblings and their descendants by representation, as follows:
- to siblings equally, and
- to the descendants of each deceased sibling, by representation, the same share the parent would have received if the parent had been living at the decedent’s death
If none of the above:
- Intestacy laws outline further distribution steps to “next of kin” and their descendants. See NRS §134.070.
- If no legally described recipient can be found, estate assets go to the state of Nevada.
- Digital Assets
- Nevada follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
Nevada does not impose an inheritance tax.
Credit Estate Tax
Nevada imposes an estate tax equal to the maximum credit allowed under the federal tax code for paid state estate and inheritance taxes under IRC Sec. 2011. However, the current federal tax code does not permit a credit for paid state estate or inheritance taxes. Therefore, there is no credit estate tax in effect at this time.
Nevada imposes a GST tax equal to the maximum credit allowed under IRC Sec. 2604 for paid state GST tax. However, the current federal tax code does not permit a credit for paid state GST tax. Therefore, there is no current GST tax.
Nevada does not impose a gift tax.