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Potential changes could affect estate planning tools in Nevada

As our readers who are familiar with this column know well, there are many tools available to those seeking to protect their assets from the federal estate and gift tax. Some in Nevada were particularly happy when the American Tax Relief Act was enacted early this year because it established a specific amount that is subject to federal estate tax following an individual's death. Now, the same people are concerned about potential changes to the estate planning laws regarding the taxation of trust assets.

The potential changes could affect trusts that are commonly used by those engaged in estate planning in Nevada. Though no changes have yet been made to the applicable laws, they are up for consideration as those in the national government debate the federal budget. Proposed changes could affect how much of a trust is subject to the estate tax.

GRAT and IDGT trusts are included in the talks. In each of these types of trusts, money or assets are placed in the ownership of the trusts while the creator is alive. Though they are different, assets can be made available to the creator while he or she is still alive and avoid some tax consequences as well. If the laws are changed, some beneficiaries could find that their potential inheritance is less than they expected.

Estate planning in Nevada can seem intimidating due to the various laws and financial planning strategies to consider. Because of the wide array of options available, some find it helpful to gain a better understanding of commonly used tools such as wills and trusts. This review can assist a person in ensuring that they make the best choices for themselves while they are alive and for their future heirs.

Source: LifeHealthPro.com, "Budget proposal targets estate planning tools," Robert Bloink and William H. Byrnes, April 8, 2013

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