Planning your estate can be a complex process. You work hard for your legacy and wealth. If you want to pass your money or property to your loved ones, it may come at a price to the recipient. Understanding your family’s financial implications can be complicated. It is important to hire an estate planning lawyer to assist if you want to give your family what they deserve. At Lobb & Plewe, Attorneys at Law, we have a skilled team of estate planning lawyers who handle both estate and gift tax planning in Nevada.
Estate taxes are taken out of a deceased’s estate directly after their passing. Heirs may also be subjected to inheritance taxes after they receive their inheritance. Nevada repealed its estate tax law in 2005, making it one of the 38 states that do not apply the tax. The state does not charge estate, inheritance, or gift taxes; however, the federal government does.
Understanding Federal Taxes on Gifts and Inheritances
The federal tax system can be difficult to understand. There is a gift tax, an estate tax, and a generational skipping transfer tax. According to a recent Gallup poll, only 46% of Americans have an estate plan. It is important to consult an estate planning attorney to fully understand your loved one’s tax responsibilities. These are the various federal tax implications connected to estate planning:
- Gift tax is collected when property is transferred from one person to another without the gifting party receiving something of equal value in return. The gift tax is meant to prevent people from avoiding estate taxes by giving away their assets prior to death. There is an annual exemption for gift tax. In 2025, the amount is $19,000 per person. If you are married, the gift can be worth up to $38,000 without any tax penalty.
- Estate tax is collected on property that is transferred to an heir at the time of death. The amount taxed is based on the total amount of the deceased’s assets. These calculations are completed on a Form 706. This form is lengthy and complex. It should only be done by an experienced estate planning attorney.
The 2025 estate tax exemption is $13.99 million for an individual and $27.98 million for couples. This tax exemption may be applied to larger assets gifted prior to death if, over your lifetime, you have gifted less than the IRS threshold.
- The unified tax credit combines the gift tax lifetime exemption and the estate tax exemption. This credit applies a unified rate schedule to your cumulative taxable estate and taxable gifts. Any tax due is calculated after applying the credit. The credit is applied against the gift tax first for taxable gifts. If any credit exists after death, then it is applied to the estate tax.
It is important to remember that in the eyes of the federal government, both estate and gift taxes are progressive. This means that the rate increases as the value increases. Having a seasoned estate planning attorney is necessary in Nevada to assist with federal tax forms and filings through the State of Nevada Department of Taxation.
FAQs
Is There a Gift Tax in Nevada?
There is no gift tax in Nevada. This does not mean that you do not need to worry about paying taxes on gifts at all. The federal government will still try to collect taxes on gifts if your assets are valued over the tax exemption thresholds set by the IRS.
How Do I Gift a Piece of Property to a Family Member Without Paying Taxes?
Gifting a piece of property to a family member can come with tax liabilities. One way to avoid paying taxes is by giving under the federal exemption amount of $19,000 per individual or $38,000 per couple. An estate planning lawyer can advise on the most effective way to gift large amounts and avoid hefty tax penalties.
Can My Spouse and I Split a Gift to Avoid Paying Federal Taxes?
Yes, you and your spouse can absolutely split a gift to avoid paying federal gift taxes. This can be done by applying the annual allowed exclusion for couples. Both spouses must consent to the gift splitting, and you may each need to file a federal gift tax return to report the split, even if there is no gift tax. According to the Congressional Budget Office, only 2,000 Americans paid a gift tax in 2018.
What Is the Difference Between Gift Tax and Estate Tax?
Gift tax is collected when property is transferred from one person to another and something of equal value is not received in return while the giver is still alive. Estate tax is collected on property that is transferred to an heir at the time of death. The federal government collects both, but the state of Nevada does not.
Does Having a Will Help My Heirs Avoid Tax Penalties?
According to a recent estate planning study, 32% of adults reported having a will in 2024. Having an active will does not directly affect the federal tax penalties your heir may face. Leaving your family without a will in place can lead to excessive costs and stress for them. A will, however, does help streamline the process for your heirs.
Hire an Estate Planning Lawyer
A skilled estate planning lawyer can help simplify the process of planning for your family’s future. There are many nuances involved with calculating taxes on gifts and estates. Even though the state of Nevada does not charge taxes on gifts or estates, the federal government does. Understanding the annual and lifetime tax exemptions can be tricky and difficult to calculate alone.
Here at Lobb & Plewe, Attorneys at Law, we have a team of skilled lawyers ready to meet with you today regarding your estate planning needs. Our firm was founded in 1993 and has a Nevada office located right in Las Vegas. We understand how complex and emotional this process can be. Contact our office today. We have a skilled legal team ready to help with your estate planning case.
