Nevada does not charge estate or inheritance taxes. In this detailed guide of Nevada’s inheritance laws, we break down intestate succession, probate, what makes a will valid and more. If you’d like professional guidance on your estate planning, or just need help investing your inheritance, you can use SmartAsset’s advisor matching tool to find a financial advisor in your area.
Does Nevada Have an Inheritance Tax or Estate Tax?
Under Nevada law, there are no inheritance or estate taxes. It is one of the 38 states that does not apply an estate tax. Nevada repealed its estate tax, also called a pick-up tax, on Jan. 1, 2005.
Estate taxes and inheritance taxes are similar, but there are some important differences to note. Estate taxes are taken out of the deceased’s estate immediately after their passing, while inheritance taxes are imposed upon the deceased’s heirs after they have received their inheritance.
Nevada also does not levy a gift tax. Remember, the federal gift tax is applied once you give any individual more than $15,000 in one calendar year. Give any less than that, and there is no federal gift tax. As for other taxes, it has no state income tax – including retirement income – and low property taxes.
Other Necessary Tax Filings
- Inheritance tax from another state – Even though Nevada does not levy an inheritance tax, if you inherit an estate from someone living in a state that does have an inheritance tax, you will have to pay it, even though you live in Nevada.
- Federal estate tax – The federal estate tax will be applied if your inheritance is more than $11.58 million in 2020, though you will be taxed on the overage, not the entire estate. This tax rate can be as high as 40%.
To file any of these estate-based returns, you’ll need to apply for an employer identification number (EIN) with the IRS. You can do this online, by fax or via mail.
Dying With a Will in Nevada
As with any state, dying with a valid will in Nevada is always the best way to go (pun intended). If you die in Nevada with a valid will and last testament, your estate will be distributed according to that will. However, if you die without one in place, your estate will be subject to the state inheritance laws.
Remember, dying with a valid will is called testacy while dying without a will and last testament is called dying intestate.
In Nevada, the requirements for a testate will include being at least 18 years of age and of sound mind, the will must be signed by both the testator and two witnesses, it must be in writing, and it must name a beneficiary. However, the state of Nevada does recognize both handwritten and electronic wills that comply with state law.
In Nevada, an estate skips probate if it’s less than $20,000. Any more than that, though, and it must go through probate to be settled. However, in Nevada, you can make a living trust for many of your assets, which will help your heirs sidestep probate altogether.
In Nevada, an estate skips probate if it’s less than $20,000. Any more than that, though, and it must go through probate to be settled. How probate is handled in Nevada depends on the size of the estate. If it’s between $20,000 and $100,000, you can request that probate be skipped and distributions made without court intervention.
For an estate worth between $100,000 and $200,000, a simplified probate process can occur. In the case of larger estates, though, full-length probate will likely occur.
Nevada has not yet adopted the Uniform Probate Code, a standardized set of probate procedures used in 15 states.
Dying Without a Will in Nevada
If you die without a valid will and testament in Nevada, your estate is subject to the state’s inheritance laws or intestate succession laws, though there are some exceptions – mainly, assets for which you’ve already named a beneficiary will be exempt from intestate laws.
These include life insurance policies, retirement accounts, jointly owned property, property in a living trust, accounts that are transfer-on-death or payable-on-death, or assets with a transfer-on-death deed or registration, such as real estate or vehicles.
Keep in mind that apart from these exceptions, the remainder of your estate will be subject to Nevada inheritance laws should you die without a valid last will and testament. This means your assets will likely have to go through probate, which can be a time-consuming and expensive process.
Spouses in Nevada Inheritance Law
In Nevada, intestate deaths can be tricky, since Nevada is a community property state. This means that spouses each own half of any assets received during the marriage. This supersedes who actually paid for the property or whose name is on the deed. Of course, there are exceptions to (nearly) every rule. In this case, property exempt from community property state laws are those given to or inherited by one spouse by a separate party. This, along with property acquired prior to the union, is considered separate property.
So how does that affect inheritance laws in Nevada, which does not recognize common law marriages? First, if you have no children and die intestate in Nevada, your spouse would inherit your entire estate. This is the case even if you die leaving behind children or other heirs.
But if you die leaving behind a spouse, descendants, or other heirs, and owned both community and separate property, your spouse will inherit your half of the union’s community property, and any separate property is then split between the spouse and living heirs, if available.
Children in Nevada Inheritance Law
Children are entitled to part of your estate should you die without a will or last testament in Nevada only if you owned separate property, which is property that is either acquired prior to your marriage or inherited or gifted during your marriage to just you from a third party.
How much a child will inherit also depends on how many children are in the picture, plus if the deceased has a living spouse. For example, die intestate with a spouse and one child in Nevada, and your separate property will be split evenly between the two; die with a surviving spouse and more than one child and ⅓ of your separate property will be inherited by your surviving spouse, while the remaining ⅔ is split between your children.
Keep in mind that in order for children to be entitled to intestate property in Nevada, they must be legally recognized children.
|Intestate Succession: Spouses and Children|
|Inheritance Situation||Who Inherits Your Property|
|Spouse, but no children, siblings or parents||– Entire estate, including both community and separate property, to spouse|
|Children, and spouse, but no separate property||– Spouse inherits everything|
|One child and spouse and a mix of community and separate property||– Spouse gets all community property; separate property is split between spouse and child.|
|Children and spouse and a mix of community and separate property||– Spouse gets all community property; ⅓ of separate property goes to spouse, remaining ⅔ is split among children.|
Unmarried Individuals Without Children in Nevada Inheritance Law
In this case, being unmarried and dying intestate in Nevada is a bit easier to navigate, since there is no need to decipher between community and separate property. Generally speaking, if you are unmarried and die intestate in Nevada and have children, your children will inherit your estate in equal shares.
If you die with no children but with living parents, your estate will pass on to your parents. If your parents are not alive, the estate then goes to your siblings. If your parents are no longer living and you do not have siblings or they are no longer living, your estate will go to your closest living relative.
And as is the case in many other states, die without a spouse or any living relatives, and your estate will escheat, meaning it goes back to the state of Nevada.
It’s also worth noting that the above-mentioned scenarios are only enacted in the case of an intestate estate. If the deceased has a valid will, it will take precedence over a state’s succession law
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|Parents, but no spouse, children, or siblings||– Entire estate to parents|
|Parents are deceased, but no spouse or children||– Estate split among siblings in equal shares|
|No living parents or siblings||– Estate goes to closest living relative|
Non-Probate Nevada Inheritances
As with many states, there are certain assets that do not pass through probate. These include property in a living trust, life insurance policies, retirement accounts such as IRAs, 401(k)s and Roth IRAs, bank accounts that are payable-on-death or vehicles that are transfer-upon-death, and any jointly owned property.
Other Situations in Nevada Inheritance Law
There are some unique situations that pop up in Nevada inheritance law. First, the state does not discern between half and whole relatives. Both inherit equal shares. Relatives are entitled to their fair share of your estate, regardless of immigration status.
Perhaps most interestingly, the Silver State employs the “killer rule,” which says that if someone kills you, they are not entitled to part of your estate. It seems fair enough.
Resources for Estate Planning
Managing your own estate, or handling the intricacies of inheriting money from the estate of a loved one, can get complicated. That’s why many people choose to work with a professional.
The SmartAsset financial advisor matching tool will pair you with as many as three nearby financial advisors equipped to handle your estate and inheritance planning needs. If you’re ready to work with a financial advisor in your area, get started now.
Photo credit: ©iStock.com/bluejayphoto, ©iStock.com/ChrisBoswell, ©iStock.com/Kiyoshi Tanno