What is changing in estate planning in 2016?

This is a question that many Nevada residents might be asking themselves as 2015 draws to a close. Estate planning is always evolving, and each year, some changes occur that could affect how people construct their estate plans. This is just one of the reasons that individuals should review their estate plans in order to ensure that they are still meeting the goals they set.

For example, each year, many Nevada residents give gifts to their heirs and transfer property to them. The federal government provides that a certain amount can be transferred tax free during the givers’ lifetimes. In 2016, that exemption will rise to $5.45 million per person, which constitutes a $20,000 increase from this year. Many people will never reach this limit.

The annual gift tax exclusion remained the same at $14,000. Individuals can still make gifts for education and medical needs so long as they are made directly to the school or medical provider. Spouses may also make gifts to each other in any amount. Spouses are still allowed to pool their federal exemption for a total of $10.9 million in 2016.

Since the state of Nevada does not have its own estate tax, residents will need to look to federal law when engaging in estate planning. Tax consequences are often just one of the considerations for individuals who are creating an estate plan. Providing for family members, charities and others also takes priority. The needs and dynamics of every family are different, and fortunately, estate planning documents can be tailored for every individual.

Source: fool.com, “Estate Planning in 2016: Here’s What You Need to Know“, Dan Caplinger, Dec. 11, 2015