One of the key benefits of estate planning is the overall reduction in taxes. Creating a comprehensive estate plan can help your loved ones receive their inheritance without having to give back a large portion of taxes. Two of the most common forms of taxes involved in estate planning are inheritance tax and estate tax. Our attorneys explain the difference between inheritance and estate tax.
Difference Between Estate Tax And Inheritance Tax
The biggest difference between inheritance tax and estate tax is who is responsible for paying it. Estate taxes are often paid by the estate, but inheritance taxes are the responsibility of the beneficiary of the assets. The tax is typically calculated separately for each beneficiary, who is responsible for paying their inheritance taxes.
An inheritance tax is calculated based on the value of the individual assets received from a deceased person’s estate. The beneficiaries of the inheritance would be responsible for paying inheritance taxes. An estate plan is calculated based on the net value of all the property owned by a decedent as of the date of death. The estate’s liabilities are subtracted from the overall value of the estate to arrive at the net taxable estate.
Nevada Is a No Estate Tax State
Nevada does not impose an estate or inheritance tax upon death; therefore, less money is deducted during probate. Although people don’t have to worry about estate or inheritance taxes in Nevada, beneficiaries still have to pay federal estate taxes to the IRS.
Experienced Estate Planning Lawyers in Las Vegas
Fully understanding probate and estate tax laws can be complicated. If you want to create a comprehensive estate plan, but you’re worried about the taxes your beneficiaries will incur, our team at Hurtik Law & Associates is here to help you. We have the knowledge, skills, and experience needed to help you create an estate plan suited for your needs.
Contact us online or call (702) 323-5750 to schedule a consultation!