Do I need a will?
Although a will is not required, having a will or some other written instrument (See also, my page on Trusts) ensures your property will go to the beneficiaries you want if you pass away. Without a will, property passes intestate, meaning according to the law. For instance, if a person dies without a will, Nevada will dictate his property goes half to a surviving spouse and half to his surviving child, but if he has no child, the other half would go to a surviving parent or parents. This distribution may be contrary to what you want. In addition, a will can also nominate a guardian for any minor children you may leave behind to care for them and/or their property. A will can also appoint an estate executor of your choosing, rather than leaving that decision to the court. Thus, I would strongly recommend you have a will drafted at the very minimum as part of your estate plan. An attorney can ensure you consider and include all desirable provisions.
What can a will include?
A will can include all personal property, real estate, and financial interests, such as stocks or business ownership. Some forms of property or interests can pass outside of a will, such as through a trust or by naming a beneficiary. Life insurance policies or payable-on-death bank accounts, for instance, can pay directly to your designated beneficiary without probate. Real estate that is held with a Joint Tenant with Right of Survivorship or under a Deed Upon Death can also pass outside of probate. Even if you can use other means to transfer property without a will, I would still suggest drafting a will to address any property that you may fail to address by other means.
Would my estate owe taxes?
Nevada has no inheritance tax or state estate tax. As for federal estate taxes, the personal exemption in 2015 is $5.43 million, which will likely increase over time with inflation. So, unless your estate is valued at over $5.43 million in 2015, your estate can claim an exemption to federal estate tax. The value of your estate is derived from the fair market value of the property contained within at the time of your death, which the IRS defines as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” (See IRS Estate Tax Regulation §20.2031-1). Note that any taxable gifts that you make during your lifetime (gift tax) will subtract from the exemption amount at death.
Married couples can essentially enjoy double the exemption amount, where if one spouse dies first, the surviving spouse can use any unused amount from the first spouse’s exemption. For example, if one spouse dies in 2015 and left a $1 million estate, his unused $4.43 million exemption can transfer to his wife to use as well, essentially giving her an exemption of $9.86 million in 2015 for gift and estate taxes.