The Lake Tahoe Region community is centered on the second deepest lake in the United States. This amazing and noteworthy freshwater lake, located in the Sierra Nevada is a huge tourist attraction year round. Lake Tahoe straddles the border between Nevada and California bringing visitors anxious to see these natural wonders to both states in droves.
Residents who live near this place count themselves lucky to have such beauty in their backyard. The formation of this basin began nearly two million years ago and the modern lake was created during the last Ice Age. Thankfully for us, time and nature created an alpine oasis for modern day Nevada residents and tourists alike to adore.
Tourists swarm to the Lake Tahoe Region
Lake Tahoe is certainly known for being a major tourist attraction in both Nevada and California. Home to numerous ski resorts and other tourist attractions, Lake Tahoe has a reputation for being a haven for those who like to hit the slopes. In addition to the epic winter activities, the mountain and lake scenery are also attractions throughout the year. Hiking, kayaking, sailing, and scuba diving are just a few of the many outdoor adventures that drive visitors to this region. Gambling is also a big tourist attraction, and it is just one of the indoor activities that adds to a rustic getaway around the lake. Local spas and eateries are also big in this area.
Luckily for tourists (and local business owners!) the Lake Tahoe region, although pretty high up at an elevation of 6,225 feet, is easily accessible. The Reno airport in Nevada is roughly an hour away from the area and the Sacramento airport is about two hours away on the California side. Driving around the lake and soaking up the amazing views until you get to your lodge or hotel is half the fun!
Construction to the area, which has given us many wonderful hotels and attractions, does have its drawbacks, however. Mining from the 1800s caused huge sections of the mountains to be cleared of trees. Also, modern land use has caused changes in the ecosystem as well as turned the light blue waters of the lake quite murky. As a result, environmental protection has become a high priority for the government and local residents in order to keep this stunning region healthy and beautiful for future generations to enjoy.
One Famous Estate: George Whittell, Jr.
If anyone understands the importance of an estate plan in Nevada, it’s George Whittell, Jr. This native of San Francisco was heir to one of the city’s most wealthy families. He grew his wealth by investing in the stock market and removing his funds before the crash of 1929. He then moved to Nevada to avoid California’s higher income taxes and proceeded to purchase pieces of land on the Nevada side of Lake Tahoe, eventually owning 95% of the shoreline, or roughly 40,000 acres, in that state. His love for seclusion led him not only to acquire all of this land, but to build the ravishing Thunderbird Lodge on some of it. Today, the lodge stands in Washoe County within the confines of Lake Tahoe Nevada State Park and is owned by the non-profit Thunderbird Preservation Society. Be sure to visit next time you are in the area!
Current Lake Tahoe Communities
Carson City is the largest town around the lake on either the California or Nevada side. In Nevada, there are several communities in both Douglas and Washoe counties that run up against those blue-crystal shores. More than a quarter of the population here is made up of families with young children under the age of 18. The median age for Douglas county is 47.4 years and for Washoe county it is 37 years, the time in a person’s life when they really should be thinking about securing their assets with a comprehensive estate plan.
This area is full of all the natural beauty and interesting activities that a retiree could ever hope for. With plenty of retirement communities around, Lake Tahoe is a great place to live. Whether you’re a local or looking to spend your final years in such a stunning setting, there are some things you should know about estate planning in Nevada.
Avoiding Nevada Estate Tax
Most people would agree that paying estate taxes is one of the major concerns in estate planning. Indeed, one of the primary goals of an estate plan is to decrease estate taxes or eliminating them altogether. There is no Nevada estate tax, on the state level, but that is not true for every state. Check with your state revenue department to be sure. However, the current federal estate tax rate is 40%, from every gross estate exceeding $5.45 million, as of 2016. Because of the exclusion for estates valued at less than $5.45 million, most estates are not required to pay estate taxes. But, if your estate is not exempt, you will want to find ways to avoid estate tax.
That means that you can either leave or give away up to that amount in assets, without any estate or gift tax being imposed. As long as your estate is worth less than this amount, you can avoid federal estate taxes entirely. The annual gift tax exclusion is $14,000 per recipient for each individual or a total of $28,000 per recipient when married couples combine their exclusions. If you exceed the $5.45 million lifetime exclusion amount, then your estate will be assessed taxes in the amount of 40% of the excess amount.
The lifetime credit is also portable
This lifetime exclusion or credit is also “portable” for spouses, meaning that if your estate does use the full exemption amount, your spouse can benefit from the remainder of that exemption. For example, if your estate is worth $1 million when you die, your spouse will be able to use the remaining $4.45 million towards his or her estate.
Using the unlimited marital deduction to eliminate estate taxes
If you are married another way to avoid paying estate taxes is to leave all of your assets to your spouse. No estate taxes would be imposed on those assets upon your death. Instead, the taxes would be due only upon the surviving spouse’s death. This marital deduction is unlimited, so you can leave all of your assets to your spouse tax-free.
Using a generation-skipping trust to avoid taxes
A “generation-skipping trust” is essentially a second-generation “bypass trust.” The gift of the income created by the assets is separate from the gift of the assets themselves. So, you can include provisions in the trust that a specified amount of property will be transferred to your grandchildren, while the income from these assets is distributed to one or both of their parents. This can be set up for a specified length of time, or until the parents’ death. After the death of the parents, the grandchildren would then receive the income from those assets and also gain control over the assets themselves.
If you have questions regarding estate taxes, or any other estate planning issues, please contact Anderson, Dorn & Rader, Ltd. for a consultation, either online or by calling us at (775) 823-9455.