Henderson Office: 702.433.4455
Las Vegas Office: 702.254.4455
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The state of Nevada has a strong policy interest in protecting the surviving spouse and minor children of a decedent.  Nevada law has a special provision that provides protection for a surviving spouse and/or minor children where estate assets are less than $100,000.  NRS 146.070 provides:

  1. If a person dies leaving an estate the gross value of which, after deducting any encumbrances, does not exceed $100,000, and there is a surviving spouse or minor child or minor children of the decedent, the estate must not be administered upon, but the whole estate, after directing such payments as may be deemed just, must be, by an order for that purpose, assigned and set apart for the support of the surviving spouse or minor child or minor children, or for the support of the minor child or minor children, if there is no surviving spouse. Even if there is a surviving spouse, the court may, after directing such payments, set aside the whole of the estate to the minor child or minor children, if it is in their best interests.

This statute permits the entire estate to be set aside and distributed to the surviving spouse and/or minor children for their support.  Further, if the court deems it just, the funds can pass to the surviving spouse and/or minor children prior to creditors being paid and regardless of how the funds are distributed pursuant to the decedent’s will.

One of the reasons for this Nevada law is to make sure that if a deceased leaves a small estate and a surviving spouse or minor children, the funds may be used to support the decedent’s survivors and avoid the need for state aid.  Feel free to contact our office should you have any questions about transferring a small estate to a surviving spouse or minor children.

Attorney – Corey J. Schmutz

Clients of the firm will soon be receiving copies of our Client Focus newsletter that goes out several times per year. One of the articles in this installment of the Client Focus teased readers with some examples of application of the 3.8% Net Investment Income Tax.  As promised, here are a couple simplified examples of application of the new tax:

Example 1:  A married couple has salary income of $220,000 and investment income of $48,000.  Since their MAGI is $268,000 (and exceeds the $250,000 limit for married individuals), they will be subject to the NIIT.  They are taxed 3.8% on the lesser of: 1) $48,000, their investment income, or 2) $18,000, the amount by which their MAGI exceeds the $250,000 threshold for married individuals.  Their additional tax would be $684  ($18,000 x 0.038).

Example 2:  George, a single person has salary income of $175,000 and interest and dividend income of $20,000.  MAGI would be $195,000 so George would not be subject to the 3.8% NIIT.  However, let’s assume that George retired at the end of this year and at retirement was required to exercise $30,000 worth of deferred compensation stock options.  This $30,000 is not part of net investment income, but does increase George’s MAGI to $225,000 (which exceeds the $200,000 limit for single individuals).  The 3.8% tax will apply to George’s $20,000 of investment income and result in $760 of additional tax (which is less than the $25,000 of excess MAGI).

If you didn’t get a copy of our Client Focus newsletter and you would like to read it please click here (warning: large file size).

Jason C. Walker

Henderson Office
2600 Paseo Verde Parkway, Suite 200
Henderson, NV 89074
Phone: 702.433.4455
Fax: 702.451.1853
Las Vegas Office
10000 W. Charleston Blvd., Suite 100
Las Vegas, NV 89135
Phone: 702.254.4455
Fax: 702.254.3330
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