SimplyTrust Knowledge Base

A: The Illinois estate tax affects more people than many expect (although there's no inheritance tax). If your taxable estate tops {{ IL.tax.estate_exemption }}, the Illinois estate tax applies—whether you live in the state or simply own Illinois real estate. Rates are graduated, topping out at {{ IL.tax.estate_top_rate }}.

A: At its core, community property means earnings during marriage—and items bought with those earnings—are jointly owned. By contrast, assets owned before marriage, plus gifts and inheritances to one spouse, usually remain separate. Debts work similarly: many obligations taken on during marriage are shared. Rules vary by state, but that’s the broad frame.Nine states use community property as the default marital property system (as opposed to equitable property). They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Several states also offer opt-in community property—typically by creating a special trust or agreement. These include Alaska, Florida, Kentucky, South Dakota, and Tennessee. Opt-in frameworks can give couples certain community property benefits even in otherwise non-community jurisdictions.

A: Overall, both states deliver probate avoidance and privacy. Nevada stands out for having no state estate or inheritance tax, while Hawaii has no inheritance tax but overlays a separate estate tax that can matter for larger estates.

A: For years, many states relied on a federal "pick-up" system that shared federal estate tax revenue with the states. When Congress phased out that credit in the early 2000s, some states let their taxes lapse, while others rebuilt independent systems. Hawaii chose the estate-tax route. It enacted Chapter 236E to apply to residents' estates and to nonresidents with Hawaii-situs property for transfers after January 25, 2012. The state did not add an inheritance tax. Today, six states impose inheritance taxes, and Hawaii isn't one of them.

A: For decades, most states didn't run standalone estate taxes. Instead, they used a "pick-up" tax that matched a federal credit; the state simply "picked up" part of the federal tax bill. When Congress began phasing out that credit in 2001, pick-up taxes faded.

A: An inheritance tax is paid by the beneficiary and depends on the recipient's relationship to the person who passed. Only a handful of states still use it—currently Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania (Iowa ended its tax January 1, 2025). Nevada is not on that list.

A: Nevada once had an estate tax. But it wasn't a standalone tax. It was a "pick-up" tax that simply claimed a portion of the federal estate tax already owed. When Congress phased out the federal credit that funded pick-up taxes (effective for passings after December 31, 2004), Nevada's tax effectively disappeared. The Nevada Department of Taxation confirms that only estates for passings on or before December 31, 2004 might still file. Later passings owe nothing to the state.

A: No, there is no requirement for grantors or trustees of a Nevada trust to be residents of Nevada.

A: Nevada is a favorite for its lack of state taxes, strong privacy protections, and robust asset protection laws. Therefore, it's an ideal jurisdiction for trust formations.

A: Yes, Nevada allows the use of spendthrift clauses. They offer significant protection from creditors, making it difficult for creditors to access trust assets.

A: The day-to-day benefits are similar—control now, smoother administration later. In either state, a revocable trust lets you keep control while you're living and designate who steps in later. Properly funded trusts can keep most assets out of probate, which can save time and reduce paperwork for loved ones.

A: For decades, Washington State imposed an inheritance tax (a tax on what heirs receive). In November 1981, voters approved Initiative 402, repealing the inheritance and gift taxes effective January 1, 1982. In their place, the state kept a "pick-up" estate tax equal to the federal state death-tax credit—essentially piggybacking on federal law.

A: For passings in 2026, Washington's exclusion amount is {{ WA.tax.estate_exemption | default: "$3,076,000" }}. Therefore, only amounts above that figure are subject to state estate tax (but no inheritance tax). Also, the rate schedule is graduated. It starts at 10% and rises in steps to {{ WA.tax.estate_top_rate | default: "35%" }} for Washington taxable estates over $9 million.

A: Used thoughtfully, the right of survivorship is a practical tool that streamlines transfers, reduces court involvement, and keeps loved ones focused on what matters—not paperwork. It’s a powerful way to avoid probate. With joint tenancy (often called JTWROS), a decedent’s share transfers instantly to the survivor and skips probate—even if a will says otherwise. Bank and brokerage accounts titled JTWROS work the same way. Real estate can be titled to include survivorship. Through joint tenancy, tenancy by the entirety, or (in certain states) community property with right of survivorship. So the deed flows directly to the survivor at passing.

A: Revocable trusts in Vermont versus Nevada turns on tax context and drafting habits, not on whether trusts "work." Both states let you keep control while living, avoid most probate, and maintain privacy. Vermont's UTC-based framework and estate tax create one planning backdrop. Nevada's NRS system and no state-level transfer taxes create another.

A: Vermont has long favored an estate tax structure rather than a separate inheritance tax. Before the early 2000s, Vermont tied its system to the federal one as many states did. When that federal credit phased out, Vermont maintained its own stand-alone estate tax.