SimplyTrust Knowledge Base

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.

A: Vermont levies an estate tax only when an estate exceeds {{ VT.tax.estate_exemption | default: "$5,000,000" }}. Anything above that threshold is taxed at a flat {{ VT.tax.estate_top_rate | default: "16%" }}. Amounts under {{ VT.tax.estate_exemption | default: "$5,000,000" }} aren't taxed at the state level.

A: One big difference is that Rhode Island has a state income tax. Trusts with Rhode Island income or resident status may need to file RI-1041 and pay tax on Rhode Island–source income. Nonresident trusts file if they have Rhode Island–source income. Nevada does not impose a state income tax. Nevada-situs trusts therefore avoid a state-level income tax, though other states can still tax based on connections to them.

A: Rhode Island once used a patchwork of "estate and transfer" levies. Over time, lawmakers repealed many transfer-style provisions and modernized the code under Chapter 44-22. This left a stand-alone estate tax framework in place. You can see this evolution in the statute index, where multiple former sections are marked "repealed."

A: Before the early 2000s, most states used a "pick-up" system. States took a share of the federal estate tax via a credit, so paying state tax didn't increase the overall bill. Congress phased out that federal credit in the 2001 EGTRRA law, which pushed states to create stand-alone systems. Rhode Island is one of the states that did so, and today it imposes its own separate Rhode Island estate tax with its own threshold and rules (although no inheritance tax).

A: These probate shortcuts work in both states when assets are properly funded into the trust. In Pennsylvania, a funded revocable trust avoids the court process for those assets. Many small estates also have a simplified probate route for personal property under $50,000. Nevada likewise allows funded trusts to bypass probate for titled property.

A: Pennsylvania has taxed inheritances since the 1800s, and it kept that system even as many states focused on estate taxes. For a time, the Commonwealth also used a "pick-up" estate tax tied to a federal credit. When Congress phased out that credit in 2005, Pennsylvania effectively let the state-level estate tax fade. The inheritance tax remained in place and still does today.

A: No. For decades, many states—including Pennsylvania—tied their estate taxes to a federal credit known informally as the "pick-up" credit. Under this setup, states could collect up to the amount the federal system credited for state taxes, so the total bill to families didn't increase; it just shifted who received it. In 2002, Pennsylvania briefly "decoupled," freezing its rules to pre-2001 federal law to preserve revenue. A year later, the state "recoupled," again matching the federal credit and allowing the estate tax to phase out as that credit disappeared in 2005.