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With the gift and estate tax exemption amount at $12.92 million for 2023, only a small percentage of families are subject to federal estate tax. While that\u2019s certainly a relief, state estate tax also must be considered in estate planning.<\/p>\n
Although many states tie their exemption amounts to the federal exemption, several states have exemptions that are significantly lower \u2014 in some cases $1 million or less. You may be considering retiring to a state with no (or a lower) state estate tax. However, doing so may not net the result you\u2019re after.<\/p>\n
Severing ties with your former state<\/strong><\/p>\n Moving to a tax-friendly state doesn\u2019t necessarily mean you\u2019ve escaped taxation by the state you left. Unless you\u2019ve sufficiently cut ties with your former state, there\u2019s a risk that the state will claim you\u2019re still a resident and subject to its estate tax.<\/p>\n Even if you\u2019ve successfully established residency in a new state, you may be subject to estate tax on real estate or tangible personal property located in the old state (depending on that state\u2019s tax laws). And don\u2019t assume that your estate won\u2019t be taxed on this property merely because its value is less than the exemption amount. In some states, estate tax is triggered when the value of your worldwide <\/em>assets exceeds the exemption amount.<\/p>\n Taking steps to establish residency<\/strong><\/p>\n If you\u2019re relocating to a state with low or no estate tax, consult your estate planning advisor about the steps you can take to terminate residency in your old state and establish residency in the new one. Examples include acquiring a home in the new state, obtaining a driver\u2019s license and registering to vote there, receiving important documents at your new address, opening bank accounts in the new state and closing the old ones, and moving cherished personal possessions to the new state.<\/p>\n If you own real estate in the old state, consider transferring it to a limited liability company or other entity. In some states, interests in these entities may be treated as nontaxable intangible property.<\/p>\n The bottom line<\/strong><\/p>\n Before putting up the \u201cFor Sale\u201d sign and moving to lower-tax pastures, consult with us. We can help you address your current and future states\u2019 estate tax in your estate plan.<\/p>\n \u00a9 2023<\/em><\/p>\n <\/body> With the gift and estate tax exemption amount at $12.92 million for 2023, only a small percentage of families are subject to federal estate tax. While that\u2019s certainly a relief, state estate tax also must be considered in estate planning. Although many states tie their exemption amounts to the federal exemption, several states have exemptions […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,9,10],"tags":[8,11,12],"class_list":["post-16779","post","type-post","status-publish","format-standard","hentry","category-articles","category-estates","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16779"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16779\/revisions"}],"predecessor-version":[{"id":16780,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16779\/revisions\/16780"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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