Do You Own Property in Another State? Meet with Our Estate Planning Attorney

Many of our clients own property in more than one state. Maybe they moved to Florida but have not yet sold their home back in New Jersey or New York. Or maybe they inherited a piece of property from their parents. Other clients have multiple homes and spend part of the year outside of Florida.

If any of these situations describe you, then there are important estate planning considerations. We have seen some estate plans get disrupted because of the existence of a piece of property in another state, and we highlight some of the problems in this post.

Questions about Domicile

If you spend part of the year outside Florida, then questions can arise about where you were really domiciled at death—especially when you spend that time at a second home. For example, you might spend several months at your cottage in New Hampshire. In some situations, it might look like New Hampshire is your domicile if you spend more time there than you do in Florida.

Domicile issues create many headaches:

• The other state might not have as advantageous tax laws. This means your estate will be smaller.
• A probate proceeding could start up in the other state, meaning there are competing probate proceedings.

Domicile is based on intent. We can carefully document your intent to make Florida your domicile. This is an especially vital step if you have recently moved to Florida, where the risk of confusion is most acute. For example, a recent move to Florida could look like a vacation, especially if you have not yet sold your long-time home in another state.

Of course, issues around intent are difficult to solve with 100% certainty. Some state taxing authorities are very aggressive and might try to claim you are still domiciled in their state for tax purposes. However, our estate planning attorneys in The Villages can make things as clear as possible while you are living.

Higher Estate Taxes

Many clients wrongly assume that the only estate tax is the federal one. Actually, states can also pass an estate tax, and some have punitive tax schemes. Out-of-state property can be subject to the estate tax on your death. Even worse, many states regularly update their estate tax, which means that an airtight estate plan created two or three years ago might need to be revisited.

Proper planning is necessary to minimize the taxes on the entire estate for the benefit of your heirs. We have experience working with local counsel in different states to develop the best avoidance techniques so that your heirs are not taken to the cleaners upon death. Sometimes, the best course of action is a sale, which can simplify an estate. In other situations, placing the asset in a limited liability company can reap tax savings and avoid probate entanglement.

Contact Us for More Information

New transplants enrich The Villages community. But recent arrivals have unique estate planning needs which should be addressed promptly. For help dealing with some of the thornier issues, contact our estate planning attorneys in The Villages at Millhorn Elder Law Planning Group today at 800-743-9732. Our consultations are free.

Resource:

irs.gov/businesses/small-businesses-self-employed/estate-tax

https://www.millhorn.com/divorce-your-estate-plan-5-things-to-know/