Estate Planning Considerations for Out-of-state Property

If you own property in another state, it’s important to include it in your estate plan. Make sure your legal documents show that you intend to live in Florida, to avoid extra taxes and legal issues. Use strategies like trusts and joint ownership to avoid extra probate processes for your out-of-state property. If you have a vacation home or other property in a different state, talk to a local attorney to make sure your estate plan covers everything. Some states have their own estate tax, separate from the federal tax. This means that even if your estate doesn’t have to pay federal estate tax, you might still have to pay state estate tax. The rules for state estate tax are different in each state, and they can change often. If you own property in another state, you might be subject to that state’s estate tax. It’s best to get advice from a lawyer in that state to figure out what you need to do to avoid paying too much in taxes. State estate and inheritance taxes are taxes that are assessed on the property and assets that you leave behind when you die. These taxes can vary from state to state, and can be quite complicated to calculate. For example, an estate of a Florida person who owned property in Maine had to pay over $32,000 in Maine estate taxes, even though no federal estate tax was due. Another person in Florida who owned property in Pennsylvania had to pay $5,667 in inheritance tax.

It can be difficult and expensive to figure out how much tax you might owe, and it can also be a hassle for your estate to prepare the tax return. Because of this, some people choose to plan ahead to try to avoid these taxes altogether. If you want to avoid estate taxes on your property, it can be a bit complicated and may cost some money. It depends on where you live and the situation with your property. If you have a small property in another state, you might be able to avoid the tax by giving it to your kids. But if you want to keep using the property, it can get more complex. It’s important to think about the costs and how hard it might be before you make a decision. If you want to avoid estate and inheritance tax, there are a few options you can consider. One option is to give the property to someone else as a gift during your lifetime, but there are some tax implications to consider. Another option is to sell the property, either to a family member or to a trust. You could also put the property into a corporation or LLC to avoid state estate tax, but different states have different rules about this. Each option has its pros and cons, so it’s important to consider carefully before making a decision. If you inherit property from someone in another state, the amount of tax you have to pay on it depends on your relationship to the person who left it to you. If you’re married, you can set up your will or trust in a way that avoids paying state estate taxes. There are different ways to handle property taxes, and it’s important to plan ahead so you don’t end up owing more than necessary. And if you move to Florida, you might save money on income taxes. If someone dies and owns property in more than one state, there may be taxes to pay in each state where the property is located. Florida doesn’t charge a state estate tax, so they don’t get involved in tax claims from other states. It’s important to plan where you live and own property to avoid extra taxes. Holding property in a trust or entity can also help with taxes and protect the property from creditors. Different states have different rules for estate taxes, so it’s important to understand the laws in each state where you own property.

Source: https://www.floridabar.org/the-florida-bar-journal/estate-planning-considerations-for-out-of-state-property/