The federal government giveth-and state governments taketh away. That’s increasingly the case with estate and gift taxes.
The Federal government may be bigger, but when it comes to estate planning you simply cannot forget state laws. If you are building your estate plan, ignore your state estate taxes (present or future) to your peril.
MarketWatch recently provided some advice in an article titled “Protecting your estate in a high-tax state.”
Ironically, the estate tax scare at the federal level is less of a concern at present. The IRS has issued the estate and gift tax exemptions for 2014 and the new unified exemption/credit will be pegged at a cool $5.34 million. Unfortunately, the states did not get the same memo.
The states are still different and vary considerably. Certain states have their own forms of gift tax, estate tax, inheritance tax, and so on. There are even more subtle taxes such as those on real property.
Even if you live in one state, you might just be affected by the laws of another state if you own the wrong kind of property or conduct business there. Where you choose to retire could also upset your estate tax planning apple cart. In addition, you may be inheriting from family members who are residents in a tax-happy jurisdiction.
Consequently, it is important to follow the Boy Scout motto and always “Be Prepared.’
Do You Need To Speak With An Attorney About Estate Planning?
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