Estate planning across multiple states

On Behalf of | Oct 24, 2016 | Firm News, trusts

North Carolina residents who are creating an estate plan and who have homes in more than one state need to decide which one is their legal residence and whether they want to continue using that state as their official residence. Generally, wherever they are registered to vote is the official state of residence. This may affect their estate planning process.

For example, one thing to check is what states have an estate tax. The federal estate tax exemption is $5.45 million for 2016, but many states that have separate estate taxes have exemptions that are far lower. Furthermore, even if a state does not have an estate tax, there may other taxes due when a person dies.

Owning property in multiple states can create complications because it can lead to heirs having to wait for probate processes to conclude in each state. One way to avoid this may be to place real estate in a trust. People may also want to consider having a durable power of attorney in place in each state where they have property or bank accounts so that someone can manage their finances if they are incapacitated.

In North Carolina, there is not a state estate tax, but people might want to meet with an attorney to discuss other costs including other taxes, probate fees and trusts. The attorney might be able to offer advice on how clients could best protect their assets and ensure that they pass reasonably quickly to beneficiaries. An attorney might also be useful to address other implications of having property and residence in multiple states that a person might not have thought of. For example, clients might want to consider appointing someone to make health care decisions in each state in the event that they are incapacitated.