Moving after retirement has become increasingly popular over the years but it may have unintended consequences for estate planning. Sixteen states have estate taxes that vary in exceptions allowed and rates imposed after death. A state such as New Jersey has an exception threshold under $700,000 and maximum tax rates of %14 which could dramatically alter the value of an expected bequest if a retiree had moved from a tax free state. Whenever your client talks about relocation make sure they understand the potential consequences moving may have and advise them how to minimize the potential impact.
See Kyle Krull, Retirement Relocation? Watch Out for Death Taxes!, Wealth Management, May 8, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
