On September 21, Larry Mandelker was quoted in Financial Planning on the estate tax considerations that can arise when individuals own property or spend time in multiple states.
According to the article, while the federal estate tax exemption is $15 million per person, some states impose estate taxes at significantly lower thresholds. For individuals with connections to multiple states, a domicile can therefore play an important role in determining potential state estate tax exposure.
Commenting on the importance of domicile planning, Mandelker said, “Very often, state estate taxes are based on a question of domicile, which is a subjective test, and it's basically the state trying to figure out where you intend to be. If you're trying to change your domicile, you need to be very careful.”
Mandelker also noted that clients and advisors should remain attentive to life changes, such as purchasing a vacation home or relocating.
Mandelker emphasized that simply spending more time in another state may not, by itself, establish a change in domicile. He explained that larger lifestyle changes—such as updating voter registration or joining local religious or social organizations—can help demonstrate that a move is intended to be permanent.
Read the full article here.