Thinking about moving to a lower-tax state or splitting time between homes?
Relocating can open new opportunities, but it can also trigger unexpected audits, taxes, and legal hassles. Here are five common traps to avoid (and how we can help you plan ahead).
1. Your Old State May Not Let Go Easily
High-tax states often audit residents who move, looking for signs you haven’t really left, like where you spend holidays or which address is on your license.
Action Step: Within 30 days of moving, update your driver’s license, voter registration, vehicle registration, and key accounts to reflect your new state.
2. Hidden Probate Costs Across States
Owning property in multiple states can trigger separate probate proceedings, each requiring time, fees, and court approval before your family can access or sell the property.
Action Step: Let’s discuss titling out-of-state properties in a Revocable Living Trust to help your heirs avoid delays and unnecessary legal costs.
3. State Estate Taxes Still Apply
Even if you’re below the federal estate tax threshold, several states impose their own estate or inheritance taxes. A move could unexpectedly create new exposure.
Action Step: Before finalizing your relocation, let’s review your situation and coordinate planning strategies that reflect your family’s goals, such as lifetime trusts or charitable planning tools.
4. Property Tax Breaks Don’t Always Travel
Many states offer valuable property tax exemptions for primary residences that disappear when you move or make a home secondary.
Example: Florida’s Homestead Exemption only applies to your primary residence; once that changes, property taxes may rise substantially.
Action Step: We’ll review how your new state handles property tax exemptions so you can apply for any available benefits.
5. Your Business and Trusts May Need to Move, Too
If you own an LLC, S-Corp, or trust, you may need to register or update them in your new state to maintain protection and avoid unintended taxation.
Action Step: We’ll coordinate with your CPA and attorney to ensure every entity and trust is properly structured for your new home.
Here to Help
A move across state lines can have major financial implications. We’ll help you plan proactively so you can enjoy the change without surprises.
The First Step is a Conversation
If you’re planning a move or recently relocated, let’s connect to review your situation. Simply reply to this email to get started.