BOSTON (CBS) – Six months south and six months north could be a great lifestyle in retirement but one place will need to be your legal domicile, your legal residence. And it’s the laws of that state which will dictate your estate planning. You will need to decide which state would be advantageous to die in.
The Federal exemption, the amount you can give away without incurring federal estate taxes, is $5+ million thru 2012. So most individuals dying between now and December need only worry about Massachusetts estate taxes.READ MORE: I-Team: High School Failure Rates In Massachusetts Jumped During Pandemic
Check the estate tax laws of the state you are considering moving to. Many states are now implementing an estate tax upon the death of their wealthy residents.
Massachusetts changed their estate laws several years ago, and for Massachusetts, the exemption is $1 million. So if your estate is larger than $1 million you could owe Massachusetts estate taxes. Florida, always wanting to lure more residents from the north, does not have an estate tax per say. They do however, have other taxes.
You may own property and pay real estate taxes in both states, have bank accounts in both states, register cars in both states, buy insurance in both states but you really only live in one state and you are visiting the other state.READ MORE: 'Had A Heart Of Gold': Construction Worker Killed In Newton Identified As Russell Harron
Owning property in different states may require your heirs to go through the probate process upon your death in more than one state. Setting up a trust and having the trust own the real estate may make the transfer of property easier upon your death.
Snowbirds should also consider executing a Durable Power of Attorney for each state so if they do need legal or financial decisions made by another the documents are in place to help. This is especially important if you have property or bank accounts in both states.
Last, be sure you have an Advance Medical Directive for both states. These are simple documents to execute. In Massachusetts, it’s your Health Care Proxy and if Florida is where you spend your winters you want to execute a Living Will and within that document, you appoint someone to make medical decisions for you.MORE NEWS: 'I Don't Want To Be A Vigilante': Mikayla Miller's Mother Demands Justice At Hopkinton Rally
Terri Schiavo of Florida was an example of the best intentions gone astray. Her husband and her parents fought in court about her care. The governor got involved. I don’t care which side of the argument you were on regarding her feeding tube, just be sure you do your planning so your family is not fighting your battles in a courtroom and the media.