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  • Travis Bowen

Heckerling Institute on Estate Planning

This past January 9-13, I attended the annual Heckerling Institute of Estate Planning. It is the preeminent Estate Planning conference in the country. Attorneys and experts from around the country gather to discuss the most relevant and cutting-edge planning topics and techniques, which also include Tax and Charitable Planning. One particular seminar was called “It’s a Nice Place to Visit, but Do you Want to Live there?” It was especially relevant because I am frequently asked about the advisability of changing residence and/or domicile; for a number of you, we have worked to reestablish your residence and domicile to a tax-advantaged territory or state, such as Puerto Rico, Texas, Nevada or Florida.

While there can be tremendous and long-term tax savings in moving to a lower-tax territory or state (particularly if you are leaving CA, NY, or NJ), there are also a number of considerations that should be discussed and thought through completely before a decision is made. While some of these states may not have a state income tax, it is commonplace for those states to exact and levy excise, property, and other taxes that (depending on your asset holdings) can equal and sometimes surpass the tax burden of some current state income tax regimes. Additionally, those high-tax states do not want to see you go and most of the time do not believe you have actually left; their process to verify your move is called a “residency audit” which can be as invasive and expensive as any IRS audit. Finally, a particular states’ laws related to trusts, fiduciaries, prudent investors, and other important considerations should all be taken into account before a decision is made.

If you are contemplating (seriously or only around April 15th each year) moving to a more

favorable tax jurisdiction, please call us so we can discuss the important considerations that

should be part of that decision.

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