Owning property in Nevada and another state may offer people the flexibility to live their chosen lifestyle. However, it may cause estate planning issues that need to be addressed. For instance, it may be necessary to pay estate taxes on the state level even when exempt from federal estate taxes. Therefore, it may be beneficial to claim residency in the state with the lower estate tax burden.
Currently, the state of Massachusetts levies estate taxes on those with more than $1 million in assets while neighboring New Hampshire has no estate tax. Another issue to consider is that it may be necessary for those who own property such as real estate in two states to go through probate in both states. However, there are ways to make transferring property to beneficiaries easier no matter how many states an individual owns real estate or other assets in.
One idea may be to put assets into a trust because the probate process can be avoided and the assets owned by the trust can be distributed more quickly to the beneficiaries. Another could be to have powers of attorney in place for each state where real estate or bank accounts are located. This would allow trusted individuals in those states to make financial decisions in the event that the principal became incapacitated.
While people think that estate planning ends with the preparation of a valid will, the use of trusts can be an integral part as well. Trusts may be of interest to people who are concerned that a beneficiary may squander a lump sum inheritance left under a will. In contrast, the trust can specify that distributions are made by the trustee in increments or upon the attainment by the beneficiary of certain milestones. An estate planning attorney can describe other ways in which the use of a trust can be advisable.