Some Ohio residents decide to live part of the year in warmer states, returning to their home for the summer months. When they own property in two states, it is important that they take estate planning into consideration.
When people own homes in two different states, they might want to place their real estate in a trust. This can help them to pass their homes to their beneficiaries without having to go through probate in two jurisdictions. Assets held in trusts pass outside of the probate process. People might also want to consider which state will be a better one to establish as their official residence. While Ohio no longer has a separate estate tax, some states do, with lower exemptions than the federal one, which is in 2016 $5.45 million for individuals and $10.9 million for married couples.
Florida, which is often a destination for retirees during the winter months, does not have estate taxes. The state does have other taxes that it assesses upon people’s deaths, however. It is thus important to find out about the tax laws in both states and then to plan accordingly.
People with property such as homes or bank accounts in different states may also want to prepare separate powers of attorney for each jurisdiction. These documents would allow a trusted individual to make certain decisions with respect to those assets should the principal become incapacitated.
There are other benefits that trusts can provide in addition to avoiding what could be a lengthy and expensive probate process. For example, people may be concerned that a beneficiary would squander an inheritance left in a will. Estate planning attorneys can prepare trust documents that would provide for distributions to be made periodically or upon the achievement of certain milestones.