The estate-tax trap that lurks below the federal exemption

For clients with ties to multiple states, estate tax exposure may be hiding in plain sight.

In a Financial Planning article, Day Pitney Trusts and Estates Partner Michael Wargon examines how lower state estate tax thresholds, varying state filing requirements, and complex domicile rules can create unexpected planning challenges for clients who own property or divide their time across multiple states. He highlights considerations including charitable giving, state-specific filing obligations, and the scrutiny clients may face when establishing domicile in a new state.

Illustrating the subjective nature of the domicile test, Wargon said, “If somebody were to wake you up in the middle of the night and ask you, ‘Are you a New Yorker or a Floridian?’ What are you going to answer?”

Read the full article here.