For many retirees, relocation across state lines is part of the plan. In 2025, somewhere between 14 and 29 percent of those who made retirement moves relocated to a different state. Additionally, many affluent persons approaching or in retirement own vacation homes, investment property, and other assets in multiple states.
For both of these reasons, it’s important to review estate planning when relocating to ensure that the estate will be handled as intended across state lines. Because estate and inheritance laws are established by the states, and because each state treats these matters differently, interstate estate planning requires careful coordination with estate planning professionals who are familiar with the laws in all states where property and assets are held or residence is established.
Inheritance and Estate Taxes: Differences Among the States
Currently, 17 states and the District of Columbia impose estate tax (paid by the estate before transmittal to heirs), inheritance tax (paid by heirs after receiving the estate), or both:
- Connecticut
- Hawaii
- Illinois
- Kentucky
- Maine
- Maryland
- Massachusetts
- Minnesota
- Nebraska
- New York
- New Jersey
- Oregon
- Pennsylvania
- Rhode Island
- Vermont
- Washington
- Washington, D.C.
Also, while federal estate taxes are limited to estates exceeding the exemption threshold of $15 million (in 2026; $30 million for married couples filing jointly), the listed states have various levels at which taxes are imposed, many of which are lower than the federal threshold (Oregon and Massachusetts, for example, collect taxes on estates valued at $1 million or more). The marginal rates imposed by the states, while less than the maximum 40% federal rate, can still range from 12–20%. If your worldwide estate value is less than the exemption threshold of a state where property is held, you will owe no estate taxes in that state.
Owning Property in Multiple States
Each state taxes your estate differently. And, because property ownership laws and tax rates vary significantly, owning real estate or other assets in multiple states can expose you to varying estate taxes, inheritance taxes, and probate requirements.
In most cases, the state where you permanently reside (your state of domicile) at the time of death has the primary right to tax your worldwide estate. This includes both your personal property and any out-of-state real estate and tangible personal property. Next, the state where your out-of-state property is located can also levy estate or inheritance taxes on the real estate and tangible personal property physically situated within its borders. This means your out-of-state property could be subject to taxation in two different states. Finally, in addition to taxes, owning property in multiple states can force your family to go through “ancillary probate”: a separate legal process in the state where the property is located, which can add extra fees and delays.
Other Cross-Border Estate Planning Considerations
In addition to the estate’s property and assets, there are several personal considerations that should receive careful attention if you plan to relocate to a different state as your domicile.
- Advance Healthcare Directives: These are highly specific to state statutes. Local doctors or financial institutions may reject out-of-state healthcare proxies or living wills if they don’t use your new state’s exact forms.
- Powers of Attorney: Financial and medical powers of attorney are often subject to strict state-level requirements and should be updated to comply with local regulations.
- Community vs. Common Law States: If you move between a community property state and a common law state, the classification of your marital assets changes. Updating your will and other estate planning documents can ensure that the treatment of your assets is clear under local laws.
Assets held in various trusts may also be subject to different requirements, depending on the state where the trust was created and where the assets are located. While trusts generally remain legally valid when you move states, laws regarding taxes, spousal rights, and asset titling vary by state. So, moving requires critical updates to ensure the trust functions as intended and covers out-of-state property. For example, if you have a revocable living trust, you must formally re-title your new home and any other newly acquired real estate into the name of the trust, otherwise it risks going through probate. Also, while moving a revocable trust usually does not change your federal tax standing, some states tax the accumulated income or capital gains of a trust differently.
Local Knowledge Is Power for Interstate Estate Planning
In most situations, an estate plan created in one state remains legally valid after you move to another. Core documents such as trusts and wills are generally recognized across state lines when properly executed under the laws of the original state. Moving does not automatically undo the planning you have already done.
However, while the foundation of your estate plan usually remains intact, a move can affect details of how certain documents are applied or relied upon in practice. Reviewing your plan after a move allows estate planning professionals with a thorough knowledge of state laws to share helpful estate planning tips tailored to local requirements and confirm that documents will be readily accepted.
At JFS Wealth Advisors, we work with clients to consider the unique characteristics of their estates so that their estate planning captures their intentions. If you have questions, your JFS advisor can help you find the answers you need.
Disclosure: This content is provided for informational and educational purposes only and should not be construed as tax or legal advice. JFS Wealth Advisors is not a CPA firm or Law firm. You should consult with a qualified tax professional regarding your individual situation before making any tax-related decisions.
