Earlier this year, JNBA Financial Advisors had the pleasure of hosting Chad Carr, an estate attorney and partner from Twin Cities-based firm Stadig Johnson to share his expertise with our Advisory Team regarding Advanced Estate Planning Strategies for those subject to Minnesota Estate Tax. While Estate Tax can be fairly straightforward, there are some nuances for those who own property in Minnesota as well as property in Florida and Arizona.
What is Minnesota Estate Tax?
One of the key items discussed was the Minnesota Estate Tax. As many know, Minnesota has an estate tax for individuals with estates over $3 million dollars. This means that assets above the $3 million dollar threshold may be subject to taxes at a rate of 13 to 16%.
Why does it matter for those in Florida or Arizona?
Many times, people will choose to change their residency to a lower tax state to avoid Minnesota taxes. This strategy can be quite advantageous as you can avoid paying Minnesota state income tax on various sources of income including Social Security and Required Minimum Distributions (RMDs).
“However, changing residency may not exempt you from Minnesota Estate Tax entirely,” Carr noted. “Minnesota Estate Tax can be applicable to Minnesota residents and non-residents who own tangible property (i.e. real estate or personal property) in Minnesota. If an individual has an estate that would be taxed in Minnesota, they may be subject to Minnesota Estate Tax on assets located in Minnesota, despite being a non-resident.”
What to do if you believe you are impacted?
If you are worried about your potential estate tax bill, reach out to your JNBA Advisory Team. Regardless of where you own property, your JNBA Advisory Team can work alongside your estate attorney to determine your estate tax exposure and discuss options for reducing your estate tax liability going forward.
JNBA is not an accountant and no portion of the above should be construed as accounting advice. All accounting issues should be addressed with an accounting professional of your choosing. JNBA is not an attorney and no portion of the above should be construed as legal advice. All legal issues should be addressed with the legal professional of your choosing.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
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