Nobody puts this on their retirement checklist.
✓ Visit Italy.
✓ Spend more time with the grandchildren.
✓ Finally learn to play golf.
✓ Move somewhere nice.
✓ Figure out the most tax-efficient state in which to die.
That last one probably sounds ridiculous.
But if you have accumulated significant wealth, where you are legally considered to live when you die can potentially make an enormous difference to the amount your family ultimately receives.
Welcome to one of the stranger corners of estate planning:
Death has a ZIP code.
And some ZIP codes can be considerably more expensive than others.
The United States does not have one uniform system of death taxes. There is a federal estate-tax system, but states can also impose their own estate or inheritance taxes.
Some do.
Others don’t.
That means two people with essentially identical assets and identical families can die on opposite sides of a state line and potentially produce very different tax results.
So let’s take a slightly morbid—but financially fascinating—tour of America and ask:
Where is the best place to die?
First: There Is More Than One Kind of “Death Tax”
Before packing the moving truck for Florida, we need to understand the terminology.
People tend to call everything a “death tax,” but there are actually different taxes that can arise when someone dies.
Federal Estate Tax
The federal government imposes an estate tax on sufficiently large estates.
For 2026, the federal estate-tax filing threshold is $15 million per individual.
That means federal estate tax isn’t something most families will ever pay.
If you have a $900,000 home, $1 million investment account and $2 million IRA, you might feel wealthy—and you are—but federal estate tax probably isn’t your biggest estate-tax concern.
State taxes can be a different story.
State Estate Tax
Some states impose their own estate tax.
An estate tax is generally imposed on the estate before assets reach beneficiaries.
Think:
“You died owning this much, so your estate owes us money.”
State Inheritance Tax
An inheritance tax works differently.
Instead of focusing primarily on the total estate, an inheritance tax can depend upon who receives the property.
Think:
“You inherited this property, so the transfer may be taxed.”
That distinction is particularly important for people living in Pennsylvania.
Pennsylvania: Wonderful Place to Live. Potentially Expensive Place to Die.
Let’s say you live in Pennsylvania.
You have a house worth $700,000, retirement and investment accounts, and other property. You have been careful with your money for decades and want to leave everything to your children.
Your estate isn’t anywhere close to $15 million.
“No problem,” you think.
“I’m nowhere near the federal estate tax.”
True.
But Pennsylvania has another surprise waiting.
Pennsylvania imposes an inheritance tax.
Current Pennsylvania rates include:
0% on qualifying transfers to a surviving spouse;
4.5% on transfers to direct descendants and lineal heirs;
12% on transfers to siblings; and
15% on transfers to many other heirs.
So imagine leaving $2 million of taxable property to your children.
At a 4.5% rate, we’re talking about roughly:
$90,000.
Not because you’re a billionaire.
Not because your estate exceeded the federal estate-tax exemption.
Simply because Pennsylvania has its own inheritance-tax system.
And if you’re leaving taxable property to someone subject to Pennsylvania’s 15% rate?
Now the numbers can become much more dramatic.
That’s why estate planning cannot stop with:
“Will I owe federal estate tax?”
For many families, the more useful question is:
“What happens under my state’s rules?”
Drive Across the Bridge to New Jersey and Things Change
Now let’s make our hypothetical person a New Jersey resident.
New Jersey used to have its own estate tax, but no New Jersey estate tax is imposed for deaths after January 1, 2018.
Does that mean New Jersey has completely left the death-tax business?
Not quite.
New Jersey still has an inheritance tax.
But New Jersey’s inheritance tax depends heavily upon the relationship between the person who died and the person receiving the inheritance.
This creates an interesting planning situation.
A state can be relatively friendly if you’re leaving property to one type of beneficiary but considerably less friendly if you’re leaving it to someone else.
That’s an important lesson:
“Is this state good for estate taxes?” is sometimes the wrong question.
The better question may be:
“Is this state good for MY estate, considering who my beneficiaries are?”
Maryland: Why Choose One Tax When You Can Have Two?
Then we have Maryland.
Maryland deserves special recognition in our tour because it has both an estate tax system and an inheritance tax system.
Yes.
Both.
If you’re keeping score at home, Maryland apparently decided one category of death tax wasn’t enough.
That doesn’t mean every Maryland estate pays both taxes or that every beneficiary is taxable. Exemptions and exceptions matter enormously.
But it illustrates just how dramatically the rules can change simply by crossing a state line.
Pennsylvania has an inheritance tax.
New Jersey retains an inheritance tax but no longer imposes its former estate tax for recent deaths.
Maryland has both estate and inheritance tax systems.
And then there are states with neither.
Which brings us to everyone’s favorite estate-planning destination.
Florida: Sunshine, Beaches and No State Estate Tax
Florida has become extraordinarily popular with retirees for many reasons.
Warm weather.
Beaches.
No snow shovel.
And taxes.
Florida does not impose an individual state income tax, and it does not currently impose a separate Florida estate or inheritance tax of the type we’re discussing here.
For a wealthy person relocating from a state with substantial estate taxes, the difference can potentially be significant.
This is why you sometimes hear about wealthy residents of northeastern states moving to Florida.
But here is where people make a dangerous assumption.
They think:
“I bought a condo in Florida. Therefore, I’m a Florida resident.”
Not necessarily.
Buying a house somewhere doesn’t automatically mean your old state has lost the right to call you one of its residents.
Your Estate Plan Has a New Vocabulary Word: Domicile
If you’re considering moving for tax purposes, remember this word:
DOMICILE.
Domicile isn’t simply where you happen to be sleeping tonight.
Broadly speaking, it refers to the place considered your permanent legal home—the place you intend to return to and remain connected to.
You can own multiple homes.
You might have:
- a Pennsylvania house;
- a Florida condo;
- a New Jersey beach house; and
- an apartment in New York.
But for many legal and tax purposes, you generally have one domicile at a time.
And after you die, there may be a lot of money riding on the answer to:
“Where was this person really domiciled?”
“But I Spent 183 Days in Florida!”
Ah, yes.
The famous 183-day rule.
People love this rule.
They imagine an IRS-style referee standing at the Florida border with a stopwatch.
Day 181.
Day 182.
Day 183!
“Congratulations! You are officially Floridian!”
Reality is much more complicated.
Day counting can matter greatly for certain state tax residency tests, but domicile is not necessarily determined by simply counting to 183.
Tax authorities and courts can examine the broader picture.
Where is your primary home?
Where do you vote?
Where is your driver’s license?
Where are your cars registered?
What address appears on legal documents?
Where do you receive important mail?
Where are your doctors?
Where do you spend holidays?
Where are your valuable personal possessions?
Where are your clubs, organizations, religious institutions and community connections?
Where does your spouse live?
Where do you actually spend your time?
What does your estate plan say?
And, perhaps most importantly:
What does your actual life say?
You can put “Florida resident” on twenty documents.
If virtually everything about your life still screams Pennsylvania, Connecticut or New York, someone may eventually ask questions.
A $13 Million Argument Over “Where Did He Live?”
This isn’t merely theoretical.
A recent Connecticut case involving the estate of wealthy businessman Jack Anderson demonstrates how much can ride on domicile.
His estate maintained that Florida was his domicile. Connecticut took a different view.
The amount reportedly at stake?
Approximately $13.2 million in Connecticut estate and gift taxes.
The dispute examined his connections to different states and ultimately generated years of litigation.
In 2026, the Connecticut Supreme Court ordered further proceedings after addressing the applicable domicile standard.
Whatever the ultimate outcome, the case teaches an extraordinary estate-planning lesson:
Changing your domicile isn’t just about what you say.
It’s about what you do.
When millions of dollars are at stake, expect someone to look closely.
So Should Everyone Move to Florida Before They Die?
No.
Please don’t tell your spouse:
“The estate-planning lawyer says we have to move to Boca immediately.”
There is much more to life—and estate planning—than death taxes.
Suppose moving saves your heirs $100,000 someday but causes you to spend the final 15 years of your life 1,000 miles from your children, grandchildren, friends and community.
Was that good planning?
Maybe not.
Taxes should serve your life.
Your life should not serve your taxes.
And states have many different kinds of taxes.
A state with no estate tax might have higher taxes somewhere else.
You have to consider:
- income taxes;
- property taxes;
- sales taxes;
- taxation of retirement income;
- estate taxes;
- inheritance taxes;
- real-estate costs;
- insurance costs;
- healthcare;
- and your actual quality of life.
Never let the tax tail wag the retirement dog.
Here’s Another Surprise: Moving Doesn’t Necessarily Make Every Tax Problem Disappear
Suppose you successfully change your domicile from Pennsylvania to Florida.
Great.
You own a beautiful Florida home.
Your driver’s license is Florida.
You vote in Florida.
You actually live there.
But you kept a valuable piece of Pennsylvania real estate.
Now what?
This is where estate planning becomes more complicated.
A person’s domicile can affect the taxation of intangible property, but real estate is strongly connected to the state where the property is physically located.
So moving your body does not necessarily move your real estate.
You can’t tell Pennsylvania:
“That apartment building is spiritually located in Florida now.”
The building remains in Pennsylvania.
That means someone considering a change of domicile needs to examine not only where the person lives, but also where the person’s assets are located and how they are owned.
The “Best State to Die In” May Depend on What You Own
Imagine three people.
Person #1: Retirement Millionaire
She has $3 million, primarily in retirement accounts.
Her biggest questions may involve income taxation of retirement distributions, beneficiary planning, required distributions, trusts and state inheritance taxes.
Person #2: Real Estate Investor
He has $10 million of rental properties located in four states.
His domicile matters, but so does the location and ownership structure of each property.
Person #3: Business Owner
She owns a company worth $30 million.
Now federal estate tax, state estate taxes, business succession, valuation, liquidity, trusts and domicile can all become critically important.
Same question:
“Where should I live?”
Three potentially different answers.
That’s why Google cannot create your estate plan.
Sometimes the Better Strategy Is Planning Instead of Moving
There is another option.
Instead of moving your entire life to another state solely to avoid a tax, sophisticated estate planning may be able to reduce the problem.
Depending upon your circumstances, planning might involve:
- lifetime gifting;
- irrevocable trusts;
- life-insurance trusts;
- spousal lifetime access trusts;
- GRATs;
- charitable planning;
- business succession strategies;
- generation-skipping planning;
- changing how certain property is owned;
- reviewing beneficiary designations;
- strategically choosing which assets to retain until death;
- or transferring appreciating assets earlier.
Not every strategy works for every tax.
And simply putting an asset into a trust does not automatically eliminate estate or inheritance tax.
But before selling your home and moving 1,000 miles away, it is worth asking:
“Can we solve some of this problem through planning?”
Don’t Forget the Federal Government
Even if you pick a state with no estate tax and no inheritance tax, the federal estate-tax system still exists.
For 2026, the federal estate-tax filing threshold is $15 million per individual.
For married couples, portability and sophisticated planning can potentially provide additional opportunities, but portability isn’t automatic in every respect and does not replace comprehensive planning.
For very wealthy families, moving from a high-estate-tax state to a state without an estate tax may solve one layer of taxation while leaving a substantial federal estate-tax problem untouched.
Moving to Florida doesn’t make the IRS forget you exist.
Nice try.
And Don’t Forget Capital Gains
There is another tax issue lurking in the background:
basis.
Certain inherited assets generally receive a basis adjustment at death under federal law.
That can make keeping a highly appreciated asset until death surprisingly tax-efficient in some circumstances.
Conversely, moving rapidly appreciating assets out of an estate earlier may reduce estate-tax exposure.
These goals can conflict.
As we explained in our discussion of how billionaires transfer wealth, good estate planning isn’t necessarily about creating the smallest possible taxable estate.
It is about producing the best overall tax result while accomplishing the family’s goals.
Sometimes you want an asset outside the estate.
Sometimes you want it inside.
Sometimes you want to change domicile.
Sometimes you want to stay exactly where you are and plan around the tax.
So…Where IS the Best Place to Die?
If your sole objective were avoiding state estate and inheritance taxes, you would naturally look favorably at states that impose neither.
But that still doesn’t tell you the “best” state.
Because the best place to die is probably the place where you actually want to live.
The estate-planning objective is to make sure you understand the tax consequences of that decision.
If you are deciding between Pennsylvania and Florida anyway, inheritance taxes might be an important factor.
If you have homes in several states and already spend significant time outside your original state, domicile planning may be extremely valuable.
If your estate is worth tens or hundreds of millions of dollars, state domicile can potentially become a multimillion-dollar planning decision.
But if your entire family lives five minutes away and Sunday dinner with your grandchildren is the best part of your week, saving taxes may not justify moving across the country.
There are some things even the best estate plan can’t put a price on.
The Million-Dollar Estate-Planning Question
So perhaps the title of this article is slightly wrong.
The question shouldn’t really be:
“Where is the best place to die?”
It should be:
“Where is the best place for me to live—and have I planned intelligently for what happens when I die there?”
That’s a much better question.
If you live in a state with an estate or inheritance tax, understand it.
If you own property in multiple states, understand how each state may treat that property.
If you’re genuinely relocating, establish your new domicile properly.
If you have a large estate, don’t wait until your health is failing to begin planning.
And if you’re considering moving primarily because of taxes, calculate the actual potential savings before calling the moving company.
Because one of the strangest truths in estate planning is also one of the most important:
Where you live can affect what your family inherits after you die.
You spent a lifetime deciding where to earn your money.
Where to invest it.
Where to buy property.
Where to raise your family.
And where to retire.
It makes sense to spend a little time considering what your ZIP code could mean when your wealth eventually passes to the next generation.
One Last Thought
The wealthy don’t merely ask:
“What happens to my assets when I die?”
They ask:
“What can I change while I’m alive?”
Your domicile.
Your ownership structure.
Your beneficiary designations.
Your trusts.
Your gifting strategy.
Your business succession plan.
Your insurance.
And the location and structure of your assets.
Death may be inevitable.
Paying unnecessary taxes isn’t.
Important Disclaimer: This article is for general educational and informational purposes only and is not legal, tax, financial, or investment advice. State estate, inheritance, income, residency and domicile laws vary considerably and can change. Moving to another state does not automatically terminate domicile in your former state, and owning property in another jurisdiction may create tax or probate consequences even after a domicile change. Before changing residency, transferring property, creating a trust, or implementing any tax strategy, consult experienced estate-planning and tax professionals familiar with the laws of all relevant states.
