While estate planning is never simple, it can become a nightmare when property is owned in more than one state. All states follow the federal tax code, which changed this year and will change again next year with regard to inheritance tax. However, each state also has the right to assess its own taxes on inheritance, and no two state have exactly the same laws.

To make matters more confusing, states are not bound by the federal inheritance tax limits, and some states have lower or higher limits than the IRS. States also differ in the types of taxes they assess on various properties. A condominium may have taxes assessed differently from a single-family dwelling; vacation property may be rated on a different scale than residential property.

If you own property in more than one state, it would pay to have a competent estate-planning attorney look at your assets and advise you as to the best way to shelter your property from taxes. Most attorneys are licensed in only one state; however, your estate-planning attorney may be licensed in more than one state, especially if you are in an area where state boundaries are close. If he or she is not licensed in more than one state, it is easy to incorporate the counsel of another attorney in the estate planning strategy for solid advice and feedback. Whatever you and your attorney decide, it is imperative to get sound advice about the tax laws in each state where you own property, in order to protect all your investments.

You should also keep in mind that if you have heirs who live outside of your state, your attorney should be aware of this so that he or she can look at the laws of that particular state. States can and do assess inheritance taxes on out-of-state heirs, and there may be tax consequences in the heir’s home state as well.

There are ways to shelter your property, such as trusts. An estate attorney can help you decide which options are best for you.

This article is not intended as legal advice. Only an estate planning attorney can give you information tailored to your individual situation.