Question on Trust and Estate taxes on investment properties

[Aradhana Verma]

Hi, We are a married couple and own a primary residence in Bay Area, CA and another investment property in Redmond, WA. We recently setup a trust in California. My attorney mentioned that the state of Washington has very high estate tax. Should something happen to one of the trustee, the other trustee will be subject to huge estate tax if he/she wanted to sell our investment property in Redmond. We are planning to invest in more real estate properties most likely in Phoenix and/or Dallas. Does anyone has guidance on estate taxes and or point me to the right attorney? How do we account for estate taxes in our real-estate strategy?

[Colleen F.]

@Aradhana Verma what I found is that states have an estate tax that applies based on property owned in that state (including some that have no estate tax). While you can do research on what states have estate tax and how they compute it you have to rely on an attorney in the state in which the property is LOCATED to advise you. We are looking at setting up an AZ trust but I have to consulta RI attorney to sort out how we should handle our property in RI to minimize estate tax. (Assuming there is something left) since they tax based on the % of the estate in RI. Not sure how Washington does it. It also for us an multi member LLC can have an impact on taxes. I see a WA lawyer in your future.