Re-evaluating Relocation Strategies in a Changing Legislative Landscape

There are many factors that go into relocation strategies for ultra-high-net-worth (UHNW) families in today’s dynamic macroeconomic environment. Whether these decisions are being driven by quality of life, family proximity or other factors, wealthy families are increasingly reevaluating where they live, invest and establish long-term estate plans. Evolving state and federal legislations make these decisions as complex as ever, especially for high-income earners and families with significant wealth – often $100 million and above. In our experience, these considerations may become most urgent when a liquidity event, concentrated equity position or multi-state footprint is part of the picture. Here are the six most important tips wealthy families should consider when deciding if and what relocation strategy may be right for them. 1. Establish a proactive approach to long-term trust planning The planning landscape for many wealthy families is increasingly being defined by a pursuit of what we call "intentional design” – a strategic movement toward jurisdictions that offer not just lower taxes, but long-term stability and generational security. The key to this intentional approach is to proactively ask the right questions and think about how changing state legislation could impact your long-term plan. By combining residency planning with sophisticated trust strategies, families can significantly reduce their lifetime and estate-tax exposure while enhancing privacy, asset protection and multigenerational wealth preservation. 2. Be aware of the latest legislative changes and evolving landscape The legislative landscape fundamentally changed last year with the elimination of the scheduled federal "sunset" provision. As of January 1, 2026, the federal lifetime gift and estate tax exemptions have been permanently increased and indexed to $15 million per individual ($30 million for married couples). For wealthy families, the primary focus is now on state-level legislation and some recent changes. For example, Washington has historically had no income tax, but the state established a 9.9% state income tax on income exceeding $1 million in March 2026. Oregon moved to raise its estate tax exemption to $2.5 million earlier this year, although the state’s current $1 million exemption remains the nation’s lowest threshold. As state capital gains tax laws shift in these traditional West Coast hubs, affluent households should be aware of how these changes could impact their long-term stability and asset-protection options. 3. Consider how relocation would impact your assets State income and wealth tax laws have been a key driver of domestic migration patterns in recent years. Recently released IRS data shows that California saw a nearly $12 billion decrease in annual adjusted gross income from out-of-state moves in 2023, with Florida and Texas seeing the biggest gains in net income. We are increasingly seeing state-level legislation shaping the decisions of business leaders who are considering shifting their income stream into lower tax states. For example, we work with a client who is relocating his business in anticipation of a future sale. Were he to keep the business in its current location, he would be taxed not only on his annual income in excess of $1 million until the sale of the business, but also on the capital gains of the transaction as well as his increased net worth. In the Mountain West and Southwest, we are seeing an acceleration of relocation patterns to states like Arizona, Nevada, and Idaho, which continue to attract wealthy families who are pursuing more advanced estate-planning structures. Nevada has no state income or estate tax and offers the strongest trust and asset-protection laws in the nation. For example, if you want to remain in a high-tax jurisdiction to live close to your grandkids, you can use the Nevada Asset Protection Trust (NAPT) to remove your assets out of the state without changing your residency. While Arizona and Idaho each have an income tax, they have low flat rates of 2.5% and 5.3%, respectively. These states also have no estate tax and offer a critical advantage in their status as community-property states. For married couples, this typically provides a full step-up in basis on all community assets upon a spouse’s death, providing significant capital gains savings should they be sold off. This can potentially save heirs millions in future capital gains taxes—a benefit not available in common-law states. 4. Review residency status requirements closely Residency status plays a critical role for individuals who own multiple homes, as each state has different requirements to be considered a resident of that state. It is important to be cognizant of what those requirements are to avoid having a state audit your return in attempt to claw back taxes. We often work with clients to strengthen their residency documentation to avoid dual tax claims and reduce exposure to high income tax rates by moving prior to a liquidity event. 5. Consider alternatives if you don’t want to physically relocate For wealthy individuals who prefer to remain in their state, we see the strategy evolving toward structural isolation. Following California’s SB 131, which disallowed Non-Grantor Incomplete Gift Trusts (NING), the focus has shifted to "Completed Gift" structures. By utilizing the $15 million federal exemption, individuals can move assets into a trust that is a separate taxpayer in a state like Nevada, removing that income from their home state return. Wealth preservation can no longer be a reactive exercise – it must be a proactive, coordinated endeavor. Equally important is the guidance required to bring these strategies together effectively through the collaboration of trust professionals, estate planning attorneys and tax professionals. It is critical for wealthy individuals and families to have access to experts who can help them evaluate complex tradeoffs, align legal and tax strategies with family objectives, and adapt plans as laws, markets, and family dynamics evolve. That is why the Columbia Trust team emphasizes education, collaboration with outside professionals and tailored solutions designed to protect wealth, reinforce legacy goals, and provide clarity across generations. Disclaimer: The goal of this article is educational: to help individuals and families spot decision points and prepare for more detailed conversations with their estate planning attorney and tax advisor. Columbia Trust Company does not provide tax or legal advice.