Lizziesmith84: The taxes are paid in the state that the parent resides in/files their state income in, if indeed they file an income tax return. Do they plan to return to the state that they're renting a memory care room in?
What I have been told is: you have to pay estate tax/follow estate rules in the state that you declare residency.
Do they file state income tax forms? If so, do they declare they are a resident on that form? If so, then that is the state that the estate tax is filed and paid.
Do they own property in multiple states? In that case, then estate forms would have to be filed in each state.
Do they have valid state ids or driver's license? Does it have a gold star? Then that could influence what state is residency.
However, the best answer is: consult an estate attorney.
P.S. If your parents have a decent amount of wealth, it would be wise to also contact a CPA to review tax laws.
They may owe taxes in either or both the state of residence and the state where any property is located.
For example, a person with a 200,000 home in OR will owe OR estate tax, if their total estate is more than 1,000,000, which is the OR limit, even if they live in another state and none of their other assets are in OR. Paying to have the return prepared will be expensive too.
If you are assisting with estate planning or expect to be the executor of a large estate, consult an estate tax attorney specializing in each state where real estate is owned and in the state where the person is expected to reside (e.g., where they sleep for more than half the days of the year). State law will explicitly define residency.
But re reading, if she is currently a resident in another state then she is a resident of that state, not where she WAS a resident. It is where SHE is. Not where, say, her home is. If she gets mail at her current residence and votes, etc, then that is where she is a resident.
Unless she is on Medicaid, it may not be too late to create a trust for her assets and avoid probate fees and taxes. Be sure to look for a qualified attorney who specializes in elder/estate law. Any attorney can help you but if they are not up on the latest changes in laws they may leave some loose ends that cost you later.
Unless she has an estate over 12 million dollars she won’t have a federal estate tax. Most states don’t have an estate tax either. So check with both states and also a tax advisor.
Do they file state income tax forms? If so, do they declare they are a resident on that form? If so, then that is the state that the estate tax is filed and paid.
Do they own property in multiple states? In that case, then estate forms would have to be filed in each state.
Do they have valid state ids or driver's license? Does it have a gold star? Then that could influence what state is residency.
However, the best answer is: consult an estate attorney.
P.S. If your parents have a decent amount of wealth, it would be wise to also contact a CPA to review tax laws.
For example, a person with a 200,000 home in OR will owe OR estate tax, if their total estate is more than 1,000,000, which is the OR limit, even if they live in another state and none of their other assets are in OR. Paying to have the return prepared will be expensive too.
If you are assisting with estate planning or expect to be the executor of a large estate, consult an estate tax attorney specializing in each state where real estate is owned and in the state where the person is expected to reside (e.g., where they sleep for more than half the days of the year). State law will explicitly define residency.
At the time of her death, her house had been sold. I don't know if that would have made a difference.
Where does she file taxes?
Also, most states that have estate taxes collect them only on estates with several million dollars:
https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/estate-and-inheritance-taxes
You can have a mailing address in a different state but that does not make you a resident of that mailing address.