People in California choose to live in the Golden State for many personal and practical reasons. While the quality of life for many here is indeed quite high, Californians pay dearly for these benefits when it comes to taxes. Across the 50 states in the U.S., California has the distinction of having the highest gasoline tax, highest sales tax and highest income tax for high earners. In addition to those staggering figures, California has the nation’s highest energy costs, and housing in California is 2.7 times more expensive than in Texas, which can put an even bigger dent into residents’ bottom lines at the end of the day.
With so many burdensome taxes and expenses, it’s no wonder that many Californians want asset protection that allows them to keep their wealth from evaporating into the black hole of the state treasury. In fact, many Californians have simply had enough and uprooted themselves and their families; in the last 20 years the net population has decreased by about three-and-a-half million people.
Still, people who call California home don’t need to leave the state in order to avoid unnecessary taxation; they simply need to spend more time focusing on how to make their financial situation work for them. Legal advice can form an integral component of this financial planning.
This process often starts with estate planning, and taking the proper steps to make sure family and loved ones are provided for in case of an emergency. There are ways that people can use trusts to distribute significant assets without incurring an excessive tax burden, for example. In a constantly shifting tax law landscape, however, most state residents need the counsel of an experienced attorney when proactively combating their tax-related challenges.
Source: Forbes, “As Jerry Brown touts California in China, its citizens pack their bags,” David Davenport, April 11, 2013
