California sports hero and worldwide golf superstar Phil Mickelson had some choice words about the new state and federal income tax rates he, as one of the highest-paid athletes in the world, will be forced to pay as a California resident. That is, if he remains in California at all. Mickelson has expressed his frustration with the increase in the state income tax, as he recently saw his tax rate increase from 10 percent to 13 percent.
Mickelson has gone so far as to mention relocating his family to Florida, one of only seven states in the country that does not have a personal income tax. From an estate planning standpoint, moving to Florida would make a lot of sense, as it would save the golfer literally millions per year. Other pro athletes, including fellow golfer Tiger Woods, are now permanent Florida residents as well, and Woods defended Mickelson's comments about not wanting to pay ever-increasing state income taxes.
While the move might allow Mickelson some asset protection from unnecessary taxation if he wants to leave California, many California residents would never dream of leaving the state they love and call home. Other Californians may not be happy about the increasing taxes, but family, work and community obligations are enough reason to stay put instead of uprooting for a tax haven state like Florida. The larger question, however, is how to preserve one's estate for future generations of Californians in the face of increasing taxes?
Californians committed to remain in the state have many things they can do to protect themselves and their estates from increasing state and federal taxation. An experienced estates and trusts attorney can explain how tax-deferred investments and various trusts can save an individual substantial sums, whether that person is a multi-millionaire golf pro or a middle-class American.
Source: WCTV, "Phil Mickelson Makes Comments About Taxes," Whitney Ray, Jan. 25, 2013