Does your out of state move involve a to-do list a mile long? It often does. If you are moving out of state, does your checklist include updating your estate plan? It should. Let us discuss the key reasons why you need to update your estate plan when you move to a new state.
Although moving to a new state will not likely invalidate an existing will or trust, the document may have been drafted with a statement indicating it was created pursuant to the laws of the original state and they are deemed controlling. This may create complications. If your estate ultimately ends up in probate court, it may be necessary for your heirs to employ lawyers from both the original state and your current state. To prevent this from happening, meet with an estate planning attorney in your new state to update your estate planning documents.
State estate taxes vary. While federal estate tax is the same no matter what state you reside in, not only does state estate tax vary by amount, but some states do not even have an estate tax. Thus, if you relocate from a state with no estate tax or a high estate tax exemption to a state with a low estate tax exemption, you could potentially create tax liability for your beneficiaries. On the other hand, if you move from a state with a low estate tax exemption to one with a higher estate tax exemption, you have the opportunity to modify your estate planning to take advantage of this tax break.
Additionally, power of attorney laws may be different in your new state. It is state law that governs powers of attorney. Therefore, it is imperative that these documents be updated to reflect the state law of your new residence or else your current documents may be held invalid.
Another consideration is that moving in or out of a community property state can alter tax liability. Another often overlooked estate planning issue when relocating to a new state is the titling of property. Moving in or out of a community property state can have serious tax implications for the surviving spouse. An estate planning attorney can assure any properties are properly titled to avoid unnecessary tax liabilities.
As it is very important to update your estate planning documents to reflect the laws of your new home state, make it a point to meet with an estate planning attorney in your new state to make the necessary updates to your estate planning documents. Our office is here to assist you in making the necessary updates so that your estate plan continues to protect and further your goals.