Anyone that has ever moved to a new state has likely gone through the arduous task of updating an address on multiple documents and accounts. Did you know, however, that there may be a bigger and even more important update necessary for your financial security when you move? That important update would be updating your estate planning documents. Let us review the key reasons why you need to update your estate plan when you move to a new state.
To make sure the laws of your new state do not inadvertently alter the wishes of you or your spouse expressed in your estate plans, updates to your estate plan may be necessary. In a community property state, property acquired during the marriage is deemed to be the equal property of both spouses. On the other hand, in some non-community property states, property is deemed owned by the spouse whose name is on the title. Accordingly, spouses whose intention it is to separately own properties, such as spouses who have their own children from prior marriages, may find that moving into a community property state will make them equal owners of all property regardless of their intent. Similarly, spouses who move out of community property states may need to retitle properties to reflect their intent to be equal owners.
Additionally, there are often state specific rules for trustees or personal representatives. Part of your initial estate planning likely included the designation of a trustee of your trust or a personal representative of your estate. Some states have specific laws regarding who can serve as a trustee or personal representative, which may include residency requirements of the trustee or personal representative. Accordingly, it can be necessary to review your estate planning documents to check that your trustee or personal representative is still qualified by law to serve.
State laws can also vary regarding powers of attorney. If you do not update these documents to reflect the law of your new state, when these documents are needed, there is a chance they will be held invalid or ineffective.
You should also be mindful of the fact that your original documents likely reference the laws of the originating state. While moving from one state to another will not necessarily invalidate a will, trust, or other estate planning document, most attorneys will include a choice of law statement in the original documents, stating that the document has been made in accordance with the laws of your current state. This may create problems when your estate is distributed under new laws, especially if it is challenged by your heirs. It would be a wise decision to update your estate planning documents to reflect the laws of your new state.
While the thought of updating your estate planning documents may seem overwhelming, the good news may be that much of the difficult work was already completed, when you had the original documents created, including compiling all of your financial information and designating a trustee and beneficiaries. Accordingly, the process of updating your estate planning documents to reflect the current laws of your new state of residence should be a more streamlined process. Our office can work with your existing documents to update them. Please reach out to us to schedule an appointment.