Moving to a new state is a substantial life change that can affect many aspects of one’s life, including estate planning documents.
A comprehensive estate plan includes not only an asset management strategy during one’s lifetime but also ensures that loved ones are provided for and one’s wishes are followed after one’s death. Relocating to another state can impact an existing estate plan. Consequently, certain steps should be taken to ensure the continued effectiveness of one’s estate plan.
The first step when moving to a new state should involve the review of an existing estate plan by a licensed local attorney.
Laws governing the estate planning documents can differ significantly from state to state.
It is crucial to evaluate whether one’s current documents comply with the laws of the new state of residence. For example, the property laws in a community property state like Nevada can differ significantly from the laws in a common law state.
Most states accept wills and trusts validly executed in other states, but if changes are required to comply with the local laws, there may be differences in formalities and procedures as states may have unique requirements for witnessing, notarization, and other formalities related to the execution of the documents.
Powers of attorney for financial and health matters may need to be revised after a move to another state to comply with the laws of the new state.
Powers of attorney grant a designated agent the authority to make financial and healthcare decisions on behalf of an incapacitated individual.
As states typically have different rules regarding these documents, it is critical to ensure that the designated agents have the necessary documents valid under the laws of one’s new state.
The move to another state can also impact real property holdings, such as a home or land.
The laws governing property rights can differ significantly from state to state and consequently it is important to review the governing laws with a local attorney to ensure the smooth transition of one’s estate plan and to determine how the new laws impact one’s inheritance designations.
Estate taxes may also differ from state to state, and consequently a move to another state may have tax liability implications. Thus, in addition to consulting with a local attorney, one may also wish to consult with a local tax professional to determine if any changes are needed to the estate plan in order to minimize the tax exposure.
When moving to another state and reviewing the estate plan, it may also be a good time to review one’s life insurance policies, retirement accounts, and other financial assets with beneficiary designations.
Whether updating or creating an estate plan after a move to another state, it is prudent to employ the guidance of legal, financial, and tax professionals who are licensed in the state as they can offer valuable review of the local laws and ensure that one’s estate plan complies with the laws and regulations specific to the new state of residence.
Moving to a new state is exciting, but it is important to consider its impact on one’s estate plan.
Each state has its own set of laws governing estate planning, including wills, trusts, and probate.
To avoid potential challenges and ensure that one’s wishes are followed, it is crucial to review and update the estate planning documents with the qualified professionals in ones’ new state.
Natalia Vander Laan is a Minden attorney.