Moving is always a huge undertaking, even if you’re just going around the corner. Add the crossing of state lines to the mix, and you’re talking about a move to Stress-City! So we get it when we hear those internal groans at the thought of updating an Estate Plan. But, it’s important. Any time you’re moving out of state, you absolutely must revisit your Estate Plan to make sure it’s valid and structured the way your new state requires.
Understanding state specific estate planning laws is crucial if you want to spare your loved ones additional grief on top of your loss. Keep reading to learn more about the importance of keeping your Estate Plan valid, regardless of where you live.
Are Wills Valid from State to State?
Generally, yes. A properly executed Will written in one state in accordance with state laws will most often hold up if you move to a different state. Are Wills state specific? Each state has its own laws regarding Wills and Trusts - this is an important thing to keep in mind if you’re moving out of state. It’s always a good idea to keep your documents up to date - even if you’re not moving.
Ideally, you should update your estate planning documents in your new state of residence as soon as possible. The principles of estate planning are similar from state to state. Typically, you want to get your affairs in order and determine which assets will go to which beneficiaries after you pass away. That way, family members won't argue over who gets what. Rethinking your Estate Plan when you move, you can ensure that any necessary changes conform with state laws.
State-specific estate planning laws can have a big impact on your Will and other final documents, like a Trust. This is particularly true when it comes to spousal property rights, estate and inheritance taxes, and how your children will eventually inherit your assets. A properly prepared Estate Plan can often help you avoid probate, and at the end of the day, you really do want to try and avoid probate if you can. That’s because the cost and time probate can take might end up eating a huge bite out of your estate value. So, you should definitely review the estate planning laws in your state once you get settled.
What Are Some State Specific Estate Planning Laws?
Even though it can be thought of as somewhat of a nuisance, updating estate planning documents will help ensure that you meet the necessary legal requirements in your new state of residence. Since you've already made the major decisions about how to distribute your assets once you pass away, getting the documents set up to reflect any state-specific laws tends to go relatively quickly and be fairly painless.
Marital Property Rules
You may wonder, do I need a new Will if I move to another state? Let's say you move to a community property state. The state could treat all your property as belonging to you and your spouse equally. If you and your partner have strong views about how your estate should be settled after the first one of you passes away, it’s even more important that you review your Estate Plans when you relocate to another state.
You may need to draft a new Will and Trust entirely to conform with the laws in your state of residence. Or, you may just need to do a quick update to ensure you’re covering all your bases.
For example, you might currently live in a community property state but move to a common law state, such as Virginia. In community property states, spouses own everything equally, including inherited property. In the majority of states, common law property laws allow spouses to keep assets obtained before the marriage. However, any assets acquired during the marriage belong to both spouses equally. This affects the applicable assets to include in your estate planning documents.
Executor of the Will
The rules for Executors of Wills can also vary from state to state. An Executor is someone you name in your Will to handle the distribution of your estate when you pass away. This individual or entity pays any outstanding bills and taxes, collects your property and eventually distributes the remainder of the estate value to your beneficiaries. Some states put limitations on who can act as an Executor. For example, Florida limits the role of Executor to those related by marriage or blood relative or a resident of the state.
Let’s say you moved to Florida from New York. You cannot have a New Yorker as your Executor unless they’re related to you by blood or marriage. You can always assign an estate planning attorney as your Executor, if you’re hoping to remove the burden from your loved ones.
Power of Attorney
Each state has its own laws and forms when it comes to granting someone Power of Attorney. And, you can grant separate Powers of Attorney for financial matters versus advanced medical directives (which give someone the right to decide to withhold medical treatment in an end-of-life situation).
Some states accept financial or healthcare Powers of Attorney granted in other states. Others don't have clear laws covering this situation. In order to take the guesswork out of the process, you should review your plan and update your documents if necessary.
Is My Living Trust Valid in Another State?
A Revocable Living Trust should (in theory) hold up in a new state. However, if you buy a home in your new state of residence, it's important to update your estate planning documents to include your new assets. While Living Trusts are transferable between states, for the most part, it makes sense to include any necessary revisions to reflect estate planning laws in your new state.
Using state-specific forms can help avoid any delays in settling your estate after you pass away. This can ensure there aren’t any headaches or delays in distributing your assets among your heirs.
Update Your Estate Plan Today!
By now you should understand some of the ways that moving to a new state can impact your estate planning documents. While some states recognize Wills and Trusts drafted in other states, it really is important to update your financial and estate planning documents to reflect the laws where you currently live.
Trust & Will’s online estate planning services make estate planning easy, affordable and fast. If you’ve recently moved and need to review and update your plan, we can help.
Estate Planning is one of those things that too often we put off in life. But the truth is, it’s one of the most important things we can do to protect our family, our estate and our ultimate legacy. Moving is never easy, and you may feel like updating your plan is just one more chore you have to tackle...with everything else you’ve got to do to plan for an out of state move. But we make it easier than ever for you to update your plan, so you can feel confident it’s up to date in every way, including per any new state laws!
Is there a question here we didn’t answer? Reach out to us today or Chat with a live member support representative!
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