Moving? Remember to unpack that estate plan
There’s a lot to think about when you move. In all the hustle and work of a relocation, certain things can get forgotten. Once you have the utilities on and the boxes unpacked, it’s time to have your estate planning documents reviewed by an attorney in your new home state.
Here’s a list of updates that might be needed:
Estate taxes: Currently, 12 states and the District of Columbia have state-specific inheritance or estate taxes. Your estate plans may have been drafted to address local taxes which no longer apply. You could wind up with an unexpected tax bill or miss out on the full benefits your new state provides.
Your executor: An executor’s role is determined by state law, and some states require your representatives to reside in the state in which your will is probated. If your executor lives out of state, they may have to post a bond to serve or appoint a local representative. Your move may make it impractical or costly for your current executor to serve.
Communal property: In some states, property acquired during marriage is considered community property owned by both spouses. In other states, spouses only own what is under their own name.
These designations can have implications for how your will is carried out, including the step-up in basis for tax calculations. Review the titling of your assets to determine if additional planning is needed.
Health care directives: Advance medical directives, living wills and powers of attorney should always be updated when you move to ensure they are in adherence with your local laws. Every state has its own documents and forms, and differences could delay or complicate your representative’s ability to act on your behalf.
Irrevocable trusts: Review your named trustee and beneficiaries for an irrevocable trust anytime you or they relocate. Some states may consider the domicile of the trust creator, beneficiary or trustee in determining state income taxes.
Work with your estate planning attorney to determine if any changes are necessary to maximize your tax savings and ensure your wishes can be carried out efficiently and effectively.