Interstate moves come with a long to-do list: getting new IDs, updating your mailing address, setting up utilities and reviewing insurance coverage. If you’re moving to a new state for retirement, there’s another important task to add to the list: reviewing your estate planning documents.
Why Moving to a New State May Require Estate Planning Updates
State law governs probate procedures and other aspects of estate administration. For example, some states levy estate taxes or inheritance taxes in addition to the federal estate tax, while others do not. Some states have community property laws governing ownership of assets and debts acquired during marriage, while others follow different property rules. States may also have different signing requirements, inheritance rights, intestate rules and various other estate laws.
These differences can have a significant impact on your estate plan. A plan that was created with the tax laws of one state in mind might not be as favorable in another state with different tax laws. Documents accepted in one state might be challenged in another. Assumptions may no longer be valid. In short, the estate plan may need to be redone, or at least revised, to ensure that it holds up under a new set of state laws.
Life Changes Often Require Estate Planning Adjustments
A move represents a major life change in and of itself. It also often coincides with other major life changes.
The underlying reason behind your move may also affect your estate plan. For example, if you are moving because of a divorce or marriage, you may need to update your beneficiary designations and will. If you’re moving due to illness or disability, you may need to take a closer look at your incapacity planning documents. Downsizing as you begin your retirement can affect the assets you own, with potential implications for your will and any trusts you’ve established.
Which Estate Planning Documents Need to be Updated After a Move?
Not all of your estate planning documents will need to be updated after a move. However, it’s difficult to see which ones will require modifications until you review everything.
Wills
In addition to outlining how you want your assets to be distributed, your will is an opportunity to nominate someone to serve as the executor of your estate. If you have minor children or special needs adults in your care, you can also nominate a guardian or conservator. Consider how the move affects your assets and whether it makes sense to change any of your nominations.
Trusts
You can change revocable trusts at any time. Irrevocable trusts are harder to change, but modifications may be possible with court approval. Consider whether your move affects the assets or conditions associated with any trusts you’ve established. You may also want to determine whether it makes sense to change the trustees now that you’re living in a new region.
Deeds and Titles
If your move involves the purchase of new real estate, it’s important to think about how you’ve set up your deed. Likewise, consider how you’ve set up the title for any vehicles or boats that you’ve purchased or transferred to your new state.
When obtaining deeds and titles, you may be able to use joint ownership or a transfer-on-death deed to avoid probate. Because the rules vary from state to state, a move is a good opportunity to consider whether these options make sense in your situation.
Beneficiary Designations
Your move may not affect your beneficiary designations, but it’s a good idea to review your designations and ensure that they are up to date. This is especially important if your move coincides with other major life changes, such as retirement or divorce.
- Life insurance. Who will receive the death benefit?
- Retirement accounts. Who will inherit your funds?
Incapacity Planning Documents
Incapacity planning is an essential but often overlooked part of estate planning. If you are unable to make decisions for yourself, who will represent you, and how will they know your wishes? Incapacity planning allows you to make your wishes known.
You should have the following:
- Financial power of attorney: Authorizes a person to make financial decisions on your behalf and manage your assets if you become incapacitated.
- Medical power of attorney: Authorizes a person to make medical decisions on your behalf if you become incapacitated.
- Living will: States what care you want to receive if you are unconscious or otherwise unable to make medical decisions for yourself.
After a move, consider whether these elements need to be updated. For example, you may wish to designate someone who lives near you as your financial or medical power of attorney.
Use Your Move as an Opportunity to Review Your Estate Plan
No matter how thorough your estate plan is, you’ll need to update it occasionally.
Over time, your wishes may change. You will acquire new assets and dispose of others. Your family situation will evolve through marriage, divorce, childbirth and death. Every estate plan can benefit from regular review, and a major life change is a good opportunity to do this. In addition to updates that are necessary because of the move, you may find additional elements that have become outdated and need to be addressed.
An estate planning attorney can help you review your estate planning documents and ensure that everything still reflects your wishes.
Have you moved to Oregon recently? Contact Skinner Law to set up a review of your estate plan.