The Importance of Updating Your Estate Plan After Moving to a New State

 Posted on August 11, 2021 in Estate Planning

According to national statistics, approximately 31 million Americans move each year. Some move across town, while others move across the state. However, about four million move to a different state. Out-of-state moves can be stressful to coordinate, especially if you have a family and an entire household to move. There are also all of the things you need to do when you arrive in your new state – including finding out about your children’s new schools, finding new doctors, dentists, hair salons, grocery stores – the list goes on. But what many people never think about is that by moving to a new state, they also need to update their estate plans.    

Estate Laws

If you have had a qualified estate planning attorney help you with your estate plan, it likely contains a variety of documents that stipulate how you want your assets and property to be distributed upon your death. Estate plans can contain a will, living trust, advance directive (living will), and power of attorney, along with other documents, depending on your own personal situation.

Every person’s estate plan is developed based on the laws of the state they live in. And just like many other laws, estate planning laws vary from state to state. This not only includes estate planning laws, but also laws regarding marital property, inheritance tax, income taxes, and state estate taxes.

What may have been the law in the state you lived in when your estate plan was written may not be the same law in the new state you have moved to. These factors can significantly impact how your estate is divided when you die if you do not make the necessary changes.

Estate Planning Documents That May Be Affected by an Out-of-State Move

When you draft estate plans, part of the process is establishing a domicile state. Your domicile state will determine any tax-related issues for your estate, including capital gains tax, estate tax, inheritance tax, and state income tax. If your prior state did not have a state income tax or it was low, and you have now moved to California, which is deemed a high-income tax state, this could greatly affect tax consequences for your estate if it is still based on your current estate plan.

Medical care is also another issue that will need to be updated according to the new state’s laws you have moved to since medical directive laws vary state to state. You may also need to reconsider who you had previously named as the person you named in your medical directive if you have moved a significant distance away from where they now live. This may also apply to any other individuals you had named as power of attorney for financial issues, executor for your estate, and guardian for your children.

How a state determines the division of marital property in an estate plan may also be different, especially if you have moved from a common law property state to a community property state. This can get especially complicated if one or both spouses have children from prior marriages and the state’s laws would override the existing will. These laws can also affect how you have your assets titled, as well.

Other important issues that may need to be addressed include irrevocable trusts and gift and inheritance taxes. These also fall under the laws of the individual states and the plan you put in place in your old state may not be as beneficial to your heirs according to the laws in your new state.

Contact a California Estate Planning Attorney

It is recommended that anyone with an estate plan should have a skilled California estate planning lawyer review the plan every few years or when there has been any kind of major life event, such as a birth of a child, marriage, or divorce. If you have recently moved to California and need your estate plan reviewed and updated, contact the Law Office of David Schechet at 800-282-4731 to schedule a free consultation.

Source:

https://oag.ca.gov/consumers/general/estate-finance