How Relocation Can Affect Your Estate Plan And What To Do About It
A major relocation can fill you with excitement and optimism, but it can also present you with some not-so-pleasant estate planning challenges. Whether you're settling in another country, moving across state lines, or simply transferring your residence to another town, this change may require you to go back and look at your estate documentation, assets, and decisions. Here are some of the problems that may pop up as you're planning your move, along with some ways that your estates and trusts attorney can help resolve them.
Your Beneficiary Deed May No Longer Make Sense
Are you actually selling your home and moving into a different residence? If you're divesting yourself of that property, you obviously won't be able to bequeath it to anyone once that transaction goes through. You'll probably have to rewrite your beneficiary deed, replacing the address of your previous residence with the address of your new home. While you might think that your intentions remained clear enough, the resulting confusion could, at the very least, delay the transfer of assets and require a lot of extra work to smooth out. Take care of it as soon as you take the keys to your new property.
You May Need a New Power of Attorney
An interstate move can force you to rethink your power of attorney (POA) and related agreements. That's because different states often have different laws governing the way POA agreements work. A POA created in one state may be declared invalid in another state. Things get even murkier if your POA was bundled with healthcare directive agreements. The state to which you're relocating may not permit such combinations of documents. An estates and trusts lawyer can help you draw up a fresh POA and, if necessary, new healthcare directive documents.
Your Assets Might Need a New Trust
Are you moving to a new state for the indefinite future, or do you plan on spending some time in your former state of residence as well? This decision is more than just a matter of preference; it can also affect your ability to maintain your assets as they currently stand. If you're relocating for a fixed period of time or maintaining properties in both states, you may want to leave your assets funded by your existing trust. If your move is more complete and permanent in nature, however, it might make more sense to make a whole new trust created (and funded) in your new state of residence. Your estates and trusts attorney will need to compare the pros and cons of both approaches to figure out the wisest course of action.
Your New Domicile State May Not Recognize Your Marital Property or Executor
The differences in estate laws between one state and another can impact your marital property as well as the assets funded in your trust. Some states follow the rules of community property, in which the marital unit, not the individuals, own the property in question (with certain recognized exceptions). Other states are common-law states, in which property ownership is determined purely by whose name is on the deed or proof of purchase. You need to know which marital property system your new state upholds so that you can make any necessary changes to your estate plan or at least rest assured that you and your spouse have nothing to worry about,
You Might Need Two Estate Plans Instead of Just One
Moving to another country can create even larger estate plan issues than moving to another state. If your move represents a permanent, one-way transfer of assets, you might as well start over by creating an all-new estate plan that conforms to the laws of your adopted country, scrapping the old plan as defunct. But what if you have every intention of maintaining the properties you hold back in the U.S.? In that case, you have every right to maintain two separate estate plans: one for your U.S. assets and one for your assets in your adopted country.
Estate planning can be complex enough when you're staying put, so don't let yourself get tripped up by additional complications as you relocate. Talk to your estates and trusts attorney to discuss your plans, needs, goals, and concerns. It's one move that you'll definitely be glad you made!
