Creating an estate plan involves a great deal of work. You need to work methodically through your assets to decide what should happen to each one and have multiple documents written to convey these decisions and ensure that the assets are passed along in an efficient manner. The typical estate plan may involve a will, living will, powers of attorney, and a trust, among other documents depending on your specific needs. When these documents were created, you probably noticed that they were drafted in accordance with the laws in the state where you live. This raises the question of whether you need to re-create all these documents if you move across state lines.
Because these documents do have slight but important differences between states, it is in your best interest to have them rewritten to reflect the requirements of your new state. However, do not despair, as you already did all the heavy lifting in terms of creating the plan. This revision is not as intensive as you might think, especially if you hire a lawyer (and you probably should). Consider it an opportunity to go over your estate plan in its entirety and ensure it accurately reflects all your current wishes. This type of review should happen regularly, but life often gets in the way.
Transferring Wills
If you already have a legally binding will that was valid in one state, it will most likely also work in your new state of residence. Most states have explicit laws that protect the document as it moves across the line. However, you should still consider rewriting the will for multiple reasons. The first has to do with marital property rules. Some states adhere to community property while others adhere to common law.
Moving between these systems means that rules about what is considered your property and what is considered your spouse’s may change. Community property states generally consider spouses co-owners of anything acquired during the marriage, with few exceptions. Common law states say that each spouse only owns what has that person’s name on the title. This difference can affect how assets pass between spouses and other people. If you are moving from one system to another, rewrite the will and other documents to make your wishes explicit.
Another issue with your will that can arise when you move between states has to do with the estate’s executor or personal representative. This person is named as the individual responsible for paying taxes, covering bills, and disbursing assets as outlined in the will. Some states are quite strict about who can serve in this position. For example, executors in Florida must be related by blood or marriage. If neither of these, the executor must be a Florida resident.
The process of executing the estate can be difficult if the person named is a person from another state, even your lawyer, as Florida will simply not allow that executor to take the proper action. Other states with similar rules generally allow out-of-state executors with extra stipulations. The easiest path forward is naming a local person to serve as executor.
Updating Named Beneficiaries and Living Trusts
An essential part of any estate plan involves naming beneficiaries for insurance policies, retirement plan accounts, bank accounts, and other assets. By naming beneficiaries directly with the asset, you can avoid some of the red tape that may otherwise be involved. Importantly, your beneficiaries represent an agreement between you and the institution that controls the asset in question, which could be a bank, insurer, or IRA custodian. Because it is an agreement between you and this other party, it is not affected by changes in jurisdiction. When you move, your primary responsibility is ensuring that the asset controller has your current location and contact information and that of your beneficiary.
A revocable living trust is all not affected by a move across state lines as it is not subject to the same rules as a will. Regardless of where you signed the document, it will be valid anywhere within the United States. When you move, it is still advisable to review the trust and make sure everything is as up to date as possible. Also, remember to add any real estate purchased in your new location to the trust if you want it to bypass probate when you die.
Maintaining Medical Directives and Powers of Attorney
Advance medical directives and healthcare powers of attorney documentation falls into somewhat of a gray zone as you move across state lines. Some states have explicit protections for these documents even if they were signed in another state. In these jurisdictions, the documents will always be honored. However, this same protection does not exist in the jurisdictions that do not have explicit legal protections for these documents.
In these locations, the decision of whether to honor the requests outlined in your documents is in the hands of your healthcare providers. While providers always want to honor someone’s wishes, the truth is that this becomes challenging when the formatting of documents is unfamiliar. In any case, ensuring that your wishes get followed becomes much easier when medical providers have familiar forms.
Each state has its own forms related to healthcare power of attorney and advance medical directives. The information contained in these forms varies considerably. In some states, both forms get combined into a single document. The specific details included can be different between states, not to mention the language used. Some states call the person with healthcare power of attorney a healthcare agent, while others call that person a proxy. Furthermore, the forms can be very different in how you limit the power of people designated to speak on your behalf. Since these forms only become relevant in stressful situations when people may not be thinking clearly, it is best to reduce chances of confusion and stick to the local recommendations, and have these documents drafted again once you settle in your new jurisdiction.