It’s easy to forget even big things in the hustle and stress of moving. There’s a lot to think about, and probably at the bottom of your Moving To-Do List is updating estate plans. But once you’re settled in your new location and everything’s finally unpacked, set aside some time to pull out your estate planning documents and give them a thorough review. Some items may need changes if you have moved to a different 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/personal representative: An executor’s role is determined by state law, and some states require your executor 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 resident agent. Your move may make it impractical or costly for your current executor to serve. For example, in Maryland, travel expenses for the personal representative are not reimbursable from the estate.
Communal property: In certain states, property acquired during marriage is considered communal, or community, property owned by both spouses. In the remaining states, spouses only own what is under their own name. Communal property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
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 any time you or they relocate. Some states may consider the domicile of the trust creator, beneficiary, or trustee in determining state income taxes.
Talk with your estate planning attorney to determine if any changes are necessary to ensure your wishes can be carried out efficiently and effectively.