Piles of boxes, moving vans, scattered packing peanuts, and endless forms -- the logistics and the enormous amounts of "stuff” associated with moving are enough to drive anyone crazy. The last thing on anyone’s mind in the midst of the mayhem is estate planning. However, when moving across state lines, there are a number of important steps that need to be taken to protect your assets and ensure your financial planning is moving with you.
You will need advice on your will, living will, trust and financial plans.
Although states will recognize wills and trusts created in other states, estate law is governed primarily by state laws. Each state has different rules about what a legal will must contain and how it should be executed. If specific provisions in your will discuss components created to address the laws of the state, such as homestead and guardianship, then those pieces might become outdated or difficult to enforce. Problems arise particularly when wills are created not only to accommodate specific state laws but actually directly reference them.
A living will is an integral part of an estate plan and is most vulnerable to state-to-state changes in law. A living will can specify what type of end-of-life care you want, relieving loved ones of that burden. Although a living will made in another state remains enforceable across state lines, delays and complications can occur when language is not consistent with healthcare providers’ requirements, and courts need to get involved. Documents that designate power of attorney in emergency medical situations are subject to the same problems- language issues become particularly problematic during time-critical moments.
Similar problems can arise for any trusts you have- they may need modifications such as state specific powers of the trustee. Trusts are usually created in the trustee’s state of residence, and as such, when the state of residence changes, the terms may need to be revised.
You may also need to revise your financial plans. It is important to take a look at changing tax rates and prepare your general finances accordingly. Tax rates vary from state to state, and estate taxes, income taxes, and property taxes will vary. In fact, you don’t have to move across state lines to have a major impact on your financial picture. You can face a substantial change in tax rate if you are moving from the Mainline to downtown Philly. To avoid sticker shock, make sure to check up on local and state tax laws earlier rather than later.
If you would like to discuss how a will, trust, estate or financial plan would be affected by an upcoming move in Montgomery, Philadelphia, or Delaware Counties, please contact us.