Every year, thousands of Americans relocate to new states, whether for career changes, after their retirement or other reasons. Among several items on your to-do list when moving should be to update your estate plan. When moving to a new state, it is imperative that you factor in both the structure and validity of your estate plan in your new home state.
How Can You Know if Your Estate Plan is Valid in Another State?
Generally speaking, estate planning documents that are valid in one state will most often be valid in another. However, each state does have varying laws regarding wills, trusts and other estate planning documents, so you will want to check in on your new home state’s laws.
When Should You Review Your Estate Plan?
If you are moving to a new state, you should look to update your estate plan as soon as possible. Doing so can help you ensure that your estate plan is both up to date and in accordance with the laws in your new state of residence.
Even if you are not relocating to a new state, it is always a good idea to keep your estate plan up to date. From time to time, state laws regarding estate planning change, and can negatively impact your estate plan if it is not updated accordingly.
What Estate Planning Laws Should You Know When Moving to a New State?
Every state has laws surrounding estate planning – from wills to trusts, powers of attorney and more. In addition, states have varying laws regarding matters that may impact your estate plan, such as marriage, divorce and estate taxes. Below are some estate planning laws that you should keep in mind:
- Power of Attorney Laws
- Property Rights of Spouses
- Executor of Your Will
- Children’s Rights to Inheritance
- Estate and Inheritance Taxes
Power of Attorney Laws
Power of Attorney laws vary from state to state. Additionally, there are various laws that are specific to Durable Powers of Attorney, Medical Powers of Attorney and Financial Powers of Attorney that you will need to know.
Property Rights of Spouses
When relocating to a new state, it is important to understand laws surrounding spousal property rights. The majority of states in the U.S., including New York and Virginia, are common law states, meaning spouses can keep individually held assets from prior to the marriage (while assets obtained during the marriage belong to both partners equally). However, nine states are community property states, meaning that both spouses own everything equally – including inherited property. The following are community property states:
- New Mexico
Executor of Your Will
Laws regarding executors vary between states. For example, some states require your executor to be a relative or resident of the state while others do not.
Children’s Rights to Inheritance
In general, children do not automatically have rights to inherit from a parent’s estate. However, there are state-specific instances in which children can inherit part of a parent’s estate by law.
Estate and Inheritance Taxes
Laws surrounding estate and inheritance taxes differ from state to state, which highlights the importance of staying up to date on the laws in your new state.