Estate Planning Articles

Don’t Forget to Update Your Estate Plan When Moving Across State Lines

by Alli Thomas

Apr 6, 2022

Relocation after retirement is becoming more common. According to moving services provider Hire A Helper, in 2020, over nearly 400,000 Americans moved for retirement – the highest number in five years. 

Moving is a significant undertaking, particularly when you’re relocating to another state, and it’s easy to overlook or forget many details. For retirees moving to another state, one significant aspect that shouldn’t be overlooked is their estate plan, as laws affecting estate planning differ state to state. 

Here are some estate planning-related items that you should review as you plan your interstate move:

1. Your will.

Assuming it was correctly executed in your current state, it’s generally safe to assume that your will is fine as is. However, your new state may have different rules. Some examples include the age of your named executor or whether they have felony convictions against them. The location of your executor is also worth considering. If you’re moving across the country from where your executor lives, they may have to travel a great deal to handle your estate after you die. If you’re moving somewhere where you have no close family or friends, you may want to consider appointing a corporate executor in your new home state. 

2. Marital property. 

This aspect ties back to your will. If you’re married, you’ll want to figure out how your new state views marital property. If you move to a community property state from a common law state, you may need to create a new will altogether because your existing one may not accomplish your intentions for the distribution of your property.

3. Estate and inheritance taxes. 

There are currently a dozen and a half U.S. states (plus Washington DC) that levy estate or inheritance taxes on residents and non-residents who own property in the state. Exclusion amounts and tax rate vary significantly among these states, so be sure to learn the rules that apply to your new state.

4. Advance directives/living wills.

There’s no guarantee that your advance healthcare directive will be honored in a different state. Review it and ensure that it meets the criteria of your new home. If not, you’ll need to update it, or perhaps just create a new document that does meet your new state’s laws. 

While it’s easy to get wrapped up in all the other details of a big move, it’s important to make sure that you keep your estate plan current. If you’d like to discuss possible changes to your plan (or get a second opinion), click here to make a free, no-obligation appointment with one of our advisors.

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Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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