Review Your Estate Plan When You Move Across State Lines

When you make a move out of state, be sure to review your estate plan with an estate planning attorney in your new domicile, as trust and estate laws have some differences from state to state.

In most states, the probate court will recognize a will from another state. But in the case of a dispute, you can’t be sure the judge in the new state will understand your will the way that you meant it.

Your new place of residence might place restrictions on executors from out of state. It’s also possible that your new medical provider or bank won’t adhere to powers of attorney drafted under another state’s laws.

One big issue is whether you’re moving from a common-law property state — which is the case in most states — to a community property state, or vice versa. In a common-law state each spouse’s separate property obtained during marriage remains separate, while in a community property state assets acquired during a marriage are jointly held by both spouses. When you move between states with different governing principles on this issue, it can become unclear who owns what property at death, and measurable estate tax consequences might arise.

Income tax rules also differ from state to state. Some states don’t have an income tax, while others have significant income tax rates, which would have an impact on your estate plan. In some states, the law might allow a lower exclusion than the federal estate tax. If you don’t pay attention, you could have your estate taxed by your new state even if your estate is under the federal exclusion amount.