The Moving Day Question That Could Cost Your Family Thousands
Picture this: Sarah and Jim just closed on their dream retirement home in Florida. After 30 years in Minnesota, they're finally living the snowbird lifestyle they've always wanted. But as they're unpacking boxes, Sarah turns to Jim with a worried look. "Honey, what about our trust? Do we need to update it now that we've moved?"
It's a question I hear almost weekly in my practice. And the answer? Well, it depends on several crucial factors that could either save your family thousands of dollars and months of legal headaches – or cost them dearly if you get it wrong.
Same State Move: You're Probably Fine (But There's a Critical Exception)
Let's start with the good news. If you've moved within the same state – say from Maple Grove to Minnetonka, or from Fort Myers to Sarasota – your trust itself typically doesn't need updating. The laws governing your trust remain the same, and your carefully crafted estate plan continues to work as designed.
But here's where many families make a costly mistake that I've seen play out dozens of times in my nearly three decades of practice: they forget to properly transfer their new home into their trust.
The $8,000 Oversight
Let me tell you about John and Susan, a couple who moved from Maple Grove to Plymouth. They had a trust-based estate plan, but when they bought their new home, their real estate agent and title company simply put the deed in their individual names – not in the name of their trust.
When John and Susan passed away, their kids discovered the harsh reality: the house would have to go through probate before they could sell it even though John and Susan had set up a trust. That is because when John and Susan passed away, they owned the home in their own names rather than their trust. The probate process took 10 months and cost nearly $8,000 in court fees, attorney fees, and other expenses – money that should have gone to them - all because John and Susan had missed putting their new home into their well-crafted trust.
This scenario becomes even more expensive if you purchased your home as "tenants in common" rather than "joint tenants." Those two little words on your deed can make the difference between a smooth transition and a double probate nightmare.
The Two Magic Words That Could Save Your Family Thousands
When couples purchase real estate, they typically take ownership in one of two ways: as joint tenants or as tenants in common. Most people don't even realize there's a difference, but it's absolutely critical.
Joint tenants means that when one spouse dies, the surviving spouse automatically owns the entire property. No probate needed for that first death. However, as discussed in the example above, probate is still required to transfer ownership of the home when the surviving spouse passes unless the home was in their trust.
This scenario becomes even more expensive if you purchased your home as "tenants in common" rather than "joint tenants." Those two little words on your deed can make the difference between a smooth transition and a double probate nightmare.
Tenants in common means each spouse owns their separate share – typically 50% each. When one spouse dies, their share must go through probate before the surviving spouse can gain full control. Then, when the surviving spouse eventually passes, the property goes through probate again.
That's two separate probate proceedings for one house – potentially doubling your family's legal costs and delays.
Let me tell you about Mark and Linda, a couple who moved from Plymouth to Minnetonka. They had a trust, but when they bought their new home, their real estate agent and title company simply put the deed in their individual names – not in the name of their trust. Worse, they listed the title as Mark and Linda owning it as tenants in common rather than as joint tenants.
When Mark passed away unexpectedly two years later, Linda discovered the harsh reality: that house would have to go through probate before she could sell it or transfer it to their children. The probate process took 8 months and cost nearly $7,000 in court fees, attorney fees, and other expenses – money that should have gone to their family.
The solution? A properly prepared deed transferring your new home into your trust. It's a relatively simple document, but it must be prepared correctly and recorded properly to avoid future problems.
If you would like to discover more about the differences between owning property as “joint tenants” versus “tenants in common”, click here to read my article.
Moving to a Different State: When Your Trust Needs a Check-Up
Now, if you've moved across state lines, we're dealing with an entirely different situation. Each state has its own laws governing trusts, and what worked perfectly in your old state might not provide the same protections in your new one.
Think of it like your driver's license. While most states honor each other's licenses, if you establish permanent residency in a new state, you eventually need to get a new license that complies with that state's requirements.
Your trust and estate planning documents work similarly. They need to be reviewed by an attorney licensed in your new state to ensure they conform to local laws and provide maximum protection for your family.
The Florida Factor: Why the Sunshine State Requires Special Attention
Florida presents unique challenges that many new residents don't expect. As one of only a handful of attorneys licensed to practice in both Minnesota and Florida with offices in both states, I see these issues regularly.
Florida has higher execution standards and formalities for estate planning documents than most other states. What might be a perfectly valid will or trust in Minnesota could fail to meet Florida's stricter requirements.
But even more importantly, Florida offers some incredible benefits that you could miss out on if your documents aren't properly updated.
Homestead Protection: Your Shield Against Creditors
Florida's homestead protection is among the strongest in the nation. Your primary residence can be protected from most creditors, and your property taxes are capped at a 3% annual increase under the Save Our Homes amendment.
But here's the catch: your trust and the deed transferring your home into the trust must contain specific language to maintain this homestead status. Generic language that worked in other states won't cut it in Florida.
I recently worked with a couple who moved from Chicago with a $2 million trust and a $800,000 home. Their Illinois attorney had prepared everything perfectly for Illinois law. But under Florida law, they were about to lose their homestead protection – potentially exposing their home to creditor claims and higher property taxes – until we updated their documents with the required Florida-specific language.
Property Tax Portability: Keeping Your Low Assessment
Florida also allows you to transfer your Save Our Homes benefit when you move within the state, but only if your documents are structured correctly. Miss this, and you could see your property taxes jump dramatically.
The Tax Residency Game: Proving You've Really Moved
If you're moving to Florida from a high-tax state like Minnesota, New York, or California, updating your estate planning documents serves another crucial purpose: proving you've truly established Florida residency.
States with aggressive tax departments – and Minnesota is definitely one of them – often challenge former residents who claim to have moved to no-tax Florida. They'll scrutinize everything from where you vote to where you bank to where your legal documents are governed.
Having your trust and other estate planning documents updated to operate under Florida law creates a paper trail showing your intent to establish permanent Florida residency. It's one piece of a larger puzzle, but an important one.
Sarah's Story: When Minnesota Came Calling
Sarah, a former Minnesota resident, thought she had successfully established Florida residency. She bought a home, got a Florida driver's license, and even registered to vote. But she kept her old Minnesota-based trust and will.
Three years later, the Minnesota Department of Revenue audited her, claiming she was still a Minnesota resident for tax purposes. One of the factors they pointed to? Her estate planning documents were still governed by Minnesota law, suggesting she hadn't truly committed to Florida residency.
We quickly updated her documents to Florida law, but it was part of a costly audit defense that could have been avoided with proper planning from the start.
Beyond the Trust: Other Documents That Need Attention
When you move to a new state, it's not just your trust that might need updating. Your entire estate planning portfolio should be reviewed, including:
- Pour-over wills that work with your trust
- Powers of attorney for financial matters
- Health care directives and living wills
- HIPAA authorizations for medical privacy
Each state has different requirements for these documents. Florida, for instance, requires very specific language in powers of attorney that other states don't require.
The Technology Factor: Why Modern Moves Are Different
Today's families are more mobile than ever, and technology has changed how we live and work. You might own property in multiple states, have bank accounts scattered across the country, or run a business remotely.
This complexity means your estate planning needs to be more sophisticated than your parents' generation required. A trust that worked when all your assets were in one state might not provide adequate protection when your financial life spans multiple jurisdictions.
Taking Action: Don't Let Moving Day Become a Legal Nightmare
Moving is stressful enough without worrying about legal complications. But taking care of your estate planning updates promptly can save your family significant time, money, and heartache down the road.
If you've moved within the same state: Contact our office to ensure your new home is properly transferred into your trust. This simple step could save your family thousands in probate costs.
If you've moved to a new state: Schedule a comprehensive review of all your estate planning documents to ensure they comply with your new state's laws and take advantage of any additional protections available.
If you've moved to Florida specifically: Make sure your documents are updated to maintain homestead protection, take advantage of tax benefits, and establish clear evidence of Florida residency.
Why This Matters More Than Ever
In my nearly 30 years of practice, I've seen too many families discover these issues at the worst possible time – when a loved one has passed away and it's too late to fix the problems easily.
The good news? These are all preventable problems with proper planning and timely updates.
Whether you're dealing with a simple in-state move or a complex multi-state relocation, the key is working with an attorney who understands not just the law, but how to structure your plan for your specific situation and goals.
Take Action Today
Don't let your move create unintended consequences for your family. If you need to create a plan or update an existing one, call us today at our Florida office at (941) 909-4644 or our Minnetonka, Minnesota office at (763) 420-5087 to schedule your consultation.
You can also fill out the contact form on this page, and a member of our team will reach out to you to schedule your consultation.
Discovering More About Florida Residency? If you'd like to learn more about establishing residency in Florida, grab your copy of my book, The Florida Snowbird Guide: A Fast & Friendly Legal Guide for Florida Relocation and Snowbirds, available on Amazon, or download a digital copy for free by clicking here.
Want to Discover More Money Saving Strategies? If you'd like to discover more about how to avoid probate, save on taxes, protect the money you leave for your kids in the event they get divorced and much more, join us in my upcoming exclusive masterclass. Click here to sign up.
Your family's financial security shouldn't be left to chance. Take action today to ensure your move enhances your life without creating legal complications for tomorrow.
