A common question we get is whether or not you need to update your will, trust, financial power of attorney, living will or directive or other estate planning documents when you move to another state. In todays’ video, I’m going to answer that question and reveal some things you should be aware of and do when you move to a new state or even just purchase a home in another state.
So here are some things you should be aware of if you are thinking about moving to a new state, or even if you are just thinking about buying a second home in another state. For example, many of my clients have lake homes in WI, or farm land they inherited in Iowa or Nebraska. Many more are buying a second home in FL and becoming snowbirds or are even moving full-time to FL in retirement.
Many states have state-specific powers of attorney.
So as part of your estate plan, you should have an up-to-date financial power of attorney giving a spouse, family member or others the ability to step in and manage your financial affairs in the event you are unable to. If you don’t have one, your family may need to go to Court to get the authority to manage your finances in the event you become incapacitated.
Many states will have a state specific form, For example, both MN and FL have separate power of attorney forms and even differing requirements for their contents and their execution. Many states also require that a financial power of attorney be recorded with either the county or a court.
Probate requirements can vary between states.
One of the biggest misunderstandings I see in the general public when it comes to estate planning is that wills avoid probate. They do not. A will is a set of written instructions to a probate court about how you want probate to occur. So absent something else or additional planning, if you have a will, your family will need to go through probate. And probate costs and timelines vary by state.
So if you are moving from a state where probate can be relatively quick and inexpensive and your currently have a will-based estate plan, but are now moving to a state, like Minnesota or Florida, where probate can be much more time-consuming and expensive, you may want to switch to a trust or other planning tools that would allow your family to avoid probate.
Also, if you own assets in more than one state, and you do not already have a trust, you should consider switching to a trust-based plan. So for example, let’s assume you live in the MN or another state and then buy a home in FL where you plan to spend part of the year. Or you move to FL but keep a home back up north. If you were to pass away, your family would need to open a probate proceeding in your home state to manage assets there. However, that Court will not have jurisdiction over your home and other assets in the other state, only that state’s court does, which means your family will have to open a second, ancillary probate, in that state – which greatly increases the time and expense of managing your affairs. That is why we always suggest clients use a trust-based estate plan whenever they have a home or assets in more than one state as it avoids having to do multiple probates in multiple states.
Estate tax and other tax laws vary by state.
Some states are community property states and some states are separate property states. Some states, like FL, are separate property states but allow a married couple to choose to treat assets as community property and save on taxes. Some states, like MN, have a separate state-level estate tax, whereas some states, like FL, do not have a state-level estate tax. The differing tax laws may require updates to your plan if you own assets in more than one state or move to another state.
Signing Requirements for Estate Planning Documents vary by State.
Some states, like MN, only require you to sign your powers of attorney and trusts in the presence of a notary. Other states, like FL, require that the documents be witnessed as well as notarized.
Homestead Laws Vary By State.
Florida has wonderful homestead protections. However, homestead can be lost if people are not careful. For example, a trust needs to have some specific language in it in order to maintain the homestead protection for any FL real estate transferred to the trust.
The Rules on Protecting Your Home and Life Savings From Long-Term Care and Nursing Home Costs Vary by State.
If you have worked with an attorney to protect your home and life savings from long-term care costs, or need to, you should be aware that the rules and requirements vary a great deal by state and what works in one state may not work in another.
For example, we work with a lot of clients that split their time between MN and FL. We carefully tailor their planning to not only avoid probate, but to minimize taxes and to help them protect their home and life savings in the event they were to need long-term care or nursing home while working within the VERY different rules of each state.
As you can see, whenever you move to a new state, or even if you are just purchasing a home or other assets in another state, it is a good idea to meet with an attorney to review your estate plan to make sure it will work for your family when it is needed.
If you would like to learn more about Why Your Existing Estate Plan (or lack of one) May Fail Just When Your Family Needs It Most, and How You Can Put a Plan in Place to Make it as Easy and Inexpensive as Possible For Your Family While Protecting Your Assets… I will be hosting a free, online masterclass, where I will be revealing what you need to know about powers of attorney, living wills, health care directives, wills vs. trust, tax minimization strategies, how to protect the assets you leave to your family in the event they get divorced or sued and much more, click here to register for the free msaterclass.
And if you’d like to learn how you can protect your home and life savings from long-term care and nursing home costs, download my free Guide, “Save My Home: How to Protect Your Home and Life Savings from Long-Term Care and Nursing Home Costs” by clicking here.
Or call us today at (763) 420-5087 in the Minnesota office or at (941) 909-4644 in the Florida office to schedule a consultation.