If you want to ensure your assets are bequeathed as you wish upon your passing, it is impossible not to rely on a solid estate plan. Without a proper estate plan, one’s estate may be subject to several factors, such as taxes, probate, or even intestacy (dying without a will).
In this article, you will find out whether moving to another state affects one’s estate plan strategy.
Does Moving to Another State Affect Your Estate Planning? – The Verdict
In essence, a well-designed estate plan has two main purposes – preserve the maximum number of assets possible for an individual’s intended beneficiaries while guaranteeing flexibility before his or her death.
In US law, most legislation regulating the creation and administration of estate plans is at the state level. Depending on each state’s statutes, the legal requirements and rules for the creation of wills or trusts vary.
As long as it was properly executed, a will or trust valid in one state should be valid in all states. However, different laws can affect distinct aspects of an estate plan. For instance, some states allow an individual to disinherit a spouse, while other states do not.
The consequences of the lack of an estate plan also vary from state to state. When someone dies intestate (without a will), each state has different laws governing how courts may execute a deceased person’s estate.
If you have recently moved from one state to another, it is fundamental to consult with an estate planning attorney to identify whether the laws in the new state affect one’s plans.
Community Property States vs. Non-Community Property States
If an individual acquires property during his or her marriage in a common-law state, that property is not automatically owned by both spouses. If the spouse acquired any assets by himself or herself, the other spouse is not considered the co-owner (unless the owner chooses to share it).
While there is no community property, common law states have statutory rules to protect surviving spouses.
If someone lives in a community property state, all the property acquired by one of the spouses during marriage is automatically owned by both spouses. With few exceptions, both spouses own equal halves of property acquired after they were married.
In 2022, community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Florida is not a community property state.
When someone moves from a common law state to one of these states, the property they bring to the state is subject to community property law.
Conversely, if someone moves from a community property state to a common law state, each spouse retains a one-half interest in property acquired throughout their marriage while they were living in the previous state.
As each state has distinct statutory rules, moving from one state to another may directly affect what each spouse is considered to own at death. Consult with an expert attorney to identify how distinct state laws may affect inheritance rights, incapacity planning, and estate planning.