In general, yes. It’s wise to update your estate plan after every major life event.
For this reason, you should at least review your estate plan every time you move to a new state, get married, have children, or experience a comparable life event.
Often, you may find that you’ll have to revise your estate plan to match the rules and guidelines for your new state.
In this article, we’ll cover the basics of what you need to know about estate planning laws when moving to a different state.
However, you must speak with an attorney before making any changes to your estate planning documents.
Only an experienced attorney can advise you on the best course of action for your particular case.
Major Life Events and Estate Plans: What You Need to Know
Whether or not you need to update your estate plan is a decision you’ll need to make with the assistance of an attorney or financial advisor.
However, it’s always advisable to at least review your estate plan after every major life event.
In general, all of the following may necessitate changes to your estate plan:
- You move out of your current state or to a different zip code;
- Your spouse dies;
- You marry;
- Your marriage ends through divorce or annulment;
- You or your spouse stop working or reduce your hours to the point that your income is significantly affected;
- You or your spouse experiences the loss of an income-producing property through means such as a natural disaster, arson, fraud, or theft (i.e. not due to sale or transfer of property);
- You or your spouse experiences a scheduled cessation, termination, or reorganization of an employer’s pension plan;
- You have a baby or adopt a child;
- You become a U.S. citizen or the citizen of another country;
- You are incarcerated;
- And much, much more.
Further, only an attorney or experienced financial advisor will know all the nuances and different laws that will apply to your case.
For example, while your will and other documents may remain valid after you move to a new state, they may also become weaker due to differences in local and state laws.
Since each state has enacted different laws for how to divide a person’s estate after they die, your Virginia estate may be impacted by the state law where you now reside.
Because of this, you should take steps to amend your estate planning documents so they align nicely with your new state’s laws.
Estate Plan Considerations: 6 Steps You May Need to Take when Moving Out of State
As we mentioned above, you should always review your estate plan whenever you experience a major life event.
For this reason, it’s highly recommended that you look over your estate planning documents with an attorney when you move to a new state.
We’ll list six of the most important considerations you should know about below.
However, please remember that only an attorney or financial professional who has reviewed your documents in full can tell you whether you should make any changes to your estate plan.
1. Update Contact Information
As a simple but important first step, it’s usually wise for you to review and update all of the contact information entries on your estate planning documents (and accounts) as soon as you finish your move.
While this may seem like a simple update, it’s also crucial from an organizational perspective, and can help you mitigate issues down the line.
You may also want to retain an attorney in your new state in case you experience any complications while updating your contact information.
2. Manage Differences in Estate Laws
While some of the differences in estate law between states may seem trivial or something that only an attorney would care about (such as the exact method of forming a trust or writing a will), others can be much more substantive.
Many states, for example, require that spouses inherit a minimum share of the estate after an individual’s passing, and this minimum can vary widely from state to state.
Similarly, some states have various inheritance and estate taxes, while others impose no taxes at all.
These laws can vary on other elements of your estate plan as well, such as who (and how) you can assign your power of attorney, whether or not certain forms of wills remain valid, and more.
Put simply, each state does estate laws differently, so you must speak with an attorney about whether or not your Virginia-based estate plan is still legally strong in your new state.
3. Manage Differences in Property Laws (Community vs. Common Law)
Moving from a common law state to a community property state, or vice versa, can also cause some serious problems.
In a common law state (such as Virginia), each spouse may be able to own property individually.
For example, a spouse may be able to keep certain assets “separate” from their spouse, provided these assets meet specific guidelines.
However, in a community law state, all property acquired during a marriage is considered community property, and is thus owned jointly by both spouses.
In the contexts of estate law, these rules may have an effect on how your property is distributed after your death.
For example, some states have varying rules about when co-owned property may pass to the surviving owner.
For this reason, it is essential to amend your will, trusts, and other aspects of your estate plan accordingly.
4. Deal with Changes in Affections and Relationships
We mentioned above that you should change your estate plan after every major life event, such as when you move, get married, or have children.
However, it’s worth noting that these major life events can have an effect on your affections and relationships in addition to your finances and estate plan.
These effects can be positive, such as if you move to a different state to be closer to your grandchildren, or negative, such as if you move to a different state and lose contact with close friends and family.
In either event, it’s wise to revise your estate planning documents to name (or un-name) family members and friends as your relationships with these individuals change.
5. Manage New Assets and Liabilities
Moving to another state generally means moving all your property from one place to another.
For this reason, people will often choose to either throw away old things or purchase new items to help them settle in to their new home.
Whether you’re purchasing a new house, selling old property, or just changing up the furniture in your living room, it’s smart to review how this new property fits in to your overall estate plan.
For example, you may want to update your will to account for a new home in your new state. Similarly, you may want to place other property or assets into a trust so your estate plan is easier to manage.
Whatever you decide, it’s smart to take account of any new assets or liabilities you gain as a result of your move.
6. Review Your Documents with an Attorney to Make Other Changes
Now that you are in a different state, you may need to update other aspects of your estate plan.
Retirement plans, beneficiaries, trustees, executors, and other aspects of a total estate plan play no longer be relevant now that you’ve relocated.
Your trustees or executors may not live nearby anymore, or you may have changed jobs and need to update your retirement plan or other aspects of your new job.
By reviewing your estate plan with an attorney, you can ensure that nothing is missed, and you can also make updates as needed.
Generally speaking, you should update your estate plan after every major life event.
While your estate plan will probably still be valid even after you move to a different state, it’s still wise to consult with a local attorney just to double check.
If you know you may be moving to a different state before making an estate plan, then it’s worth mentioning to your attorney at the time. It can impact advice.
Especially in scenarios such as the seven we listed above, it’s important for you to update your plan to match the laws and guidelines of your new home.
To make the most effective decisions, and potential changes, to your estate plan you should review it with an attorney after you move.
The whole point of an estate plan is to better protect your estate – assets, yourself, beneficiaries.
Sometimes, the best idea is to get a new set of documents that clearly meet your new state’s legal requirements.
Regardless of your reasons, it’s always smart to at least review your estate plan, preferably with an attorney, as soon as possible after your move.
Only an experienced local attorney can tell you whether or not your estate plan will hold up in the laws of your new home.