When it comes to stressful life events, researchers say that moving ranks right up there with death, birth, marriage, and divorce. Just how bad is moving? Although moving is definitely *not* worse than death, 38% of people said it was worse than breaking up with a significant other, according to a survey conducted by Move.org.
Moving out of state brings even more headaches. The latest Census data says that 28 million people moved in 2021 and that almost 5 million people moved from one state to another.
Yes reader, I can hear what you’re thinking right now: what's the point of this, that moving is hell and we all hate it but we’re still supposed to worry about our estate plan?
Well, yes, moving is terrible but you still need to review your estate planning documents. I know that it’s hard enough to keep track of all the things you have to do when you arrive in a new state - like get a new driver’s license, enroll the kids in a new school, change your car registration, find a place to live, change the address on all of your important accounts, and update your banking information. Unfortunately, you still need to review your will, trust, advance directive, power of attorney, and other documents to determine if they are still valid in your new state of residence. Although states generally recognize each other’s laws, the devil is in the details, and failing to update your documents can lead to heartache for your family down the road.
But it’s not all bad news. FastWill was designed for moments like this, when you’re busy moving to a new state and just need to update your legal documents without finding a new lawyer and shelling out thousands of dollars.
Reasons to Update a Will, Trust, and Power of Attorney When Moving to a New State
Here are some reasons why a person may want to update their will or create a codicil when moving to a new state:
1. Differences in state laws: Each state has its own laws governing wills, trusts, and estates. Moving to a new state could affect the validity or enforceability of certain provisions in the will. Updating the will or creating a codicil can help ensure that the document is in compliance with the laws of the new state. A codicil is simply a legal document that changes your will without re-doing the whole will. Some states have weird rules about codicils, but FastWill can make sure that if you need a codicil, you follow the rules.
2. Changes in personal circumstances: When people are moving to a new state it’s often for reasons that could also impact a will, trust, and other legal documents. You might have gotten married, had a child, gone through a breakup, or received a promotion. If any of these changes impact how you want your estate handled, then you should update or redo your will and trust documents.
3. Changes in beneficiaries: When you move out of state, this can reflect a change in your relationship with your beneficiaries. For example, if you went through a divorce, then it’s important to change your will immediately. If you had a child, or your child reached the age of majority, you may need to add or remove a beneficiary from the will, change the percentage of assets that each beneficiary will receive, or add a trust.
4. Appointing a new executor or trustee: Not every state permits out-of-state trustees or executors. If a person has moved to a new state, it may be necessary to appoint a new executor or trustee who is a resident of that state. This can help ensure that the estate is administered more efficiently and effectively.
Consider Whether You Might Need Probate in Multiple States
When you own property in one state and then acquire property in another state, this creates a complication for your estate plan. When you die, your executor will have to probate your estate in your state of residence. But if you still had assets in another state, the executor may have to open probate in those states as well. This is called “ancillary probate” and it will cost time and money. To avoid this situation, you should review your documents when you move. You might be able to avoid probate by retitling your assets to transfer on death (TOD). Other options include making your accounts payable on death, which means they’ll avoid probate, or titling real estate to joint ownership, or transferring assets into a trust.
Review Your New State’s Marital Property Laws
Nine states plus Alaska (as an opt-in state) are still community property states, which means that all assets acquired during a marriage are equally owned by both spouses. The rest of the states are common law regimes, which treats property as individually owned by each spouse. When you move, this could shift the balance of the marital property.
FastWill can help you sort through the options. For example, if you move to a community property state, it might be advantageous to have joint revocable trusts for your marital assets. For more information, check out our blog articles about community property states.
Don’t Overlook Medical Documents
Healthcare directives aren’t as portable as you might think. Advanced directives, powers of attorney, and other medical directives are not uniform for all 50 states. Some people use the Five Wishes document that is accepted by most states, but there are serious disadvantages to the Five Wishes, which you can read about in more detail in FastWill’s summary.
Before the advent of AI, it was complicated and expensive to update one’s medical directives every time they changed jurisdictions. But this is one of the great reasons to use the power of AI that FastWill provides - we can help you create new healthcare directives at just a fraction of the cost of working with an attorney. Making new documents also gives you the opportunity to reassess what your wishes really are and make any changes as you see fit.
