Monday, November 17, 2014

How Does Moving Impact Your Financial and Estate Plan Health?

I'm moving. So moving (and packing, hauling, and unpacking) is on my mind. It occurred to me that many clients have questions about what moving means for their financial and estate plans. 

In the context of your estate plan, there are a few things to consider if you are moving. If you are moving to another state within the United States, your will is likely valid in that new state as long as it was validly executed in the initial state. This means that if you executed a will in Illinois that complied with all Illinois requirements, it is most likely still valid in Minnesota.

That being said, it is still important to consider the meaning of that will in the context of the laws of your new state. Your new state may have different estate tax laws, and therefore your plan may not be the most efficient under the laws of your new state. Your new state may subject your property to community property laws, so your estate plan may no longer be appropriate. Your current health care directives and powers of attorney may require a legal opinion before they are respected in the new state. Because these documents apply when you are alive, but incapacitated, waiting for a legal opinion may waste valuable time. Updating these documents upon moving to a new state is a good first step.

If you are moving to another country, there are a number of things in your financial and estate plans that probably need review and changes. First, the requirements for executing a will and other documents may be dramatically different.  For example, in Germany, many legal documents have to be executed in the presence of a notary public—who receives a percentage of your transaction cost as a fee, and has to read the legal document in a very loud voice before you execute it. Additionally, some countries have required heirship rules, especially for real property, so it may or may not be possible to transfer certain property to certain beneficiaries. Finally, it is important to understand the taxing impact the new country makes and whether you would be subject to that country’s estate tax system instead of, or along with, the United States.

Any move should trigger a review of your financial and estate plan health. Make sure you investigate the impact of your move, and ensure that all of the careful planning you have in place still works the way you intended.

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