Wednesday, January 20, 2010

Are you moving? Don't forget to pack your estate plan... or should you?

One question people ask me when getting ready to set up their estate plan (trust(s), wills, powers of attorney, etc) is what happens if they move. It is really a good question.

States typically have different laws. Some states in the U.S. have adopted (either in its entirety or with some modifications) what is known as the "Uniform Probate Code" which basically means they all have the same laws with respect to wills, trusts, probates, etc. California is not one of them. But don't despair, this does not necessarily mean that if you move out of California (or have just moved to CA) you will have to start all over again with your estate plan documents.

A trust is esentially a contract, and contracts that are deemed valid in the state and at the time in which they were created, are enforceable in other states. So your trust for example, is still a valid document if you move out of the State. Wills are also treated the same. However, the real issue is that a trust is used to hold property by a trustee for the benefit of the beneficiaries.... so if you move, what property is the trust protecting now? If you no longer hold any assets in California, what you really need to do is to update your trust to ensure it holds all of your newly acquired assets and reflects the disposal of previously held assets.

It would also be advisable to check with an attorney in your new home state to see if any amendments are required to provide you with further protection in that state. For example, one state may have different STATE inheritance taxes than another and therefore added protections may need to be included in your trust.

Additionally, you may have named someone as a successor trustee/executor in your original trusts/wills and now they live 3000 miles away and the reality of it, is that it may no longer be a practical choice. In this case, amendments will need to be made to re-name a new successor trustee/executor.

Then there is the question of your Powers of Attorney both for your finances and for your health care. As mentioned above, the person you have previously named may logistically no longer be the best choice for your agent(s). For example, say your brother is named as your health care agent and lives back in California and you now live in Texas. You get in a terrible car accident and are in a coma and your leg is severly injured and may need to be amputated right away to save your life. Your brother can not get to you in time to be able to tell the doctors that, because you are a professional dancer and it is your passion above everything else in the world, you would rather risk your life than lose a leg, so with no agent available to act on your behalf, they chose to ampute.

And what about your children? In your will, you are able to name someone who will be their guardians if both parents die. If you really start to get settled in your new hometown, do you want your children to have to move to live with who had named as guardians? Maybe, maybe not. It is just one more thing to consider when you move and decide what part of your estate plan documents needs updating.

In many instances, a few simple updates are sufficient. Sometimes it may be easier (but yes, a bit more costly) to do what is called a "restated amendment" to your original trust. This is basically like starting from scratch but keeping the original name and date of your first trust so that all of your assets do not need to be retitled again.

For additional questions about what to do with your estate plan if you move, call Amy Alvis at the law offices of Alvis Frantz and Associates at 925-516-1617 or email us at