Updating your estate plan may not be at the top of your to-do list when you move to a new state. Did you know, however, that different states have different rules when it comes to estate tax, inheritance laws, and medical care? It can be important to update your estate plan accordingly to help ensure it still accurately reflects your wishes. Let us review three key reasons why you need to update your estate plan if you moved to a new state.
1. Estate Tax Variances. Every state has its own tax code. This means that each state chooses whether or not to impose an estate tax and sets the rates depending on the size of estate. You may find that your estate would have been subject to a state level estate tax in your old state but that it is no longer an issue in your new home state, or vice versa.
2. Probate Rules. Every state also gets to make its own rules regarding what triggers an estate’s need to go through the formal probate process at the time of your death. Some states set the bar for probate as low as an estate size of $20,000, while others allow estates up to $150,000 to bypass the formal probate process. States can also differ as to whether owning real property that is to be passed on to your heirs will cause your estate to be probated.
3. Health Care Surrogate and Health Care Documents. Health care documents should be part of every estate plan. These documents can help ensure that your wishes are followed if you are no longer in a condition to be able to make your own medical decisions. Because these forms vary from state to state, even if the forms from your old state are technically valid in your new state, it can be a good idea to draw up forms that would be familiar to a physician treating you in your new home state so that they will not have any trouble interpreting the decisions you have made about how you want to be treated and who should be able to make decisions on your behalf.
For assistance updating your estate plan, our office is here to help. Please contact us to schedule an appointment.