Just like birds, cooler weather drives many people to head south. If this is in your plan this coming autumn or winter, there are a few things to consider before leaving. Not only do you need to ensure your family’s safety from COVID-19, but also that your estate planning documents are updated, valid, and enforceable.
What is Happening in Your Destination State?
We are currently in the midst of an international pandemic, and it tt would be prudeno do some research about your destination. How many active COVID-19 cases does the county have? Are these numbers trending upward? Upon your arrival, will the local or state government require that you quarantine for a period of time? Lastly, are there any additional local orders that you should be aware of? Before traveling, you should consider each of these points to ensure the your family’s safety.
Where Do You Consider Home?
Your state of domicile impacts your estate planning, family law matters, and taxes. Due to differences in state tests for determining residency, you can be considered a resident of more than one state; however, you can only be domiciled in one state. Although state laws differ as to determining domiciliary status, the common elements are that your domicile is where you permanently live and where you intend to remain or return.
Because you are spending time in two (or more) states, you should meet with your tax advisor to confirm that you are filing the appropriate tax returns and have a plan in place to maximize the potential differences in tax laws. For example, Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not have any personal income tax. You should also consider meeting with us to discuss the estate planning implications of owning properties in multiple states.
Review Your Estate Plan
Before traveling, review your estate planning documents. Life changes are common and sometimes occur without warning. Having an up-to-date estate plan helps ensure that your wishes are carried out during your lifetime and upon your death. The following questions can help determine if your documents still meet your needs:
- Who are your named fiduciaries (i.e., trustees, personal representatives, guardians for a minor child, and agents under a power of attorney)? Do you still want these individuals to act on your behalf, and are they still able to serve in that role?
- Are your named beneficiaries still alive? Are there any additional individuals or charities you would like to leave something to? Do you want to make any adjustments to the amount of an inheritance or the manner in which you are leaving an inheritance to a beneficiary?
- Have you retitled your accounts or updated any beneficiary designations life insurance or retirement accounts to match your estate plan?
- If you need to move for health reasons but cannot make the decision yourself, does you agent have the authority to relocate you to another state?
Additionally, you may require assistance with financial matters or transactions while you are away. For this reason, you should review your financial power of attorney to determine if it is springing or immediate. A springing power of attorney allows your agent to act only when you are unable to act on your own. This inability to act on your own is primarily determined by a physician, and sometimes by a judge. Meanwhile, an immediate power of attorney allows your chosen agent to act on your behalf right away.
Revocable Living Trusts
While reviewing your existing estate plan, you should evaluate whether it includes all the necessary documents. If you currently have a will-based estate plan, you might want to consider adding a revocable living trust. This is especially important if you own property in more than one state. Without a trust to consolidate ownership and administration, your loved ones may end up going through multiple probate administrations in different states. This can increase the time and cost of settling your affairs at your death.
Compliance of Estate Planning Documents in Multiple States
Estate planning laws are state specific and for certain documents, such as the financial power of attorney and healthcare directive, each state may have its own statutory forms. While one state may honor a document that was validly executed in another state, it will be faster for medical personnel to honor your wishes in an emergency if your instructions are in a familiar form. We suggest that you have an attorney licensed in your second state review your estate planning documents for compliance. If necessary, prepare a second financial power of attorney and healthcare directives.
As you prepare for your upcoming travel, please do not hesitate to give us a call. We are here to answer any questions and make sure you are properly protected.
Nielsen Law PLLC provides family focused estate planning to individuals and families in Austin, Round Rock, Cedar Park, and the Central Texas area. For more information and to learn more about our firm, please contact us.