Leave the Snow Behind but Keep Estate Plan Up to Date

State laws oversee estates and those laws are rarely the same.

Many people retire in the snowy north and head to the warm south for a few months each year. If that is your scenario, it would be wise to keep that estate plan current because state laws are not usually the same and your plan needs to take that into account, according to The Indiana Lawyer in “Multi-jurisdictional estate planning requires research, collaboration.”

This multi-state thinking applies to anyone with property in more than one state—or countries. How then can they figure out how to administer their assets after death, if they are spread out across the country or around the globe?

The process sounds simple but it’s not. Their estate planning attorney needs to understand and advise them about the laws governing each of the jurisdictions where they have assets. It requires extensive research and may need the help of other attorneys working together. If the cost is a concern, understand that the cost of doing this after death will likely become far more complex and costlier.

The first step is to identify the assets and where they are located and then determine where the client maintains legal residence.

People often have property in a few states, as well as bank accounts in a few states. Tangible assets, such as real estate, and intangible assets, such as bank accounts, are treated differently in estate planning law.

Tangible assets are typically governed by the law where the asset is owned, while intangibles are governed by the law of where the client resides. One way to simply this process is to put all the assets into a revocable trust, which avoids probate and helps client avoid multiple ancillary estates.

However, estate attorneys will need to know the estate law of other locations to help their clients make the right decisions for their assets.

Many states have probate laws with similar general principles. However, the details are different. One example: a trust that was properly executed in Indiana was ineffective under Florida law, because of the lack of sufficient witness signatures. It was a small detail, but one that made all the difference.

The problem becomes even more complex, when the person has assets in foreign countries. In some countries, forced heirship will actually prohibit citizens from dictating where their assets go after death. In these countries, a certain percentage of a citizen’s assets must go to their children, spouse, etc. And some countries don’t recognize the concept of a trust, so creating a revocable trust to avoid ancillary estates won’t work.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include multiple states.

ReferenceThe Indiana Lawyer (Oct. 17, 2018) “Multi-jurisdictional estate planning requires research, collaboration”