senior citizens having fun at the beach

Estate Planning for Snowbirds

Comedian Jerry Seinfeld once joked, “My parents didn’t want to move to Florida, but they turned sixty and that’s the law.” It’s funny because it seems like everyone becomes a snowbird once they retire. Thanks to old man winter here in Southeastern Massachusetts, a large number of retirees do flock like snowbirds to warmer states. Splitting time between two or more places you love is a much-desired retirement dream for many. If you split your time between two states, you must choose which state is your true home (also known as your “domicile”). This may be determined by the amount of time you spend in each, as well as other factors.

Laws Differ from State to State

All kinds of factors can influence this decision, such as the property laws of each state, your marital status and even tax rates. For example, Florida doesn’t have state estate taxes. This is great, but it does have other taxes that could come into play.

Non-tax considerations should also be considered. Do you have a chronic medical condition? Perhaps there are better specialists in one locale versus the other. If a crisis occurs will you have support in both places? For many, the answer is a clear “no.”

When you pass away, your estate can end up going through probate in both states. This can be time consuming and expensive, and you may be able to avoid it by working with an attorney to set up a trust or other planning vehicle, depending on the types of property owned. There are some estate planning documents you might want to consider for both states where you spend time. For example, it may be helpful to have health care proxies and powers of attorney drawn up in both states to avoid problems and delays.

What Do You Do When You Live In Two States?

Even if you “live” in both states, you are only officially domiciled in one. You are considered a visitor in the other state. An estate planning attorney can help get you up to speed and compare the laws of each state, either with someone on our team or co-counseling with an out-of-state attorney. The state of residence will have a lot to do with the documents you should obtain.  Most of our clients still consider themselves Massachusetts residents although they spend several months of the year in a warmer state.

Prepare in advance of heading south again to figure out your situation and put an advantageous plan in place. Too often, attorneys receive calls just a couple days before clients leave for their winter home, not allowing time to consider options and have a plan created.

Q & A

Question:   My spouse and I live in our home in Massachusetts in the summer and we spend the winter at our condo in Florida. We are looking to do estate planning and also prepare for if either of us need long term care in the future. Should I see an attorney in Massachusetts or Florida?

Answer:  The first issue is to determine whether you are a resident of Massachusetts or of the other state you are visiting. Some factors to determine residency include the amount of time spent in each state, your mailing address, what state your driver’s license is held, where your car is registered, where you are registered to vote, and where you file your income taxes.

Once you determine which State is your primary residence, there are other aspects to be considered regarding your estate plan. Snowbirds should consider where they plan on living in the future and where they think they will likely receive care. There may be a possibility that you move down south upon retirement but you plan to move back to Massachusetts to be with family members when you are in need of assistance. Since most clients do not have a plan set in stone, they should have estate planning documents, which may include Medicaid asset protection, that would cover them in either state.

Because the laws governing estate planning and Medicaid benefits differ from state to state, it is advisable that you have your documents reviewed by an attorney in both states to ensure that they comply with the laws in both places. Additional examples of differences in the law are for what we call Advance Directives, Health Care Proxy and Power of Attorney documents. Since these are state-specific laws, they often have different terminology which can be confusing when moving between locations. For a Health Care Proxy in Massachusetts the person named to make your medical decisions is called your “Agent.” In Florida the term for the agent acting as your Health Care Proxy is a “Surrogate.”  Whereas in Florida the term used under the law to name the default agent appointed is “Proxy.” This could cause unnecessary confusion and should be addressed by your estate planning attorney.

Some clients ask if they should have two sets of documents, one for each state.  While it is possible to have two sets of documents, there is a risk of conflict between them.  Therefore, most clients only have one set of estate planning documents.   Powers of Attorney can be used across state lines for most transactions.

If you have real estate that you purchased in a second state, you may want to consider a revocable living trust to deal with the settlement of your affairs in the non-resident state.  If you have real estate in Florida, you may want to consider a revocable living trust to avoid probate in Florida if you pass there.  If you don’t have such a document, your family will need to retain an attorney in Florida to handle the probate process with regard to the property in Florida.  This can be a time consuming and expensive process that could be easily avoided with a revocable living trust.

Lastly, make sure you have multiple originals or at least copies of your Healthcare Proxy and Powers of Attorney that you can take with you when you travel.  There could be a crisis that occurs as you travel from state to state, requiring the use of those documents.   Having these documents with you, along with contact information for your agents, will allow the hospital or other medical provider to contact your agents when a decision about your care or finances needs to be made.

As you can see, being a snowbird does require a bit more leg work on your part but once you have these important documents properly in place you can start to live out your retirement with peace of mind!