Author: Denise A. Martin
I am routinely asked whether an estate plan needs to be updated when one moves to a different state. The answer I give is maybe not, but it is always worth having an attorney in the new jurisdiction review your estate plan. An estate plan that was properly drafted and executed in one state will be legally enforceable in another state. The validity of wills and trusts is controlled by the law of the jurisdiction where they were signed, and so those documents are enforceable in any state as long as they were properly drafted and executed under the law of the originating state. For other estate planning documents, such as powers of attorney and medical directives, the full faith and credit clause of the U.S. Constitution requires states to recognize such documents prepared validly in other states. So if you prepare and sign an estate plan in Maryland but later move to Florida, you do not necessarily need to have a completely new estate plan prepared. That being said, a big life change, such as moving to a different state, provides an excellent opportunity to review your estate plan.
Estate plans should be reviewed after major life changes, as well as every five or so years; changes in state or federal law and the birth, death, or marriage, etc., of close family members or friends may result in your estate plan becoming out-of-date. Tax laws, including state “death taxes” like estate tax and inheritance tax, also vary from state to state, such that an estate plan in one state may result in no tax being owed upon the death of the individual but that individual’s passing in another state could have numerous, significant tax consequences. For example, Maryland has both an estate tax (levied on estates of a certain dollar value) and an inheritance tax (levied on bequests made to distant family members or non-family members), while Virginia has neither; so your loved ones may be subject to the imposition of a significantly greater tax burden if you pass away while living in one state compared to another.
Another reason why a move out-of-state provides a good reason to review your estate plan is that while certain estate planning documents may be legally enforceable in a new state, the function of actually using those documents may be difficult enough that it is worth updating them. For example, many states have statutory powers of attorney and medical directives; i.e., the state legislature codified into law a standard form power of attorney and/or medical directive that is legally required to be accepted throughout the state. Where a state has such statutory forms, financial institutions and hospitals are used to seeing the statutory form and will generally be apt to accept such forms without delay. However, if your agent appointed in your power of attorney or medical directive presents a statutory form from another state that may look quite different, there may be delays and headaches while the legal department of the institution reviews the form. So even though that document may ultimately be legally enforceable, it may make sense from an ease-of-use standpoint to just update the document.
In any case, if you think the substantive provisions of your estate plan need to be updated (e.g., the distribution scheme, who your trustee or personal representative is, who the agent in your power of attorney or medical directive is, etc.), then I definitely recommend you meet with an attorney sooner rather than later to have your plan reviewed!