Moving to a new state can be overwhelming, to say the least. There are dozens of logistical details to coordinate and both short- and long-term plans to make. 

As you contemplate a big move, you’re likely asking yourself questions like: 

• Am I going to buy or rent? 
• How will the move impact my career or retirement plans? 
• What’s the most efficient way to haul all my belongings into another state?
• Where is the best pizza/coffee/tacos in town?

You know, the important stuff.

But amidst the flurry of changes, it’s easy to overlook how this big move impacts other long-term plans. We’re talking, of course, about estate planning. 

It’s easy to believe that once you’ve ticked it off of your list, it’s done forever. But if you’re moving across state lines, you’ll need to add revisiting and possibly revising your estate plan to your checklist.

How moving states affects your estate plan

Moving between states can have implications for your estate plan in two ways: in terms of taxes and the laws you must comply with.

Tax changes

Different states have their own rules when it comes to taxes. Some states have income tax regimes, some states have property tax regimes. Additionally, some states impose an estate tax on the overall value of your estate, while others may levy an inheritance tax on the beneficiaries who receive the assets. 

Real estate holdings may also be subject to a whole new set of regulations in your new home state, influencing their valuation and the taxes due upon your passing.

Further, some states have additional taxes on business earnings. 

Difference between state laws

Each state also has its own laws when it comes to estate plans. For instance, different states have different marital property laws that dictate how property is owned and divided, impacting everything from asset distribution to creditor claims.

There are two main systems:

• Community property states: In these states, all property acquired during the marriage is considered equally owned by both spouses, regardless of who earned it or whose name is on the title. This means that upon divorce or the death of one spouse, the property is divided equally. Only nine states are community property states—and that includes Texas.
• Common law states: Here, property ownership is determined by the name on the title. If there’s no title, ownership is determined by who purchased the property. If only one spouse’s name appears on the title, that spouse is considered the legal owner. Upon death or divorce, the property is distributed according to ownership, which may not always result in a 50/50 split.

Your new state may also have different: 

• Protections and exemptions for certain assets
• Laws for proper title transfer
• Probate processes and rules

These all can affect your vulnerability to creditors and how your estate plan is settled.

Documents to update when you move to a new state

While you’re packing boxes and forwarding mail (and hunting down the best pizzeria), you also need to update your estate planning documents. 

For many people, it’s better to update your estate plan before you move. This allows you to proactively account for the estate planning impacts of the move and put a documented strategy into place before making a major life change. However, we understand that moving is a big task, and something like this can easily fall to the wayside. If you can’t or don’t get to it before moving, then update it at your earliest ability. 

What specifically should you update? There are a few key documents you’ll need to evaluate. 

Wills

Beyond adjusting for state-specific legal nuances in how your assets get distributed, you need to make sure your estate’s executor—the person you’ve designated to settle your estate—is still valid under your new state’s laws. 

In some cases, if your executor doesn’t live in the state where you own property, they may have to post a bond before acting on behalf of your estate. (Note: Texas falls into this category!)

Revocable trusts

Often called living trusts, revocable trusts are a popular and flexible estate planning tool. However, state laws can vary significantly regarding who can serve as a trustee and the protocols for transferring assets into the trust. 

Some states also have specific requirements on who must be notified about the trust or its assets and how they should be notified. 

With the help of an attorney, you can find out if you need to redo your trust, update the venue of your trust, or keep it the same. 

Powers of attorney

As you map out your new life in a different state, consider who will manage your affairs if you can’t do so yourself. This is where your power of attorney (POA) comes into play. 

While you don’t have to update your POA just because you move, now is a good time to review it. Make sure the wording aligns with any requirements for your new state. Additionally, consider whether your current POA is best suited to act on your behalf under these new circumstances. Some people prefer to have a POA who is in closer geographical proximity to them, while others may not be concerned with that. 

Health care directives

Your health care directives need careful attention when you move to a new state. While many states have provisions recognizing out-of-state directives, making sure your documents contain specific language about their validity and reference to applicable recognition laws can prevent potential hurdles during a health crisis.

You also need to consider appointing surrogate decision-makers. Choosing new agents who live nearby for your healthcare proxy and financial power of attorney ensures that they can act swiftly on your behalf during an emergency or health crisis. 

It’s best to sign all these documents in your new state to show that you intend to make the state your permanent home.

How a local estate planning attorney can help

Navigating the legal intricacies of updating or creating a new estate plan when you move can add more stress (and tasks to your to-do list) during a busy time. A local estate planning attorney can manage the changes for you while making sure they follow your new state’s laws. 

Here’s how your attorney can help:

• State-specific expertise: Up-to-date knowledge of changes in local laws and asset transfers.
• Tailored asset protection strategies: Homestead exemptions, state-specific tax advantages, and optimizing your estate for local creditor protection laws.
• Guidance on local tax implications: Minimizing potential tax liabilities, inheritance tax, and advice on the most tax-efficient ways to structure your estate.
• Assistance with real estate transactions: Correct titling of your property and local property tax exemptions.
• Coordinating with other professionals: Working together with real estate agents, tax advisors, and financial planners to make sure your assets are transferred and managed according to your wishes and the local law. They can also collaborate with local estate planning attorneys to ensure your documents can hold legal water.
• Streamlining processes: Navigating probate court, managing real estate transfers, and updating documents.

Get help with your Texas estate plan from experienced estate planning attorneys

If you’re moving to Texas and need help updating or starting your estate plan, the experienced estate planning attorneys at the law firm of Shann M. Chaudhry Esq., Attorney at Law PLLC, are here to help! We care deeply about helping you protect the things that matter most to you. 

Contact our offices to schedule an affordable consultation and see how we can help you create and manage your Texas estate plan.