Should you Update your Estate Plan if you Move to a New State?

Moving to a new state might mean estate plan changes for legal reasons, but more likely because of your change in circumstances.

I recently had a discussion with a client regarding whether and how they should update their estate plan if they move to a new state.  That conversation comes up frequently, so I thought it would be a great topic for a blog article.

The U.S. Constitution requires states to give “full faith and credit” to the laws of other states. As a result, your will, trust, power of attorney, and health care proxy executed in one state should be honored in every other state.  However, even if they are “valid” in another state doesn’t mean they will work well under that state’s laws or that they will work as well in practice, as described in Wealth Advisor’s recent article entitled “Moving to a New State? Be Sure to Update Your Estate Plan.”

Your last will should still be legally valid in the new state. However, the new state may have different probate laws that make certain provisions of the will invalid or no longer ideal.  By way of example, Texas has a unique form of probate in which there is an independent executor.  This minimizes court involvement in the probate which is what most clients prefer.  We often revise wills of clients moving to Texas to authorize independent executors.  Similarly, other states might have other unique provisions that you would want to utilize in that state.

This can also happen with revocable trusts, however trusts tend to be more portable.  Once a trust is funded, you can change any provisions you need to ensure it works in that state and you can elect that state’s laws.  So, it might need to be updated, but often is more portability.

You may also want to update your estate plan if you move to a new state to change your powers of attorney and health care directives. These estate planning documents should be honored from state to state, but sometimes banks, medical professionals, and financial and health care institutions will refuse to accept the documents and forms.  Each state has very specific roles on how these are created and what they can accomplish, so it is typically advisable to create new ancillary documents based upon the law of the new state.

It is also helpful to keep in mind that it is practically important to redo ancillaries documents because lawyers and judges aren’t the ones reviewing them.  Court systems will know how a will or trust applies under that state’s law because lawyers are involved in the process.  Incapacity documents such as the power of attorney and health care directives are reviewed by non-legal professionals such as title companies, doctors, bankers or their support staffs.  So practically speaking, it is easier to give them what they expect to see as they won’t have the expertise to recognize whether an out of state document is valid.

You should also know that the execution requirements of your estate planning documents may be different, depending on the state.

For example, there are some states that require witnesses on durable powers of attorney, and others that do not. A state that requires witnesses may not allow a power of attorney without witnesses to be used to convey real estate, even though the document is perfectly valid in the state where it was drafted and signed.

When you move to a different state, it’s also a smart move to consult with an experienced estate planning attorney because interstate moves often mean another change in circumstances that would necessitate a change to the estate plan.  For example, the move might have been because of a change in income, marital state or to support a family member in ill health.  You can see here for other reasons to consider updating your estate plan at that point.  https://www.galliganmanning.com/when-to-update-your-estate-plan/

Moreover, there may be practical changes you want to make. For example, you may want to change your trustee or agent under a power of attorney based on which family members will be closer in proximity or to someone familiar with the new property.  This is also a good time to review trust funding as you will have new assets.

For all these reasons, when you move out of state it’s wise to have an experienced estate planning attorney in your new home state review your estate planning documents.

Reference: Wealth Advisor (Jan. 26, 2021) “Moving to a New State? Be Sure to Update Your Estate Plan”

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How to Become an Organ Donor

If you want to become an organ donor, you need to communicate your wishes.
If you want to become an organ donor, you need to communicate your wishes.

If you want to become an organ donor, you should communicate those wishes to the people who will carry them out.

Organ donation is one of the most regulated aspects of the healthcare industry, and the legalities of being an organ donor have very unique considerations. Essentially, organ donation is the physical transfer of the body parts of a person (the donor) to another person through surgical means. Organ donation can occur during the donor’s lifetime or at the organ donor’s death. Here we’re focusing primarily on the transfer of organs at the time of the organ donor’s death.

Although the need for organ donations is exceptionally high worldwide, the supply is often low. The lack of clearly communicated and documented consent by a potential organ donor is one of the most common challenges to organ donation. Despite an individual’s desire to donate organs, a failure to follow the right protocol can render the individual’s decision unenforceable.

What You Can Donate

Scientific advancements now allow for a single donor to donate organs to up to seventy-five donees. Organ donors can provide their kidneys, liver, heart, lungs, and pancreas. Donors can also donate tissue such as bone, skin, tendons, corneas, bone marrow, and stem cells. There are even instances where hands and feet have been successfully transferred. However, for many of these organs, the transfer must be initiated within twenty-four hours. Additionally, each potential donor must be evaluated on a singular basis with respect to the particular organ at issue.

Alternatively, some donors are interested in donating their entire body to scientific research. If you are interested in this route, you must be careful to avoid organ donation opportunities because scientific research requires complete bodies. In such instances, identifying the scientific institute you are interested in donating to and working with that institute directly is the best method. As you work with them, be careful to document your specific intent to donate your remains to science.

Making Your Wishes Known

There are a number of ways to make your wishes regarding organ donation known and increase the likelihood that they will be enforced. The most effective approach is a comprehensive one. This involves registration as a donor, legal planning, and communication of your wishes. The first and most important step is registering as an organ donor, which you can do in two ways: (1) find your state’s unique registry on www.organdonor.org and register online or (2) register at your local department of motor vehicles. In the latter scenario, your license will likely state that you are an organ donor.

The next step you can take is ensuring your wishes are recorded in your estate planning documents. An advance healthcare directive and living will are key documents that can include your end-of-life wishes. Finally, to ensure that your wishes are known, communicate them to your friends and family. These are the people who will end up intimately involved with your end-of-life decisions. Carefully select your healthcare agent and clearly communicate to that agent your desire to donate your organs.

It is important to note that the steps described above should not be taken in isolation. This is particularly true regarding your estate plan and communication of your wishes to friends and family. If there are conflicts between your plan and what family members think your wishes are, some states give greater weight to the documents memorializing your wishes. Your estate plan should contain your wishes, as well as information on any donor registrations you have made. Your documented wishes should then be expressed to those closest to you and who will carry out your wishes after you pass away.

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Estate Planning after Divorce

Divorce changes your estate plan, so make sure to update it and your beneficiary designations after the divorce.

Estate planning after divorce takes careful consideration.  Without a spouse as the center of an estate plan, the executors, trustees, guardians or agents under a power of attorney and health care proxies will have to be chosen from a more diverse pool of those that are connected to you.

Wealth Advisor’s recent article entitled “How to Revise Your Estate Plan After Divorce” explains that beneficiary forms tied to an IRA, 401(k), 403(b) and life insurance will need to be updated to show the dissolution of the marriage.

There are usually estate planning terms that are included in agreements created during the separation and divorce. These may call for the removal of both spouses from each other’s estate planning documents, assets, bank and retirement accounts. For example, in Texas, bequests to an ex-spouse in a will prepared during the marriage are voided after the divorce. Even though the old will is still valid, a new will has the benefit of realigning the estate assets with the intended recipients and avoiding difficulties in probating the will.

However, any trust created while married is treated differently. Revocable trusts can be revoked, and the assets held by those trusts can be part of the divorce. Irrevocable trusts involving marital property are less likely to be dissolved, and after the death of the grantor, distributions may be made to an ex-spouse as directed by the trust.

A big task in the post-divorce estate planning process is changing beneficiaries. Ask for change of beneficiary forms for all retirement accounts. Without a stipulation in the divorce decree ending their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy may still receive the proceeds at your death.  Sometimes beneficiary designations or retitling of assets occur during the divorce process, but often they occur after resolving the divorce and aren’t complete by the time an estate planning attorney needs to be involved.

Divorce makes children assume responsibility at an earlier age. Adult children in their 20s or early 30s typically assume the place of the ex-spouse as fiduciaries and health care proxies, as well as agents under powers of attorney, executors and trustees.  Many clients often try to coordinate their estate plans with their ex-spouses to ensure their mutual children are provided for.

If the divorcing parents have minor children, they must choose a guardian to care for the children, in the event that both parents pass away.  This was always true, but the need for it is heightened if parents aren’t on the same page.

Ask an experienced estate planning attorney to help you with the issues that are involved in estate planning after a divorce.

Reference: Wealth Advisor (July 7, 2020) “How to Revise Your Estate Plan After Divorce”

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