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Friday, August 19, 2016
Approaching Estate Planning When You Live in More than One State
Summary: Having a living situation where you have more than one place (and state) that you call "home" can create complexities and risks when it comes to distributing your assets, especially your real estate, when you die. Owning property in multiple states may mean multiple probates, and the risk of larger costs and longer delays. A revocable living trust can help avoid this risk. With a properly funded trust, you may be able to avoid probate in all of the states where you own property.
Many people, regardless of how many residences they own, have one specific place they think of as "home." For some people, though, the answer to the question, "Where is home?" is a bit more complicated. Whether it is due to the nature of their work, or simply a preferred retirement lifestyle that embraces warm southern winters and cooler northern summers, some people have two places both of which they consider to be home. If you find yourself in that situation, getting a proper estate plan is very important in order to avoid some the pitfalls associated with probate law.
Say, for example, you have two homes: one in Michigan and one on Gulf of Mexico in Texas. You spend a significant amount of time each year living in each of these places. In that situation, how should you approach estate planning? First off, you should pursue getting a plan without delay! Next, you may be wondering, "Do I need Texas documents or Michigan documents?" The answer to that question is, "It depends." For your will and living trust, your documents should be from the state where your legal residence is located. The law considers your legal residence to be the place where you spend a substantial amount of time and where you intend to have residency. You can show your intent by various actions, such as getting a driver's license, titling and registering your vehicle(s) or registering to vote.
Regardless of what state your documents come from, you'll want to give serious consideration to creating a living trust. If you do not, your estate may have to go through multiple probates. Continuing with the previous Michigan-and-Texas example, let's say that your state of legal residence is Texas. That means that you would need a Texas will. But Texas law does not permit a Texas estate executor to deal with real estate in anyplace except Texas. As a result, your will would need to go through what's called "ancillary probate" in Michigan. Even with newer probate laws that streamline the process in many states, the costs and delays associated with going through multiple probate administrations have the potential to really mount up.
Creating and funding a living trust can avoid such pitfalls. You can establish a trust and fund both of your residences into it, and neither would need to go through probate when you die. If all the assets you own in one state are funded into your trust (or structured in other non-probate ownership vehicles,) then your estate would not have to go through probate at all in that state. If this is true in both states, then you'd successfully avoid probate entirely in both places.
Other estate planning documents, such as powers of attorney, are a little different. The law allows you to have multiple powers of attorney in effect at the same time -- your documents simply must state that neither one revokes the other and that the pair work in tandem with each other. You should ask your attorney about the possible benefits of having both Michigan powers of attorney and Texas powers in order to make certain that the wishes you've established in your plan will be carried out without complication.
This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.
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