Downs Law Firm, P.C.


Take a Fresh Look at Estate Plan If You Relocate

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An estate planning attorney in your new state of residence should go over your estate plan.

We have noticed a distinct trend: Many people are choosing to leave Maryland and to relocate for retirement and often relocate to a warm, sunny state. The weather an retirement friendly tax environments make this easy to understand.

If you decide to relocate, it would be a good idea to have an estate planning attorney review your estate plan, according to TC Palm in “Should new Florida residents update their out-of-state estate planning documents?”

An example of why it’s a good idea to have an estate plan review is that in the State of Florida, as long as your will from another state is valid under that state’s law, it will be honored in Florida. That is generally true.

However, there may be laws in Florida that could cause some problems with the out-of-state will. That applies to other states as well.

Here’s a good example. Let’s say you now own a home–known in Florida as a “homestead”—and your out-of-state will transfers your residence at the time of your death to a trust for the benefit of your spouse and your children.

The only person who can receive a homestead in Florida is the spouse. If your will from out-of-state was used, the house would result in a life estate going to the spouse with a vested remainder to your children. This doesn’t achieve the result you wanted: to have the property controlled by a trustee and not your spouse and children. If this was a second marriage, the potential could be a family blow up, even litigation. Even in a first marriage, if the children and their mother differ on what should happen to the family homestead, there would be trouble ahead.

Taking that example further: What if your out-of-state will directs the sale of your home in Florida and the distribution of proceeds in equal shares to your children? If you die with creditor claims, you lose the homestead exemption for creditor protection purposes. Your children’s inheritances could then be at risk.

More food for thought: if your out-of-state will appoints a non-relative who is a resident of the state where your will was originally executed to serve as your personal representative, they won’t be able to do much in Florida. That’s because they are not eligible to serve as a personal representative under Florida law, which only allows a nonrelative to serve, if they are a Florida resident.

Maryland has its own unique rules, including a 10% inheritance tax for assets left to people who do not qualify as close relatives, such as nephews and nieces.

Every state has its own laws, and while some issues are fairly consistent from state-to-state, that is not always the case. To take advantage of the laws in your new home state, an plan review should be done.

If you decide to relocate it would be a good idea to meet with an estate planning attorney, in case your current plan has some areas that should be updated to meet any new state laws.

Reference: TC Palm (Nov. 14, 2018) “Should new Florida residents update their out-of-state estate planning documents?”