If You’re Moving to a New State Be Sure to Update Your Estate Plan
The aftermath of Covid continues to fuel a booming housing market nationally as well as locally here Massachusetts and especially on Cape Cod. The median home price on the Cape has risen in 2020 from approximately $350,000 to over $500,000 in 2021. Local real estate and businesses presume to see a ‘ripple effect’ between the combination of rising home prices and the percolating summer season. Where there’s home sales, there’s moving. And if you’re moving then it’s a good time to update your estate plan.
While legally you may not need all-new estate planning documents if you move to a different state, you should have your documents reviewed by a local attorney in your new home.
The Constitution of the United States requires that states give “full faith and credit” to the laws of other states. This means that your will, trust, durable power of attorney, and health care proxy executed in one state should be honored in every other state. While that’s the law, the practical realties are different and depend on the document.
Your will should still be valid in the new state, but there may be differences in the new state’s laws that make certain provisions of the will invalid. The same is true of revocable trusts.
This is less true of durable powers of attorney and health care directives. While they should be honored from state to state, sometimes banks, medical professionals, and financial and health care institutions don’t accept documents and forms with which they are not familiar. In addition, the execution requirements may be different depending on the state. Some states require witnesses on durable powers of attorney and others don’t. A state requiring witnesses may not allow a power of attorney without them to be used to convey real estate even though the document is perfectly valid in the state in which it was executed. In the case of health care proxies, other states may use different terms for the document, such as “durable power of attorney for health care” or “advance directive.” (And the people reviewing your power of attorney or health care proxy may not be well versed in constitutional law.)
Moving is a good excuse to consult an attorney to make sure your estate plan in general is up to date. Other changes in circumstances such as a change in income or marital status can also affect your estate plan. In addition, there may be practical changes you will want to make. For example, you may want to change your trustee or agent under a power of attorney based on which family members are closer in proximity.