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Do changes need to be made to a revocable trust when relocating?

When moving to a new state, many issues need to be taken into consideration. One of the issues that many people may fail to consider is whether changes need to be made to a revocable trust or other estate planning documents. Every state, including Massachusetts, has its own legal requirements for these documents, which may differ from the state an individual is either coming from or to which he or she is going.

In general, every state will recognize estate planning documents from another state. However, there could be differences that complicate matters for family members when an individual either becomes incapacitated or dies. A periodic review of an estate plan is always recommended, but when relocating to a new state, such a review takes on a new importance.

For instance, states may vary in the way documents need to be executed in order to be considered valid. Failing to comply with a new state's requirements could result in extra time and expense for family members. Further, not all states have their own estate tax, while others have an estate tax. This may necessitate changes to one or all of the documents that encompass an estate plan to ensure additional tax liability is not placed on heirs and beneficiaries.

Other than avoiding probate and controlling the distribution of assets, a revocable trust and other estate planning documents function to protect individuals from certain tax ramifications. It could create unnecessary and unwanted issues for family members if such a trust is not in compliance with state laws. Therefore, a new Massachusetts resident may benefit from consulting with someone familiar with our state laws to make sure his or her estate plan still achieves the goals it was meant to when first created.

Source: Forbes, "Moving To A New State: How To Put Down Financial Roots", Deborah L. Jacobs, March 19, 2014

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