Did you take a chance offered by remote work during the pandemic to move to another state? Many did. Now that the dust has settled and you are comfortable in your new home, it may be time to update your estate planning documents if you have decided to make your move permanent. Let us review three key reasons to update your estate plan if you moved to another state.
1. You Need to Establish Your Domicile. Establishing your domicile can be important for many different tax-related purposes. The state where you are domiciled may determine whether and where you are subject to state income tax, state capital gains tax rates, and estate tax. Many states litigated this matter during the pandemic when remote workers crossed state borders to live and work elsewhere if they did not have to commute to a major city. The last thing you want may be to find that two or more different states are trying to tax you! Since determining your domicile is based on all types of steps you have taken to establish residence in your new state, updating your old estate planning documents or executing new ones in your new state can be a good way to establish your domicile, in addition to logging your time spent there, registering to vote and drive, and using your new address for all legal purposes.
2. You Want to Avoid Double Taxation. As noted above in the discussion of domicile, it can be important to establish one to avoid being taxed by multiple states. Be aware that if you move from a high-income-tax state to a lower tax state, or a state that has no income tax at all, then your old state may try to collect anyway, and you may have to prove you have really moved away for good. Making sure that your estate planning documents reflect your intention to reside permanently in your new state can be a great way to shore up your case.
3. Timely Updates Are Always Necessary. Life can change in a heartbeat. Even if yours is not that dramatic, it is still likely that it changes enough year by year that regular updating of your estate plan would be a good idea even if you had not moved. So, why not take this opportunity to update your estate plan now? There may be no time like the present.
For more information on updating your estate plan after a move, please reach out to our office to schedule an appointment.