Many people retire in the snowy north and head to the warm south for a few months each year. If that is your scenario, it would be wise to keep that estate plan current because state laws are not usually the same and your plan needs to take that into account, according to The Indiana Lawyer in “Multi-jurisdictional estate planning requires research, collaboration.”
This multi-state thinking applies to anyone with property in more than one state—or country. How then would their assets be administered after death, if they are spread out across the country or around the globe?
The process sounds simple but it’s not. Under these circumstances, your estate planning attorney needs to understand and advise you about the laws governing each of the jurisdictions where you have assets. It requires extensive research and may need the help of attorneys in each state/country working together. If the cost is a concern, understand that the cost of doing this after death will likely be even higher.
The first step is to identify the assets and where they are located and then determine where the client maintains his/her legal residence.
People often have property in a multiple states, as well as bank accounts in a few states. Tangible assets, such as real estate, and intangible assets, such as bank accounts, are treated differently under estate planning law.
Tangible assets are typically governed by the law where the asset is owned, while intangibles are governed by the law where the owner is a permanent resident. One way to simply this process is to put all the assets into a revocable trust, which avoids probate and helps the client avoid multiple ancillary estates.
However, estate planning attorneys will need to know the law of other states or countries to help their clients make the right decisions about their assets.
Many states have probate laws with similar general principles. However, the details are different. One example: a trust that was properly executed in Indiana was ineffective under Florida law because it lacked sufficient witness signatures. It was a small detail, but one that made all the difference.
The problem becomes even more complex when the person has assets in foreign countries. In some countries, forced heirship will actually prohibit citizens from dictating where their assets go after death. In these countries, a certain percentage of a citizen’s assets must go to their children, spouse, etc. And some countries don’t recognize the concept of a trust, so creating a revocable trust to avoid ancillary estates won’t work.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include multiple states and/or countries.
Reference: The Indiana Lawyer (Oct. 17, 2018) “Multi-jurisdictional estate planning requires research, collaboration”