Do I need to re-do my estate plan if I move from one state to another?

I would like to provide a simple yes or no answer, but, once again, the only correct answer is, “it just depends.”

First the good news: In most cases people moving to (or from) Hawaii do not need to redo their estate plans.  The bad news: There are many possible exceptions.

The underlying reason why a move from one state to another can require adjustments to an existing estate plan—or, in rare instances, a complete overhaul—is that trust and estate laws are found in state statutes and state court decisions, and these can vary considerably from state to state.

It’s usually a good idea to revisit your estate plan when contemplating or experiencing a major life event, such as marriage or divorce, the birth or adoption of a child, a life-threatening health condition, or major business decision.  A recent move to (or from) Hawaii would magnify the importance of such a review.

Several examples: In some states a divorce or new marriage negates an existing will completely, but not in other states.  Laws also vary with respect to apportionment laws that can determine which of your beneficiaries will have to bear the burden of any death taxes. 

A person should probably reconsider if an out-of-state bank is slated someday to be an executor or successor trustee.  Dealing with a corporate trustee that is thousands of miles away could unnecessarily complicate things at a time that is already difficult for your surviving loved ones.

Income and death tax issues can also come into play.  In some cases a move to Hawaii can jeopardize potential benefits, such as the illogically good income tax consequences of owning marital assets in the form of community property.  That’s why married couples moving to Hawaii from a community property jurisdiction may be well-advised to take the extra steps needed to preserve the potentially huge benefits of a “double step-up” in tax basis.  

Sometimes a move opens up planning opportunities that were not possible prior to the move.  A person moving to Hawaii, for example, may never have given thought to setting up a pet trust.  Many people like the idea of ensuring the care of a loved pet that might survive them.

A new resident to Hawaii might also be interested in protecting assets from future creditors by using a Permitted Transfers Trust to which the infamous Rule Against Perpetuities need not apply.  Hawaii is one of only a handful of states that provide such possibilities.

As always, I must add that this column does not contain legal advice, and that you should not rely on any of the above information to determine what is in your own best interest. 


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