If you recently moved to Arizona or plan to move here in the near future, an important item may be missing from your to-do list. Since you’re changing your state of legal residence, it’s essential to make certain that your estate plan complies with applicable Arizona laws, as well as recent changes in federal laws. While you may not need to create an entirely new estate plan, you likely need to make some important changes to accommodate the differences in state laws that on estates and trusts. There are several specific concerns that you may need to address.
Choosing the executor to serve as the personal representative for your estate is an important component of your estate plan. Since state laws govern who can serve, it’s essential to review your choice of executor when you move, to ensure that the person you designate in your last will and testament is eligible to serve in Arizona.
While Arizona law does permit a person residing out of state to serve as the personal representative of an estate, it does not permit an out of state corporation to serve as executor. However, if the individual you name as executor resides in a state other than Arizona, you may want to consider naming someone who lives locally for practical reasons, such as sharing copies of documents and confidentially discussing your estate plan. In addition, the personal representative often needs to be present to handle day-to-day affairs of an estate for an extended period, so an executor who lives far away may not be the best choice for that reason.
Each state has its own laws governing durable powers of attorney for financial matters and health care decisions. While POAs created under the laws of a state other than Arizona may be valid after you move, your agent may encounter problems using a power of attorney that doesn’t not conform with Arizona laws on its face. Financial institutions and medical professionals may be reluctant to act on an out-of-state document. Issues relating to the validity of your POA documents can arise when every minute of time is important to your well-being.
In addition, you may need different documents after you move. Arizona law requires a durable mental health care power of attorney that is separate from your durable health care (or medical) power of attorney. That requirement may be different from the law in the state where you previously resided. Arizona also recognizes living wills for end-of-life care, which some states do not. You may wish to add a living will to your estate plan after you move.
Changing your residence is one of the 10 most important reasons to update your estate plan. Although a will or trust created when you lived in another state probably is also valid in Arizona, a change your state of residence necessitates establishing domicile in your new state. Revisions to your will or trust may be part of accomplishing that goal. Additional revisions may be appropriate due to asset and liability changes that occurred because of your move, such as real estate ownership.
Moving to a new state provides a perfect opportunity to review your estate plan to make certain that it still accomplishes your goals and reflects your present circumstances. Other changes in your situation that occurred over time may warrant adjusting your estate plan, even if you don’t realize that is the case.
Creating or updating an estate plan should always include reviewing the title documents for property in which you have an interest, as well as beneficiary designations in assets like retirement accounts and life insurance policies. Differences in state laws governing property ownership may necessitate making revisions in your title documents or estate plan to accommodate Arizona laws. Recent changes in federal laws also may require changes in your estate plan and beneficiary designations.
If you own an IRA or 401(k) account, new tax laws that went into effect in 2020 may significantly affect distribution of those assets to your beneficiary. In addition, major federal estate and gift tax law changes that took effect in 2018 may impact your estate plan. If you haven’t reviewed your plan recently, it’s essential to do so at the soonest opportunity, whether or not you just moved to Arizona, to take these tax law changes into account in your estate plan.
State tax law also may affect your estate plan. Arizona does not have estate or inheritance taxes. Depending on the state tax laws in your previous state of residence, your estate plan may need changes relating to state taxation as well.
You should update your estate plan as soon as possible when you move, to prevent unexpected problems from arising. Counting on a knowledgeable lawyer is the only surefire way to make certain that your estate plan addresses all the issues resulting from changing the state of your legal residence.
At Peterson Law Offices, estate planning is a focus of our practice. If you recently moved to Arizona, we can review your existing estate plan to ensure that it complies with state laws and recent changes in federal law. Our practice includes real estate law and business law, so we can address concerns you may have about how Arizona laws affect those aspects of your life as well.
We provide top-quality services at affordable prices and welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. We invite you to schedule a free initial consultation by calling 480-878-5998 or using our online contact form.
© 2021 Peterson Law Offices, PLLC