Texans who have retired will often want to travel to different areas and spend significant time in other states. A question that should be considered is how this might affect an estate plan. Those who have the means to have several residences are undoubtedly lucky, but there also comes some risk when living in different places. For estate planning purposes, it is vital to grasp the ramifications.
A study by Merrill Lynch states that a vast number of people who reach 61-years-old can live wherever they want. Before then, various responsibilities largely kept a working person in one place the bulk of the time. However, when they are free, they want to go and live elsewhere. For those who live in different places for part of the time, the estate plan and its legality can be a concern.
Those who are considering spending time in two states or more should think about where they want to list as the primary domicile. It is legal to have several residences, but only a single domicile. Understanding the advantages of one state vs. the next when it comes to taxes is just one part of the process. The estate tax can also be a concern. There are different rules for residency depending on the state. Driver's licenses, mailing addresses and the address for a tax return can all be keys.
Certain documents might not be valid across state lines. That includes wills, a health proxy, and a power of attorney among other documents. With these, knowing the rules is essential. For people who have taken the necessary and sometimes intimidating steps to formulate strategies for an estate plan, a mistake with living arrangements can be costly. Discussing these issues with a legal professional experienced in estate planning can help.
Source: cnbc.com, "A financial flight plan for snowbirds," Kelli B. Grant, Sept. 14, 2017