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Lately I’ve been helping a number of clients who have moved to California, or are planning on moving out of California.  What happens to your estate plan when you change states? 

In theory, your documents will still be valid when you move to a new jurisdiction, or you bring your old documents to California from another state.  However, there are a number of nuances to be aware of. 

Results May Vary…

Differences in these areas may lead to unexpected results:

  • Community vs Common Law: Most western states, like California are community property states, while other states are common law states.  This has big implications for division of an estate in a blended family situation, and for paying capital gains taxes, especially for a surviving spouse.
  • State Estate Tax: while the federal Estate Tax exclusion amount is currently $5+ million, states other than California have their own estate taxes.  You’ll want to make sure your estate plan accounts for your states estate tax laws.
  • Domicile: That’s the fancy term for which state gets to tax you.  Each state is a little bit different in how they define domicile.  You’ll want to be sure you are going to qualify as domiciled in only one state at a time – and not get caught in between, as happened to the heir to the Campbell Soup fortune

When you move to a new state, the best practice is to have a local estate planning attorney review your out-of-state documents, and be prepared to update your incapacity documents.

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