If I Move to Another State Do I Need to Update my Legal Documents? (Part 2)

If I Move to Another State Do I Need to Update my Legal Documents? (Part 2)

In my post last week I discussed the need to update a power of attorney or health care directive when one moves from one state to another.  This week we talk about wills and trusts.  Is there a need to update these as a result of a move?

The execution of legal documents such as wills and trusts is governed by state law.  In New Jersey wills should be signed before a notary and 2 witnesses.  We have a self proving will statute.  Provided the testator (person signing the will) and witnesses state by way of affidavit in the will that the testator signs willingly as his or her free and voluntarily act, not under constraint or undue influence and is over the age of 18, the process of admitting a will to probate is relatively easy.  There is no need to submit the will to a judge or before a legal proceeding.  

The Surrogate instead examines the will to determine if it meets the statutory requirements and then accepts the will and appoints the executor.  If the will does not meet the requirements, however, because the will was executed in another state where the laws differ, then admitting the will may require a legal proceeding.  Conversely, if the will was executed in New Jersey, but the person resides in another state when he or she dies, the document may not comply with that state’s law.  While it may have a similar self proving will statute, the requirements of that law may be slightly different.  

Pennsylvania, for example, has different language in it’s laws governing the execution of wills.  One solution is to attempt to locate the witnesses for the purpose of having them sign an affidavit with the required Pennsylvania language.  If that cannot be done, however, a more involved legal process is involved.

There may be other reasons to update an out of state will.  Estate and inheritance taxes ought to be considered.  For example, tax savings trusts might need to be modified or added to avoid or limit taxes in one state that may not be present in another.  While New Jersey does not currently have an estate tax, it is one of a handful of states that does have an inheritance tax.

The inheritance tax is based on the relationship of the heirs to the decedent (person who died).  If in my will I leave my estate to my brother and his wife, for example, in a state that does not have inheritance tax that is not a problem.  A move to New Jersey, however, would trigger such a tax.  In an effort to minimize the tax I might want to consider leaving the estate to my brother and not his wife because what he receives from me is taxed at a lower rate than what his wife would receive.

As we see, not every interstate move requires updating these documents, however, an evaluation in each instance ought to be done.