Fresh & Local: estate planning version.

Phote by Sarah Pflug from Burst

Keep your estate planning documents Fresh and Local

I often get calls from people who have just moved to Connecticut and are wondering if they need to update or revise their estate planning documents.  What I usually say is that under the full faith and credit provisions of the U.S. Constitution, each state is required to give full faith and credit to public acts, records, and judicial proceedings of other states. So, if they were properly executed in your old state, your documents should be valid—but ….

Why is there always a “but” with you lawyers? 

Sorry, but it’s never that simple.  There are a number of reasons you need to have your documents reviewed by a local attorney.  First, the state you are now living may have a different estate tax or inheritance tax structure.  This means while you may not have needed any tax planning provisions in your documents when you were living in your old home state, if you move to a state with a different estate tax exemption you might now need to worry about taxes.  For example, Connecticut’s estate tax exemption is $3.6 million this year.  The exemption in Massachusetts is on $1 million. 

Second, even if you don’t need to worry about tax planning, it is usually best practice to have documents which conform to your new state of residence.  It may seem silly, but if you walk into a bank in Connecticut with a Power of Attorney from North Carolina, you are going to have a harder time getting things done.  Why? Because your document looks different from what that banker is used to seeing.  Sure, when they shoot it up to the legal department and they come back a few days later saying it is fine, you can go about doing your business, buy why risk it?

Last, I tell people it’s important to keep their estate plan, and more specifically their Power of Attorney, fresh.  What’s worse than an out of state Power of Attorney form?  An out of state Power of Attorney form that is more than 5 years old.  It shouldn’t matter.  And there is a relatively new Power of Attorney statute in Connecticut which is designed to avoid rejection of “stale” POA’s, but again, why risk it. We offer free annual updates at our client’s request because we believe it’s important to keep your documents “Fresh.”

So, your out of state documents should work in your new state, but… why risk it?  Make them fresh and local.