Tips for Estate Planning if You Reside in Two States



Estate Planning



September 23, 2020

Tips for Estate Planning if You Reside in Two States

If you have residences in two states, you may wonder how this affects your estate planning. This is an especially common circumstance for retirees who have a seasonal home.

Legally, you do not need to create a separate estate planning document for each state in which you reside. However, there are situations in which doing so can make sense.

Here is an overview of considerations you should become familiar with.

Wills and Trusts

You should not ever have to worry about creating a separate will or trust for two states.

Power of Attorney and Healthcare Proxy

You may benefit by having separate power of attorney and healthcare proxy documents for each state of residence.

Healthcare facilities and financial institutions are more accustomed to the rules in their own states. Additionally, states will often use different terms for these legal documents. Having state-specific documents may reduce the potential for complications or confusion.

If a healthcare facility refuses to follow an out-of-state healthcare proxy document, this could result in the case being sent to probate court for guardianship or conservatorship. Court can add unnecessary delays and legal fees. For this reason, separate state-specific documents may be beneficial even if it is not legally necessary to do so. At the very least, it can protect you from these issues and serve as a fallback option should you get any difficulty from healthcare or financial institutions.

Taxes

If you own a residence in a second state particularly for estate or income tax planning reasons, it is important you meet all residency requirements so your estate will not be taxed in your state of origin.

Medicaid

Your estate planning should consider the requirements for Medicaid. If there is a possibility you will need Medicaid benefits to cover long-term care expenses, examine the eligibility rules and Medicaid benefits availability for each state in which you reside. They may vary.

For more information about developing an estate plan if you live in two states, contact an experienced estate planning lawyer at Baker Law Group, P.C.