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Houston Estate Planning and Probate Blog

Tuesday, December 31, 2013

Moving to Another State and How it Affects Estate Planning

In general, wills or living trusts that are valid in one state should be valid in all states. However, if you’ve recently moved, it’s highly recommended that you consult an estate planning attorney in your new state. This is because states can have very different laws regarding all aspects of estate planning. For example, some states may allow you to disinherit a spouse if certain language is used, while other states may not allow it.

Another event that can cause problems with moving and estate planning is moving from a community property state to a common law state or vice versa. In community property states, all property earned or acquired during marriage is generally owned in equal halves by each spouse, with some exceptions of separate property, such as any property received by only one of them through gift or inheritance. The property that is considered community property includes income, anything acquired with income during the marriage, and any separate property that is transformed into community property. Separate property includes anything owned by either spouse before marriage, property received by only one spouse by gift or inheritance, and certain types of personal injury recoveries. One spouse is not required in community property states to leave his or her half of the community property to another spouse, although many do.

In common law states, property acquired during a marriage is not automatically owned by both spouses. In common law states, the spouse who earns money and acquires property owns it by himself or herself, unless he or she chooses to share it with his or her spouse. Common law states usually have rules to protect a surviving spouse from being disinherited.

Whether a couple lives in a community property state or a common law state is important for estate planning purposes, because that can directly affect what each spouse is considered to own at death.

If a couple moves from a common law state to a community property state, there are different rules about what happens depending on where you move. Typically, if a couple moves from a community property state to a common law state, each spouse retains a one-half interest in property accumulated during marriage while they lived in the community property state.

The laws of different states vary significantly with respect to incapacity planning, estate planning and inheritance rights. Therefore, it’s important to contact an estate planning attorney in your new area, especially if you are moving from a community property state to a common law state, or vice versa.


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