Anxious to stay one step ahead of "old man winter," it's that time of year when people living in northern states start flocking to Florida to spend the winter months living in a more pleasant climate. While these "snow birds" have set up residences in two states, one up north where the summers are cool and one down south where the winters are warm, it should be noted that living in more than one state can present unique issues when it comes to estate planning.
Of course, no one can predict when they will pass away. However, those who reside in different states at different times of the year should be aware that state laws may differ when it comes to estate taxes, probate proceedings, will execution and other estate planning issues.
For example, while the threshold for the federal estate tax is high enough that it won't affect the average person, certain states do have estate taxes and an inheritance tax that need to be planned for. Florida is one of the states that has neither an estate tax nor an inheritance tax, which could be important when it comes to executing an estate plan.
Also, when a person owns property in two or more states, their estate may then need to go through probate in each state. Therefore, executing a trust, which will not go through probate, can alleviate this problem.
In addition, if a person has assets in more than one state, they should have a Durable Power of Attorney in each state. This way, if the person becomes incapacitated, the person appointed as having power of attorney can access the necessary documents.
Snowbirds may enjoy the fact that they can take advantage of the best weather their chosen states have to offer, but they should keep in mind that having property in more than one state can complicate the estate planning process. Therefore, before executing an estate plan, they should seek the advice they need to understand how the laws of each state would apply to them.
Source: CBS Boston, "Snow Birds: Protecting Your Estate While Living In Two States," Dee Lee, Oct. 13, 2017