If you have made an estate plan and established a trust, good for you: a proactive approach to care and asset arrangements for life’s later years is best. Even if you end up deciding to move to a different state, your trust may continue to meet your needs without a major overhaul. Though, it’s wise to get legal guidance with regard to the trust laws in your new state.
The Grass May Be Greener?
Moving presents big challenges and tantalizing possibilities. Will lost ties and the comforts of familiarity be worth the tradeoffs? For many adults in their 60s, the answers lie in a holistic assessment of security, factoring in taxes, housing availability and affordability, convenience to services and, of course, connection to caring others. Assessing moving trends from recent years, AARP reports:
- More than 338,000 U.S. residents retired to a new home in 2023, a 44 percent jump from 2022 and the highest number in three years….
- Retirement was the fastest-growing reason people gave for moving…,increasing by nearly twice the rate of job-related moves and more than four times the rate of people seeking cheaper housing.
- About a quarter of retiree relocations crossed state lines, with Florida ranking as the top destination for the second straight year. About 11 percent of such moves were to the Sunshine State. South Carolina, which did not make the top 10 in 2022, was a close second, drawing 10 percent of retirement moves.
Weighing in on migration trends for older adults, Realtor observes: “It’s the younger generation that in some cases drives the retiree migration. In other other words, if young professionals living in Illinois or New York cannot afford to pay over 2% in property taxes, they might be motivated to relocate to a more affordable state, and their parents would be more inclined to tag along.” Regardless of the driving factors behind making a move later in life, it’s key to update and solidify estate and care plans too. Ideally, doing so involves establishing a trust that can hold assets both for our own needs as we age, and designate assets for beneficiaries. Fortunately, as Phelps LaClair notes, if you set up a trust in one state, and then decide to move to another state, you may not need a complete trust overhaul. However, it’s best to obtain legal guidance in your new state of residence and revise a trust if:
- Your trust refers to outdated state statutes or laws
- You now live in a state with different estate or trust laws
- You’ve bought property in your new state that’s not included in your trust
- You want easier access to legal support from a local attorney who understands your current state’s laws
- You’ve experienced a major life change (like marriage, the birth of a child or grandchild, or starting retirement) since your last update
- Your successor trustee is no longer the best fit
Generally, it’s a good idea to periodically review trustee designations whether or not you’ve made a move across states. As years pass, lives change, and it can be that the trustee you originally designated no longer has the capacity to administer your trust. Attorneys also caution that although a trustee “can live in a different state from you or your beneficiaries,…this might cause complications. Some states impose additional tax burdens or administrative requirements when an out-of-state trustee is involved. If your trustee now lives across the country, it might be time to reconsider who’s managing your trust.”
Keep in mind that trustees have fiduciary obligations and are held to exceptionally high legal standards, “the most important of which are the duties of loyalty and care, and the duty to act in accordance with the terms of the trust agreement.” Given the seriousness of the role, trustee bonds are often required. Essentially, a trustee bond is a specific type of fiduciary bond that protects the interests of the trust and its beneficiaries in accordance with applicable state law. As a leading national provider of many types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain trustee bonds in every state: Just get a quote online, fill out the information, and enter a payment method. Then, simply print or e-file the bond from anywhere.
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