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For Snowbirds, Estate Planning Is Needed for More than One Nest

“Every year like clockwork, when the leaves change and the temperature drops, thousands of Indiana residents flee the bitter Hoosier winter, in favor of a warmer southern climate. Most often, these snowbirds find themselves wintering in Florida, and many decide to permanently relocate to the Sunshine State.”

Leaving the cold behind is a wonderful journey for the many northerners who make the annual trip. However, they need to be aware of some unintended consequences to their estate plans. State laws govern the administration of estates and the rules in one state may not always be the same in another, according to an article from The Indiana Lawyer titled “Multi-jurisdictional estate planning requires research, collaboration.”

This multi-state thinking applies to anyone with property in more than one state—or countries. How then can they figure out how to administer their assets after death, if they are spread out across the country or around the globe?

The process sounds simple but it’s not. Their estate planning attorney needs to understand and advise them about the laws governing each of the jurisdictions where they have assets. It requires extensive research and may need the help of other attorneys working together. If the cost is a concern, understand that the cost of doing this after death will likely become far more complex and costlier.

The first step is to identify the assets and where they are located and then determine where the client maintains legal residence.

People often have property in a few states, as well as bank accounts in a few states. Tangible assets, such as real estate and intangible assets, such as bank accounts, are treated differently in estate planning law.

Tangible assets are typically governed by the law where the asset is owned, while intangibles are governed by the law of where the client resides. One way to simply this process is to put all the assets into a revocable trust, which avoids probate and helps client avoid multiple ancillary estates.

 However, estate attorneys will need to know the estate law of other locations to help their clients make the right decisions for their assets.

Many states have probate laws with similar general principles. However, the details are different. One example: a trust that was properly executed in Indiana was ineffective under Florida law, because of the lack of sufficient witness signatures. It was a small detail, but one that made all the difference.

The problem becomes even more complex, when the person has assets in foreign countries. In some countries, forced heirship will actually prohibit citizens from dictating where their assets go after death. In these countries, a certain percentage of a citizen’s assets must go to their children, spouse, etc. And some countries don’t recognize the concept of a trust, so creating a revocable trust to avoid ancillary estates won’t work.

One recommendation: an estate planning attorney who is licensed in more than one state, and in a perfect situation, the home state and the “warm” state to be sure that your estate plan works in both states.

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