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Preparing to move almost requires a degree in logistics. It involves juggling numerous tasks, such as organizing and packing belongings, coordinating with movers, managing timelines, and ensuring that nothing gets lost or damaged in the process. 

Various forms need to be updated, such as the USPS change of address, driver’s license, vehicle registration, and voter registration. Furthermore, each state has its own laws, and what is legal in your current state may be outlawed in your new locale. Does that also include your estate plan?

How State Laws Influence Estate Planning

Your estate plan consists of legal documents that dictate what happens to your assets and healthcare decisions if you become incapacitated or pass away. The core elements include:

• A will that directs how your assets get distributed after death and appoints guardians for any minor children
• Power of attorney (POA) to handle your financial decisions if you can’t
• Advance directives and a healthcare proxy, which outline your medical care preferences and appoint someone to make decisions for you
• Trusts to manage assets during your lifetime and beyond

Each state has its own rules regarding these documents. What’s valid in California might not meet the requirements in Texas, Florida, or New York. For example, in California, probate can be expensive and time-consuming, taking 12-18 months and costing 3-7% of the estate’s value. Texas and Florida have relatively efficient probate procedures with lower costs, whereas New York has complex rules that can significantly extend the process.

California vs Other States

California is one of nine states that recognize community property. Any assets acquired during the marriage belong to both spouses equally. Other states follow the common law property rules, where the person’s name on the title determines ownership. Moving from California to a common law state requires a review of how assets are titled and potentially an update to your estate plan to reflect the new ownership rules.

California doesn’t impose state estate and inheritance taxes. However, 12 states and the District of Columbia have their own estate taxes, and six states impose inheritance taxes on the beneficiaries. If you move to another state from California, you might need to restructure your estate plan to minimize the tax burden on your beneficiaries. This could potentially save your loved ones a significant amount of money.

If you continue to own property in California and purchase some in your new state, you need to consider that each piece of real estate is subject to the laws of the state where it’s located. You will also need to review your assets that are outside of your will and are passed on through beneficiary designations, such as life insurance policies, bank accounts, and retirement investments like a 401(k).

Your digital assets, including social media accounts and cryptocurrency holdings, also need to be addressed in your estate plan. Some states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, while others have limited or no specific laws governing digital assets. Complicating matters even more is the issue that tech companies may have their own policies that override state laws. Your estate plan should include provisions for digital estate management that comply with the laws of your new state.

Estate Planning Guidance from LPEP Law

Estate planning is complex, and interstate moves make it even more challenging. Our attorneys at Lonich Patton Ehrlich Policastri specialize in estate planning and are familiar with the differences between states. They can work with you to review and update your existing plan.

Contact us at 408-553-0801 to schedule your free consultation. Remember, estate planning isn’t a one-and-done task. It’s an ongoing process that should evolve with your life circumstances, including where you live.

Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

In an interconnected world, international families are becoming more common. Loved ones may stretch across multiple continents in their search for more diversity and opportunities.

Estate planning can be daunting under normal circumstances. Factoring in family members living in another country takes estate planning to a whole new level. 

How do you ensure your wishes are carried out and your wealth is allocated fairly across borders when laws, taxes, and cultural expectations vary? Estate planning for international families is more about paperwork. It’s also about striking a balance. 

Key Challenges in International Estate Planning

Differences in legal systems, tax codes, and cultural expectations create challenges in international estate planning. Here are some of the key hurdles families may face:

Differing legal systems

Inheritance laws can vary significantly, affecting who inherits and the amount they receive. Some countries have a system of forced heirship, which means that the law dictates that a portion of the estate must be distributed to specific family members, regardless of what the will states. Other countries have more testamentary freedom and flexibility in determining how assets are distributed.

Tax Implications

Some countries have an inheritance tax, which can vary in rates and exemptions. They also vary whether they base their estate tax on the location of the assets or the domicile of the deceased. For example, countries such as the United States tax the worldwide assets of their citizens, regardless of where they live. 

When creating an estate plan, it’s essential to consider the risk of double taxation. This occurs when the assets are taxed in the deceased’s country, but the beneficiaries also face a tax bill from their country of residence. 

The United States does have tax treaties in place with several countries, including Canada, the United Kingdom, Germany, and France. Tax treaties on gifts and inheritances help mitigate the impact of double taxation.

Cultural and Family Dynamics

International estate planning also requires a balance between legal obligations and cultural expectations.

In certain cultures, primogeniture is the expectation in which the eldest son inherits most or all of the family assets. Other cultures tend towards an equal distribution of assets among all children, regardless of their gender or birth order.

Gender roles are another factor in estate planning. Some patriarchal societies don’t allow women to inherit assets, and property passes to the male relatives. This expectation can clash with legal systems that prioritize equal rights and look to ensure fairness among all beneficiaries.

These cultural differences can affect the recognition and enforceability of foreign wills.

Collaborate with LPEP Law

When crafting an international estate plan, it’s vital to work with experts who are familiar with cross-border issues. At Lonich Patton Ehrlich Policastri, our attorneys, with their extensive knowledge and experience, can guide you through the complexities of international estate planning. We can explain how to use treaties, trusts, and other legal tools to your advantage, giving you the confidence that your plan is in good hands.

Estate planning across borders can be complex, but we have strategies to create a plan tailored to your unique needs.

Contact us at (408) 553-0801 to schedule your free consultation.

Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.