The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal issue, including those whose questions are addressed here, should consult an attorney for personalized advice on their specific circumstances.
We have seen a tremendous influx of people from other states to Texas over the past five years. Because estate planning varies by state, new residents need to reassess their existing estate plans in light of their recent move. Crossing borders can have profound and unforeseen implications for the future.
Of course, Texas is also home to many people who’ve crossed the national border, traveling from abroad and making the Lone Star State their new home. The same goes for these proud ex-patriots: you need to take a long, hard look at your existing estate plans in a new jurisdiction.
The Wall Street Journal recently featured one American family’s struggle after their father was killed in a terrorist attack while living in Israel. Estate planning emerged as one of their chief concerns. To that end, the Journal shares the following advice:
Estate planning done in one country isn’t always recognized in another.
Even if the plan is recognized, it might be interpreted or executed differently than expected.
Ensure that your healthcare directives and powers of attorney comply with both U.S. federal regulations and Texas state laws.
Be sure you understand the tax liabilities that might apply in each country (and know which countries will take priority).
Never assume the validity of any of your documents or provisions after a move. Confirm with a professional instead.
Your Will should be reviewed periodically and the appropriate adjustments made. Some other factors to consider that dictate reviewing your Will and estate plan:
- Events that automatically revoke a Will: In most states, certain actions on your part automatically revoke your Will. The specific actions vary from state to state. Examples may include marriage and the birth or adoption of a child. Other actions, such as divorce, can cause property left to a former spouse to pass as though your former spouse predeceased you, which may or may not be what you intended. With every major life change, you should review your Will and consult your local attorney to see if a new Will or other changes are required.
- Marriage, divorce, or death of a spouse: Marriage brings about legal relationships that can revoke or conflict with the terms of a Will made prior to the marriage. The end of a marriage requires a fresh look at your Will and, most likely, will lead you to designate different beneficiaries.
- Birth or adoption of a child: Although some states may automatically revoke your Will at the birth or adoption of a child, others may have laws that offer safeguards for children born after your Will was made. You’ll want to make sure that your Will reflects your wishes for how your property is distributed among your offspring. On the subject of offspring, you may also want to revise your Will when the grandchildren come along.
- Changed status of a beneficiary: Children grow up and get married (or divorced). A child or other beneficiary may become sick or disabled or may die. Events in the lives of your loved ones can have an impact on what you want to leave your beneficiaries and how you leave it.
- Changes in your assets or asset value: Over the years, your wealth is likely to increase. You may have acquired assets (i.e., an investment portfolio, a business, valuable collectibles) that you did not have when you made your Will. You may have sold an asset for which you named a beneficiary when you originally made your Will. In other words, your personal financial picture is constantly changing, and your Will should be updated accordingly.
- Retirement: Major changes in your life and your financial holdings occur at retirement. You may receive a lump sum distribution from a company retirement plan, sell the family home, and move to a smaller residence. Add Will's review to your retirement planning checklist.
- Changed tax laws: Income, inheritance, estate, gift, and generation-skipping tax rules are regularly revamped. Failure to make the necessary adjustments to your Will may result in missing tax-saving opportunities.
If you are new to Texas, or even if you’ve been here a while but haven’t dusted off your Wills and trusts since relocating, hiring an attorney to review and revise your estate planning documents can help you ensure that the technical formalities of Texas law are followed and that your gifts are clear and easily understood. Spending a few dollars now will save your family and loved ones from spending more later. Not to mention the confusion and grief that will be avoided.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas. www.moakandmoak.com ©