Multi-State Estate Planning
If you’re like a lot of Oregonians, you may run for the sunshine when the days grow grey, and the temperatures drop. It is increasingly common, particularly for our retired clients, to become seasonal residents or “snowbirds”. These folks leave the state for the dreary fall and winter and return for those glorious spring and summer months we are known for here in the Pacific Northwest. While it may sound simple enough, and in fact, something many of us aspire to do one day, maintaining multiple homes in multiple states requires extra attention when it comes to estate planning.
Just like your driver’s license, your primary residence is limited to one address in a single state. This is the state where probate takes place when you die. However, if you split your time between multiple homes in multiple states, it becomes necessary to determine your primary residence. There are many considerations to make when determining which state might be best. This is especially true for tax implications, as states vary on their estate tax rules. Once your primary residence is determined, you can create a trust in that state, and place all your real estate into the trust. Assets held in the trust, (in this case, your real estate) then pass directly to your beneficiaries when you die. The alternative is: you pass away, and your family is left with the enormous undertaking of facing probate in each state where you owned property: two homes in two states = two probate proceedings, and so on. Imagine the difficulty and cost associated with navigating probate multiple times across states lines and according to distinct sets of rules, and you’ll quickly come to find why I favor a trust in this scenario.
When creating a multi-state estate plan strategy, it is imperative that you hire an estate planning attorney. An experienced attorney who focuses their practice on estate planning will protect your assets, minimize your estate taxes, and help your beneficiaries avoid probate. They will also have the insight to address potential complications before they arise.
The takeaway? If you own property in more than one state, your estate plan requires extra attention –don't sleep on putting together a solid plan.
