Do I need to update my trust when I move?
Here are three questions you can ask yourself to determine whether you need to update your trust if/when you decide to move.
Do you have specific language in the trust that would only apply to your prior residence that doesn’t apply to your new residence?
For example, when I draft revocable trusts for clients, I typically reference their primary residence rather than stating a specific home address because I want that term to be adaptable regardless of where you are living. If your trust doesn’t do this, then there could be confusion over whether the new residence takes the place of the old one when trying to determine your intentions.Does the trust fail to account for material differences in state law that would adversely impact your intentions?
For example, if moving from a different state INTO Massachusetts, then you will generally want the trust terms to account for Massachusetts estate tax planning since every state has different estate tax laws and Massachusetts has one of the worst estate taxes in the country (meaning if you come from out of state, then your trust should be updated to shield you from Massachusetts estate taxes).
HOWEVER, if moving out of Massachusetts and into Florida or New Hampshire, then that may not be an issue because those states (FL and NH) do not have an estate tax at the time of this writing, which means that the Massachusetts tax credit shelter (a sub trust) would be irrelevant, but generally doesn’t require a revision - instead it would just be null and void language if drafted properly - PLEASE NOTE: many estate planning attorneys hardwire sub trusts into their client’s trust for estate tax planning purposes (meaning a forced distribution). If that applies to you, then you should definitely update your trust to get rid of a forced credit shelter provision if it is no longer needed. Otherwise, your family is going to deal with unnecessary administrative complications.Does moving make the terms of the trust less practical?
For example, if your old trust has a successor trustee that lived in your former state and you think there’s a better person for the job who lives closer to your new residence, then you may want to consider doing a brief amendment to update your named successor trustees.
If you are still uncertain about whether you need to update your trust, then give me a call at 781 202 6368 or email me at jlento@perennialtrust.com and I’ll review your trust for free.
I’m always happy to help,
Joseph M. Lento, J.D.
Your local estate planning attorney
477 Main Street
Stoneham, MA 02180
