Tailoring a Will and Power of Attorney for Multiple States

On December 5, 2018

If you own property in more than one state, do you need estate planning documents for each state?

The answer is probably no, but you need to do some planning if you want to avoid going through probate in each of the states.

A lawyer can generally draft a will that is generic enough to be probated in any state except Louisiana, which has very specific rules. However, real property in another state is subject to probate in that state even if you don’t live there. Without proper planning, an estate may have to go through probate in every state you have property in.

To avoid multiple probate actions, you may want to use probate avoidance techniques for the property that is out of state. If your estate is under the estate tax limit and you don’t have family complications, you may hold your property jointly with your spouse or other intended beneficiary.  Interests held jointly pass without going through probate.

A more complex technique is a revocable living trust.

This is much more useful and powerful when the intended survivor beneficiary is impaired (perhaps by mental disability, substance addiction, or serious debts , are revocable living trusts.

Property in a revocable living trust can pass to whomever is named as beneficiary.  However, when certain conditions are met, the property will continue to be held in the trust to protect it for the benefit of the impaired beneficiary.

In either case, the property held in trust does not come under the jurisdiction of the probate court and its distribution won’t be held up by the probate process.

A power of attorney — which allows a person you appoint to act in your place for financial purposes if you ever become incapacitated — is an important estate planning document for anyone, including individuals with property in multiple states. States may have different rules for what makes a valid power of attorney. State laws usually recognize a valid power of attorney created in another state, but you should check with an attorney in the state to make sure it will be recognized. Even when the power of attorney complies with state law, some banks may not accept it without a delay or, in extreme cases, court judgment. Avoid this by letting your bank know about the power of attorney in advance and securing approval of the form before you become incapable of doing so later.

As always, these are general considerations.  Contact your attorney to make sure your estate plan, and the documents to implement it, work in multiple states.

 

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