The first home that I bought with my husband was a very difficult learning experience. We purchased the house as-is and worked directly with the owners instead of using a real estate agent. About a year later, we learned why the former owner sold the house for so much under market price and why they didn't want to use a real estate agent to sell it. Our blog outlines the many mistakes that can be made if you purchase a home without a real estate agent or attorney working with you. Hopefully, our mistakes will help you learn what not to do.
It isn't uncommon these days for retirees to keep more than one residence. A lot of Ohio and New Jersey residents, for example, turn into "snowbirds" that fly south for the winter and take up residence in their Florida condos until the weather gets warm. Having property in more than one state, however, can create some unique issues when it comes to estate planning. This is what you should know.
You need to make sure you have a clearly defined domicile.
Your domicile is defined as your permanent home. While you can have houses in as many states as you want, you can only have one domicile. Sometimes retirees decide to change their domicile to what started out as their vacation home because they like the tax benefits or some other benefit they enjoy in that state. That can create problems down the line for your heirs, however, if your estate plans were laid out according to the rules of your previous domicile.
A domicile is generally based on your primary physical location, but if you divide your time fairly evenly between residences, the court will look at things like where you registered to vote, what state you got your last driver's license in, the address you used on your bank accounts, and where you told people you considered your actual home to be. If you changed domiciles since you drew up your will and other estate documents, it's time to have them reviewed by an attorney in your current state of domicile to make sure that all the legal requirements are met.
You may want to consider how to best dispose of out-of-state property before your death.
You may need to have some heavy conversation with your heirs at some point, especially if health issues or other reasons cause you to decide to stop traveling between residences and stay in one location. If your heirs don't intend to keep the out-of-state property that you own, it might be best to sell the property before you die. That can make it easier to make sure that your heirs get the maximum value of the property without being burdened by unnecessary inheritance and estate taxes.
Alternately, you may be able to make use of something like a transfer-on-death deed, if the property is in a state that allows them—which could keep your heirs from having to struggle through probate in order to inherit a house you haven't visited in years.
You need to manage your living will and power-of-attorney documents carefully.
Living wills and power-of-attorney documents for healthcare and finances can be particularly problematic for people who switch between states during the course of the year or for those who eventually change their domicile. In either situation, it pays to make sure that you have the living will and power-of-attorney documents drawn up in the state you're currently in—even if you need to keep more than one set of documents.
You don't want to run the risk that your living will won't be honored because it was drawn up in another state and doesn't meet some quirk in the law where you're living when disaster strikes. Similarly, a doctor or financial institution might balk at accepting out-of-state paperwork giving someone power of attorney if you're incapacitated. They have to keep in mind their own legal liabilities, so it is simply smarter to have the documents drawn up within the state instead of relying on those that you already have.
For more information or advice, contact an attorney in your area to discuss how to handle estate issues when you spend part of the year in another state or if you're thinking of changing your domicile. Visit websites like http://valentineandvalentine.com to learn more.Share
14 November 2016