Relocation is a good occasion to attend to estate planning
Pro Bono Publico
Welcome to Colorado. You’ve chosen well. We live in a beautiful place, and we’re glad you’re here. Whether you moved here for work, pleasure, retirement or otherwise, it may be a good idea to attend to a few legal matters in connection with your relocation.
Perhaps the most commonly offered and accepted advice when you relocate to a new state is to update your estate planning documents. Your estate plan needs to be updated from time to time to address changes in the law and in life, and when you move from one state to another, chances are that major changes have occurred in the context of both.
Of course, differences between the laws of the states counsel highly in favor of updating estate planning, and possibly other legal documents. The choice of law provision, for example, in obsolete documents could result in significant hardships if the laws of the state of origin were to apply. Meanwhile, Colorado laws may offer a beneficial feature unavailable in another state, or certain legal risks unique to Colorado may go unaddressed.
Here are a few more concrete examples. A large estate may benefit from the 1,000-year rule against perpetuities available in Colorado. A revocable trust that was cumbersome to maintain in another state might be dispensed with here, where the need for “probate avoidance” is less of a pressing concern. A married couple from a community property state may benefit from a joint revocable trust to plan for and administer community property from the state of origin (which is often worth preserving for tax purposes) and marital property in Colorado, a particular consideration for those relocating from California, Arizona and Texas, among a few other states.
I personally think that fiduciary selection is among the most important estate planning considerations, and a change of residence may counsel in favor of a change in fiduciaries, i.e., those whom you will appoint to be in charge, if needed, during your lifetime through powers of attorney or after your death to administer your estate. Only qualified and trustworthy people should be named as fiduciaries in estate planning documents. But, all things being equal, the qualified and trustworthy person who lives nearby may be in the better resource for your heirs and you.
These considerations aren’t necessarily limited to traditional estate planning documents. Marital agreements, for example, might be re-evaluated in connection with a relocation. A family limited partnership that didn’t enjoy limited liability for the general partners in other states could be transferred to Colorado and be registered as a limited liability limited partnership here.
In addition to attending to matters here in Colorado, there may be some loose ends to tie up in the state of origin. A few matters that may otherwise go under the radar include:
• Notifying parties to a business contract or other private agreements of the change of address, in strict conformance with the provisions of that contract.
• Updating public records with respect to any real property still owned in the state of origin (or other states).
• Obtaining a corporate registered agent in the state of origin.
Matthew Laurel Trinidad is a private attorney at Karp Neu Hanlon PC. He focuses on business law, estate planning, lending and other transactional matters. He can be reached at (970) 945-2261 or firstname.lastname@example.org
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