There are many things that can cause someone to move, and depending on the reasons, the method, or other decisions, it may be appropriate to update a trust or a will. Some of the reasons for moving, may be a reason to review, for example, is the move because of a change in marital status (marriage/divorce)? Is the move because you’re having another baby and need more room? Is the move because you were just hired in a fantastic new job? Were you just recruited to play on a professional sports team? Did you just win the lotto?
What to do after you close escrow?
When you buy a new home, there are many things that change. You may be moving down the street, or to a new state, but there are things you should consider any time you move, let alone when you buy a new home.
In many (if not all) states, probate fees are determined with consideration of your assets, while ignoring your liabilities. This means that if you buy a $1,000,000 home, with a $900,000 mortgage, the probate fees are determined by the $1,000,000 value and ignores the mortgage.
Location of Residence
Different cities, counties, and states have different laws. One example, for Colorado, Denver County has more restrictions on firearms than other counties. If you moved from another city to Denver (or even just during a visit), with an assault rifle, you’d likely be in violation of the law and subject to criminal prosecution. There are other more subtle laws to consider, do you need to clear snow off the sidewalk? What are the trash days? Who are the utility providers?
One very important change is if you move between states, where estate planning laws can differ greatly. Any time you relocate to a new state, you should pay careful attention to your will or trust and ensure it is updated appropriately.
Change in Assets
While relocating is changing location, it is often a change in assets. You often sell a house or buy a house, or both. Any time you have a significant change in your assets, you should evaluate and likely amend your estate plan (trust or will). If you have a trust, you should also ensure that the new home (and/or accounts) are all titled in the name of the trust.
Estate Plan Needs
While many of the examples of reasons to move give independent reasons on why you should review your estate plan, because they are changes your family dynamic or there is a change to your assets that should be considered, it is important to look at the big picture. Not all of these reviews will result in needing to change your estate plan, it is simply a good time to review it. For example:
If you just bought a home…
(1) You have a revocable living trust;
(2) You are staying in the same state;
(3) You are married with no children;
(4) Everything goes to your the spouse if you pass away
(5) There is not a significant enough change in assets to affect any inheritance taxes for where you now live (if there are any); AND
(6) You still want all of those facts to remain the same
If all of the above are true, then the odds are that there is no need to update a trust, just make sure the house you bought is titled in the name of the trust. If the house is not titled in the name of the trust, you should probably file a deed with the county to transfer the house into the trust.
In general, you should review your estate plan on a regular basis and when there are significant changes to your assets or family dynamic.