What happens to an estate plan done in another state? Here are a few areas of concern.
1. Adequate execution of documents
The documents that make up most estate plans are subject to state law requirements, including the requirements for how documents are executed. This includes the number of persons who must witness the signing of a document, and whether such signatures must be notarized. Written instructions prepared by an individual that are not properly incorporated into a will are another potential problem. Documents and attachments that are not fully and properly executed may be given no effect, which can have potentially costly and far-reaching consequences.
2. Tax thresholds
State-level estate tax is another potential problem. To the extent that an estate plan contemplates tax thresholds that are higher than those of Illinois, the plan may be exposed to more taxation than otherwise may be required.
3. Real estate
What happened to the real estate owned in the previous state? If it was sold, the distribution scheme in the prior estate plan may now be unbalanced, particularly if intended for only certain beneficiaries. If the real estate is still owned, the manner in which it was held may or may not be optimal from the standpoint of Illinois residency. For example, if owned outright rather than through a trust or business entity, then it may be subject to a probate or an ancillary probate proceeding on the death of the owner.
4. Agents
Powers of attorney for healthcare and property contemplate the appointment of an agent to assist you in conducting your affairs in the event of a period of incapacity. If moving from far away, it may become very burdensome for your agent to continue to serve in that manner, particularly to the extent that travel to Illinois becomes necessary. Therefore, it is worth considering whether to designate someone more proximate as an agent.
5. Beneficiaries
Many types of accounts, including bank accounts, investment accounts, retirement plans, and life insurance policies offer or require beneficiary designations. They should be updated with any new contact information to avoid delays or other problems when a distribution becomes due.