Are you one of the millions of individuals who moved to Washington from another state? Has the pandemic allowed you to work remotely from any location?
Whether you’ve already made a move to Washington or are considering an upcoming relocation, you likely created a checklist that includes updating your address, obtaining a new driver’s license, and possibly purchasing an umbrella. Unfortunately, many people fail to add another line item to the checklist: ensuring they update their estate-planning documents.
Few are aware that they may need to revise their wills after relocating from one state to another. It is important to understand that state-by-state differences in inheritance, marital property, and tax may affect your estate plan. It is also important to ensure that your estate planning documents are in full compliance with Washington law.
Updating your plan can reduce unnecessary stress or unintended consequences resulting from the difference in states’ laws. Below are some of the considerations that your relocation may impact.
Your domicile is based on various factors, especially if you maintain property in multiple states. Factors affecting domicile can include where you spend your time, work, register to vote or drive, and the address listed in your legal documents.
Marital property laws determine the division of assets between spouses upon death or divorce. Washington recognizes property as community property, treating all assets acquired during the marriage (though not gifts or inheritance) as equally owned by both spouses.
Other states recognize “common law” property, which treats each spouse’s property as individually owned. If you move between different legal systems, the character of your marital property may be affected.
Some states have particular property laws that may impact or be impacted by how you title your property. Failing to consider these issues may result in unanticipated taxes, liability, fees, and headaches. Review your property title after your move to be sure the legal effect matches what you desire.
Gift, Estate, and Inheritance Laws
While federal estate tax only applies to decedents with estates above $11.7 million (as of 2021), the Washington state tax exemption is lower at $2,193,000 per person. If relocating from a state with no state tax exemption or one that was lower, your estate plan may need to be restructured or simplified to reflect our state’s tax laws.
If Washington is now your new residence and you purchase real property, your estate will require probate in Washington. If you own property in another state, ancillary probate will likely be a requirement in that state as well.
Updating your plan now can reduce unnecessary stress or unintended consequences resulting from the difference in state laws after you pass. Reach out to us today. We will be happy to review your plan to ensure it fully conforms to Washington law.