Red or Blue – the Only Significant Difference Between States?

As Americans, we live in a geographically polarized environment. Although a handful of states, the battleground states in presidential elections, are an undecided purple, most U.S. states are clearly either red or blue. Moreover, Americans are moving to states that tend to align more with their political views. Red or blue, although important, is not the only significant difference between states. Another difference that tends to be forgotten is that many states’ laws regarding estate planning and estate administration possess unique peculiarities.

I often receive calls from prospective clients who have ideas on how to structure their estate planning based on the advice of family members or their own personal experiences administering the estates of family members. As the conversation progresses, I discover that these family members are not Washington residents. Since the laws differ from state to state, what happened in another state is not necessarily analogous to what would happen in Washington.

To cite an example that arises frequently, most California residents represented by counsel tend to use revocable living trusts as their primary estate planning tool. Attorneys often advise their California clients to use a revocable living trust to avoid the complexities and costs of the California probate system. Conversely, a Washington probate tends to be much more streamlined and less expensive than in California. The reasons for getting a revocable living trust for Washington residents may not be as compelling as those for a California resident with similar assets and goals.

Additionally, some states have a state estate tax while others do not. Your estate plan may appropriately address your potential estate tax liability for your state of residence, but that doesn’t mean that it’ll work well in another state that either doesn’t have a state estate tax or, if it does, has different tax limits and laws pertaining to that tax.

If you decide to move to a new state, either because it’s red or blue, or perhaps simply because you like that state or obtained a job there, it’s critical to have your estate planning documents reviewed by an attorney who is licensed in your new state. Your estate plan may well need to be updated to reflect the laws of your new state of residence.

If you recently moved to Washington and would like to have your estate planning documents reviewed, please let us know. We’d be happy to help.