Many people moving to Florida have previously made a will or created a living trust. Is their existing will or trust valid in Florida? Should they make a new will or amend their living trust?
Living trusts are private contracts. A trust agreement properly executed in another state is enforceable in Florida, similar to all other contracts, under the full faith and credit provisions of the U.S. Constitution.
Therefore, your existing will or living trust remains legally effective after you become a Florida resident.
Reasons to Update Estate Plan After Moving to Florida
Even if existing wills and trusts are legally valid, there are still reasons to consider updating an estate plan after moving to Florida.
For example, Florida law provides an “elective share” for surviving spouses. A surviving spouse is entitled to 30 percent of the deceased spouse’s assets in lieu of what the surviving spouse is otherwise entitled to under the decedent’s estate plan. After a second or subsequent marriage, many people create estate plans that intentionally bypass their surviving spouse in favor of their separate children. After moving to Florida, these plans may be altered by Florida’s elective share rights of a surviving spouse.
Similarly, Florida homestead law gives a surviving spouse a life estate in the homestead when the property was titled in the sole name of the deceased spouse. The public policy underlying this law is to prevent either spouse from creating an estate plan than deprives the surviving spouse of the right to remain in their marital home.
In second or subsequent marriages, a spouse with sole title to a homestead may have drafted an estate plan in another state that devised his Florida home to his separate children, bypassing their spouse. This plan may conflict with Florida homestead law.
A new Florida resident may update their estate planning documents in a way that accomplishes their testamentary wishes in a manner consistent with Florida’s elective share rights and homestead laws.
Living trusts typically become irrevocable in full or in part after a trustmaker’s death. Many states impose a tax on income earned by trusts located in their state.
Florida does not tax trust income. Taxing states are apt to assert taxation on trusts created in or associated with their state even if the trustmaker or trust beneficiaries are residing in Florida.
The taxing state could argue that any trust created and executed by residents of the taxing state, or any trust with a trustee situated in the taxing state, has a sufficient connection to the taxing state to make trust income subject to the state’s trust tax laws.
Restating an existing trust after moving to Florida likely will protect the trust beneficiaries from the tax imposed by the state where the trust was first executed and where any successor trustees are located. New Florida residents coming from a state that imposes tax on trust income should consider executing a new or restated living trust in Florida and also appointing successor trustees that reside in Florida. The new or restated trust should provide that the trust agreement is subject to Florida law and Florida court jurisdiction.
About the Author
Jon Alper is an expert in estate planning for individuals and small businesses.
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