If you move your legal residence, must you change your estate plan?
Americans move an average of 12 times in their lifetimes and as frequently as once every five years. Does your estate plan move with you?
As with all legal issues, the answer to that question is unnecessarily complicated. However, the solution can be simple if you know what to do. Let’s unpack that solution.
Will Estate Plan for Illinois Residents
A valid Illinois Last Will and Testament requires the following: the person signing is 18 years or older and of “sound mind and memory.” Additionally, two or more credible people witness the signing of the document. The witnesses should not be beneficiaries or family members. It is a requirement to file the Will in the Circuit Court Clerk within 30 days of the decedent’s death.
In Illinois, a Will does not require a notary. However, Illinois and several other states allow the admission of a notarized Will to Probate without witness testimony. Therefore, all my client’s Wills are notarized—more on that out-of-state requirement below.
Living Trust Estate Plan for Illinois Residents
Since a Will is subject to Probate Court, it is not your ideal estate plan. Rather, you should have a Living Trust as your primary estate plan.
To be valid in Illinois, surprisingly, a Living Trust does not need to be witnessed or notarized. However, it is not a wise practice. The Illinois Trust Code requires that the Trust creator intends to create a Trust, has legal capacity, and names a beneficiary who is not the creator.
Regardless of the legal requirements of creation and signing, you will be funding your Trust with financial institution accounts with their Trust requirements. A notary is almost always one of them. Additionally, other states require witnesses and a notary for a Living Trust. Therefore, all my clients are provided with a notary and two independent witnesses.
Moving with your Estate Plan
Now that we understand how to validly create and sign a Living Trust or a Will in Illinois, what happens when you move?
If your new residence is in Illinois, your validly signed estate plan is still valid regardless of the new county. If the estate plan is a Will, it is filed at your death with the court in the county of your residence at the time of your death.
When moving to another state other than Illinois, the general rule is that a Living Trust is valid in your new state if its creation complies with the jurisdiction’s laws where the Trust was executed. The same holds if you move to Illinois from another state.
You should not, however, rely on “general rules.” There is every reason to do more than the minimum regarding your estate plan.
You will deal with new financial institutions, notaries, and witness requirements in your new state. Additionally, the laws may differ regarding where and how you sign your estate plan documents and the consequences of a new marital status.
Consequently, your estate plan should always be carefully drafted by your Illinois lawyer and have two witnesses and a notary, with a review by an attorney in your new state. Your previous estate plan is valid if properly drafted, executed, and reviewed.
At the end of your life, or incapacitation, firearms, real estate, or financial accounts in your name, all are at risk of Probate.
- A Will = Probate. The rule is no one can legally sign your name. Therefore, at your death or incapacity, all assets in your name are subject to the complete Probate process, which averages 18 months and is costly.
- A fully funded Living Trust completely avoids Probate.
- A Living Trust estate plan includes Health Care and Financial Power of Attorney documents and a Last Will and Testament for guardianship of minor children and to “pour over” any assets still in your name at your death out of Probate.
- Your life insurance policies and deferred compensation accounts can name your Living Trust as beneficiary, subject to essential tax considerations.
This blog entry is for information and planning purposes. Therefore, it is not legal advice. Please do not use this blog as legal advice which turns on specific facts and laws in particular jurisdictions. No reader of this blog should act or refrain from acting based on any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader’s state, country or other applicable licensing jurisdiction.