Is it valid from one state to the next? Let’s say you have had enough of those Michigan winters and one day you happen to see the headline – North Carolina is ranked #1 among places to retire. A year later you’ve just arrived in your new NC home and you’ve ordered a pizza while you contemplate the tedious chore of unpacking. Wait a minute….what about your Will and other estate planning documents? Do they still work? Or better yet….I wonder what happened to those documents? Of course that is the last thing on your mind, but somewhere on your “To Do” list you should include a review of your documents and how they work in your new state.
First things first: Yes, an out-of-state Will should be valid in North Carolina as long as it was prepared and executed in accordance with the laws of the other state. This is also true for other documents such as financial Power of Attorney and Health Care Power of Attorney. The problem is that these out-of-state documents may be much more difficult to use here in North Carolina and this may create headaches for your family. Our courts, financial institutions and health care providers, will likely not be familiar with most out-of-state forms and this disconnect leads to delay and added administrative requirements.
North Carolina has very specific requirements for language which must be included in a Will for the document to be probated in the normal course. Without this magic language, it can be a real pain to probate a Will; you may have to locate witnesses from years ago in another state, or you may have to pay for a substantial security bond for an out-of-state Executor. For this reason I regularly advise clients that, at a minimum, they should have their documents reviewed by a North Carolina attorney. We often recommend that a client execute a new North Carolina Will to replace their existing document simply to ensure that the necessary language is included to avoid problems with probate. We also regularly replace existing financial Powers of Attorney and Health Care Powers of Attorney with our North Carolina versions because they will be easier to use with our local institutions; since they are fairly standard forms they don’t require much time and expense to prepare.
Some clients have a Living Trust as part of their estate plan which is designed to work in conjunction with the Will. In many cases that Living Trust is designed to continue to function under the old state’s law regardless of where the client may live. One benefit of a Living Trust is that it will not be subject to probate or review by the court at the client’s death. In this case, we are not concerned with any special North Carolina language for these documents and we often don’t recommend any changes to a Living Trust simply because of the relocation to our state.
When people relocate to North Carolina, particularly for retirement, they regularly have other revisions to include in their documents which can be addressed at the same time their new North Carolina documents are prepared. For example, if a client is moving to be near one of their children it is common to have that child serve as the primary fiduciary for the client (e.g. Executor or Health Care Agent) and this will often require an update in the documents. There is also the ever-changing landscape of estate tax laws and this too will dictate changes in documents if they have not been revised recently.
If you or someone you know recently migrated to our fair state, be sure this chore is added to the list right along with changing your driver’s license and voter registration and finding a great Chinese food place.