Two weeks ago I received a question from “J.D.”, who has a young
family to protect. Still, he and his wife have delayed making any estate
plan because they anticipate that their jobs will relocate them in the
next few years. J.D.’s brother has encouraged them to move forward
regardless of the likelihood of having to relocate.
column focused on the portability of various estate planning documents.
Any relocation within the state of Texas causes no issues at all; legal
documents created in any Texas county are valid in all other Texas
counties. I also introduced the idea of a Mobility Trust as a flexible
approach that can offer benefits to many families who face relocation for
Some of the benefits of a Mobility Trust are:
1) The ability to relocate easily from
state to state. When written properly by a CELA, Mobility Trusts allow you
to relocate without needing to recreate the trust in your new location.
The correctly written Mobility Trust contains provisions that allow it to
adapt to the laws of whatever state to which your work relocates you. It
is written to follow you wherever you may move.
Avoidance of probate. If either spouse dies, the estate does not
need to go through probate if you have allowed the trust to hold title to
your property. If you own a house, you do so in a manner which lists the
trust as owner. When you relocate, you might keep that house as a
rental/investment property while you buy a new residence in your new
state. If you later die, the Mobility trust allows you to avoid probate in
both of the states where you own real estate.
Protection of your family. The Mobility Trust can protect your children by
selecting guardians who will raise them if both their mother and father
were to die. It can protect your children by holding their inheritances,
allowing a responsible adult of your selection to manage for the children
until they have reached maturity. The trust can additionally be named as
the beneficiary of your life insurance and retirement plans, to be sure
that there are funds for expenses that may be faced while your children
grow to adulthood.
In addition to freedom of movement, the
Mobility Trust allows you and your spouse to adapt to future needs. It is
revocable if you ever have reason to select a different estate planning
approach. It can be amended if your family structure changes (if you have
more children, if your children grow up and become parents, if your estate
grows large enough to be concerned about federal estate taxes, etc.). You
and your spouse can be Cotrustees of the trust. The Cotrustees can
purchase new assets within the trust, and sell assets that are owned by
the trust. Cotrustees can spend funds held in the trust in whatever manner
is most beneficial.
If you become disabled, the trust can manage
your financial affairs on your behalf. You should always select alternate
trustees who are familiar with your family and your goals, and who can
step-in if you die or become disabled.
The contrast is stark. You
can procrastinate, but if you die without an estate plan then your family
will suffer. Their expenses will be far higher in the absence of an estate
plan, and their heartache will only be magnified by having to face
otherwise avoidable legal hurdles. Or you can be proactive, and visit a
CELA as soon as possible. Any crisis can be anticipated and the hard edges
can be softened. You can protect your family and save money with a solid
estate plan like a Mobility Trust. Though your work may relocate you, you
can still protect your family if you take action now.