Moving to a new state requires updating several legal documents.
The process of moving is never simple.
It involves packing and unpacking, purchasing or renting a new residence, and saying goodbyes.
Moving is further complicated when you move to a new state.
According to a recent J.P. Morgan article titled “Changing your state of residence,” those who move to a new state will need to update paperwork for tax and estate planning purposes.
Failing to update documents to reflect your new residential status could cause you to owe more taxes than necessary.
State governments like their tax income and may bring claims against ex-residents who do not fully cut ties.
Your former state of residence will often have a threshold where you must stay outside of it for a certain numbers of days in a year after you move.
Although the number depends by state, it tends to be around 183 days outside of the former state each year.
You should keep records and receipts demonstrating you were outside of the state in case the state government performs a residence audit.
To help yourself pass a residency audit, you need to be thorough when moving to a new state.
What steps should you take?
First, you will want to get a driver’s license in your new state and cancel your previous driver’s license.
Any vehicles should also be registered in your new state.
Your insurance company should also be notified of the new location for your vehicle.
Register to vote in your new state.
If you attend a church or other place of worship, transfer your membership to a new home church.
Once you have done this, begin making financial contributions to this place of worship rather than your former place of worship.
Purchasing a home or renting with a long-term lease will help to establish residence in your new state.
Sell your previous home as soon as possible.
If your new state has a homestead exemption, claim it.
If you had claimed it in your previous state, relinquish the claim.
Update addresses for your financial accounts to your new state of residence.
Sign up for a library card in your new state.
Find a primary care physician in your new state of residence and become a patient.
Get that physical exam you have been putting off.
Update your address, to include your address with the IRS.
Invest financially, socially, and economically in your new state of residence.
Finally, you should update your estate planning documents when moving to a new state.
Not all states have the same estate planning or tax laws.
The laws in your new state may be more favorable than your former or there could be tax traps that are not obvious to the untrained eye.
You should work with an experienced estate planning attorney within the new state to ensure your plan satisfies the legal requirements of your new state residence.
Consider it one of the “costs” associated with your move itself.
Reference: J.P. Morgan (July 22, 2021) “Changing your state of residence”