A Living Trust Plan for Dual Residency
Many people enjoy splitting their time between two different states. As winter is quickly approaching here, many Connecticut residents spend the winter in Florida. A common question that arises when a person spends time in two different states (dual residency) is: how do you create a living trust estate plan that works as intended when you are not sure where the probate or trust administration will take place?
This is an important issue because the ultimate question of domicile for the purpose of probate and trust administration is not conclusively determined until a person passes away. There are some steps a person can take during life to tip the scale in the direction they want; however, a result can not be guaranteed until it is too late to change it ironically enough.
My first choice when I am confronted with a living trust case that spans two or more states is to create a living trust that works in both states. With this approach, at least my client’s goals will be carried out regardless of where the site of administration is determined. An important part of this approach is involving local counsel from the other state to review and contribute to the Connecticut living trust I have prepared. For example, if there is a possibility that my client’s estate plan may be administered in Florida, it is important that recent changes in Florida’s laws are included in the will or revocable trust I prepared.
Do you have to work with a local attorney to make sure your estate plan works in a different state than where you created it? In most cases the answer is no. This is because competent drafting will establish the site of the trust as the state where it was created. This means that even if there are judicial proceedings in Florida, the court will interpret the revocable trust according to the law of Connecticut. In my opinion this is a band-aid approach and I do not recommend relying on the court of another state to apply Connecticut law.
In addition to the potential difficulties of applying another state’s law, there may also be missed opportunities. Some states have more favorable trust laws than Connecticut (we still have not adopted the uniform trust code by the way). Working with local counsel to provide a complete estate plan gives you an opportunity to take advantage of special provisions that may not be available or less attractive than the law in Connecticut.
An effective estate plan for dual residency is a challenge and an opportunity. Multi-state estate planning can be a can of worms for the ill-prepared and can have unintended or unforeseen consequences to an estate plan that worked perfectly fine in one state. However, if you act carefully you can not only preserve your existing estate plan, but possibly enhance it as well.
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