Home » Estate Planning » Are You Relocating When You Retire? If So, Update Your Estate Plan
If you have worked hard all your life, saved and invested what you earned, it’s now time to retire. Like many retirees, you may decide to relocate to a different city, state, or even country. The Harrison estate planning attorneys at the Law Offices of Kobrick & Moccia explain why you relocating for retirement should trigger an update of your estate plan.
Why Is Updating My Estate Plan Important?
All too often, people go to the trouble of creating a comprehensive estate plan, then completely forget about the plan. In fact, failing to update an existing plan is one of the most common, and potentially most detrimental, estate planning mistakes. As both your family and your estate grow, you need to account for that growth in your estate plan. Beneficiaries need to be added when you marry or become a parent. Fiduciaries need to be considered as current ones age. Additional tools likely need to be added to your plan to help achieve additional goals, such as asset protection, long-term care planning, and probate avoidance. There are several common life events that should trigger a review and revision of your estate plan. Relocating for retirement is among those life events.
Are You Relocating for Retirement?
Seniors decide to relocate when they retire for a variety of reasons. For some, being close to adult children and grandchildren is a strong motivation for relocating. For others, the high cost of living couple with a lower fixed income makes staying where they are unrealistic. A recent study conducted by Wallet Hub ranked New York 40th overall and 46th in the sub-category of “affordability.” Many retirees choose to relocate outside the U.S. because they can get so much more for their retirement dollar in other countries. Regardless of the reason for your decision to relocate, once you have made that decision it should be followed with an update of your estate plan.
Why Does Relocating Trigger the Need to Update My Estate Plan?
Your estate plan should be reviewed and updated around the time you reach retirement age anyway. If you are also planning to relocate, you simply have an additional reason to update your plan. When you retire, your financial picture will almost surely change. You might decide to sell, or cash in, investment assets or begin accepting distributions from retirement accounts. You will likely lose your employer sponsored health insurance, prompting the need to consider long-term care planning. Your children are grown, meaning you no longer need to protect their inheritance. All of those changes that tend to occur when you reach retirement age should warrant a review of your existing plan. If you add in the fact that you also plan to relocate, you should be motivated to take the time necessary to update your estate plan to ensure that it reflects your current life. To start with, if you relocate to another state – or country – it is imperative to determine how the laws in that state or country will impact your existing estate plan. If you have a funeral component in your estate plan, you may need to make changes to that to account for the fact that you have moved as well. Purchasing real estate in another state/country must also be taken into consideration within your estate plan. Owning real estate in more than one state could require more than one probate process while owning real estate in another country may require a totally new estate plan. Failing to plan for things like this could result in your estate being tide up in probate for years.
Contact the Harrison Estate Planning Attorneys
Please feel free to download our FREE estate planning worksheet. If you have additional questions or concerns regarding the need to update your estate plan when you retire, contact the Harrison estate planning attorneys at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.
Anthony Moccia is an attorney and partner at The Law Offices of Kobrick & Moccia.His practice focuses on estate planning and elder law.He is a member of the New York State and Nassau County Bar Associations.He frequently presents free seminars on wills & living trusts to area residents and his seminars are said to be “informative, entertaining & easy to understand.”
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FAQs
Many people are not aware of New York's relatively short statute of limitations when it comes to the administration. Administration of an estate. There is a 3-year time limit to settle an estate in NY. Though there are exceptions and stipulations that could extend the deadline.
What are the two general situations that an estate plan lays out? ›
An estate plan lays out how you want your assets handled at your death or when you're physically or mentally incapacitated. No wonder most people procrastinate creating one. “It's shocking how many people don't have their documents in order,” says Bruce Tannahill, a director of estate planning with MassMutual.
Is estate planning not an essential part of retirement planning? ›
In addition to investing, estate planning is a crucial component of your retirement planning. Many people ignore succession planning or put it off until the last minute.
When should you start to think about retirement and estate planning? ›
Get Started on Estate Planning as Early as Possible
No matter if you are the breadwinner in a high-asset family with children and grandchildren or a recent college graduate with your first job, there are good reasons to consider what will happen to your family's financial health if you pass away.
How much does the executor of an estate get paid in New York? ›
The commission rate in New York for each Executor is 5% on the first $100,000 in the estate, 4% on the next $200,000, 3% on the next $700,000, 2-1/2 % on the next $4,000,000 and 2% on any amount above $5,000,000.
How long does an executor have to distribute assets in NY? ›
If an estate tax return is required, the total probate process will usually take between 18 months to 3 years. You, as executor, may not distribute to the heirs until you've received a closing letter from the tax authorities, which may take several months or even years.
What is the most important decision in estate planning? ›
A will or trust should be one of the main components of every estate plan, even if you don't have substantial assets. Wills ensure property is distributed according to an individual's wishes (if drafted according to state laws). Some trusts help limit estate taxes or legal challenges.
What is an advantage of having an estate plan? ›
A key advantage of an estate plan is its power to minimize the probate process and its expenses, delays, and loss of privacy. Charitable giving and business succession can be incorporated into an estate plan.
What is the difference between estate plan and succession plan? ›
The surviving co-owners can sometimes feel imposed upon for working longer hours, having more responsibilities, and/or having the added expense of hiring someone to pick up the deceased owner's duties. Estate Plan = Ownership of the business is left to heirs. Succession Plan = Co-owners carry on management.
Are retirement accounts part of an estate? ›
Do retirement accounts pass through probate? NO, as long as the beneficiaries are properly designated. Keep in mind that if the will stipulates anything about such accounts, the named beneficiaries take precedence over the will and the assets will be distributed to the named beneficiaries on the accounts.
Retirement accounts aren't considered part of an estate provided the account holder ensures that beneficiary designations are properly filled out.
What is the 4 rule in retirement planning? ›
The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.
What is the best month to take early retirement? ›
Retire early in the year if…
You have a pension plan that provides an additional year of service credit on January 1, credits that are used to calculate the size of your pension payout. By waiting until the new year to retire, you might also receive a cost-of-living increase.
What does Suze Orman recommend for retirement? ›
Orman says 10% of your salary is the minimum amount you should put in your 401(k), and she says 15% is a smarter target. If you're not putting in 15% yet, raise your contribution by 1% per year until you get there. Vow to use half of a raise for retirement.
What time of year is best to start retirement? ›
The very beginning or end of the year - If you don't have access to a healthy cash reserve that could cover multiple years, this might be a good option. When you do this, you're not pulling money out of your retirement account when you could be put in a higher tax bracket with earned income.
How long does an executor have to sell a house in NY? ›
There's no deadline by which you must sell a house after someone dies. However, the sooner the better, because as more time passes, more problems come up with the property, the family, the long probate process, or all of the above.
How does an executor close an estate in NY? ›
CLOSING THE ESTATE:
FORM 207.42 must be prepared and executed by the fiduciary and the attorney and filed after 7 months or by the end of 2 years from the date of fiduciary appointment. RELEASES from all beneficiaries of the estate must be executed and filed at this time, if not already filed.
Can executor sell property without all beneficiaries approving in NY? ›
Under New York law, an executor has the electricity to sell an actual property without acquiring the consent of all beneficiaries. This authority is granted through the Surrogate's Court, which oversees the probate process.
Is there a time limit in the settlement of the estate? ›
Simple estates might be settled within six months. Complex estates, those with a lot of assets or assets that are complex or hard to value can take several years to settle. If an estate tax return is required, the estate might not be closed until the IRS indicates its acceptance of the estate tax return.
