Special Considerations For Snowbirds: Estate Planning For Part-Time Florida Residents

For residents of northern states, one of the perks of retirement after years of hard work and snow shoveling is the ability to retire to Florida. Not everyone wants to retire to Florida full-time, though. Those of you who travel back and forth between Florida and another state are often referred to as snowbirds because you typically head south before the snow falls and return to your northern home after the final snowfall melts — much like the birds who migrate every year. This allows you to enjoy comfortable temperatures and sunny weather all year. However, it also gives you occasional legal issues. This is particularly true when it comes to estate planning. While it is nice to own homes in multiple states and to be able to enjoy the freedom of going back and forth, it can also complicate matters upon your death or in a medical emergency. At Loughlin Law, P.A., we may be able to guide your estate plan to ensure that there are no legal tangles for your family to deal with when you die or are incapacitated. Call (561) 677-8384 to schedule a consultation and learn more.

Potential Problems With Estate Planning for Snowbirds

While there are plenty of perks and benefits for snowbirds who travel between two or more states during the year, there are also potential legal pitfalls, particularly with estate planning. Estate planning includes not only an individual’s wishes for how their lifetime of assets should be distributed among their heirs, but also documents naming someone to make financial or healthcare decisions in the event the individual cannot make those decisions themselves, and documents outlining their wishes for healthcare in what may be their final days. If any of these components of an estate plan are not handled properly, the family left to sort it all out may face many legal battles.

Multiple Probates

If an individual owns property in more than one state, the family could be required to probate the death in each state in which the individual owned property. Typically, this applies to real estate, but depending on the value of those assets and the laws of that state, even owning smaller assets such as motor vehicles, bank accounts, or retirement accounts in another state could require probate.

Probating a death in two or more states means more time and money must be invested into probate, which is already a lengthy and expensive process. Additionally, it may mean that someone must travel to other states to handle probate, adding even more time and expense. Jurisdiction for probate may also need to be established, which may not be easy for the family to do if they do not know the individual’s legal state of domicile.

Legal State of Domicile

Probate jurisdiction, or the state in which the individual’s estate must be primarily probated (additional state probates are ancillary probates), is determined by the individual’s legal state of domicile. This is a fancy way of saying it is determined by where the individual legally lived. While snowbirds travel back and forth between multiple states, only one is considered their primary residence, or their legal residence. For many, their legal state of domicile remains their northern home, with the residences in additional states being considered vacation homes or secondary residences. However, some snowbirds do consider Florida to be their legal state of domicile, or primary home, with their northern home becoming a secondary home.

If it is unclear to the family or to the probate court which state is the deceased’s legal state of domicile, this can draw out the probate process while this is sorted out. In the meantime, any assets being passed through a will or, if there is no will or trust, through intestate laws, will not be distributed and any creditors may not be paid until the issue is resolved.

Healthcare Disputes

If there are conflicting directives in different states, or the directives are kept in only one state, an individual’s family may disagree on treatment or financial matters. These disagreements could delay treatment if the family has to go to court to get a judge’s decision on who should be making decisions or which option to put into motion.

Additionally, the disputes families may have as a result of missing or conflicting directives have the potential to drive deep wedges of resentment, bitterness, and anger between family members. Most people do not want their loved ones driven apart because they disagree over how to handle treatment options for a healthcare crisis or whether to sell an asset to help pay for treatment.

Long-Term Care Issues

Unfortunately, as people age, they may need to have long-term care due to issues like dementia or other chronic care issues. For snowbirds, the consideration of where to get that care must be addressed. In addition to the expense associated with long-term care, they must also consider each state’s Medicaid five-year lookback period if they may need to rely on Medicaid to pay for such long-term care.

Cost and eligibility requirements are not the only considerations for long-term care, however. Individuals may also need to think about which state may be better for their overall health (for example, dementia patients may do better in the more familiar surroundings of their northern home state while someone suffering from fibromyalgia, which would be exacerbated by cold and damp weather, who also has dementia, may do better in Florida). They may also need to consider where their family is located, whether that family intends to visit, and other factors that are unique to their circumstances.

Estate Litigation

Snowbirds have homes and assets in at least two states and sometimes more. If their estate planning does not take this into account and address these spread-out assets, it could lead to estate litigation, also known as probate litigation. As the family argues over which state has jurisdiction over probate, which estate plan is valid and effective, and who should handle what, the estate is left to wait, potentially paying a variety of expenses that eventually begin eating away at the assets.

Estate litigation, or estate administration problems, will cause higher probate expenses, convoluted and long probate proceedings, and serious family disputes. In some cases, the litigation or problems with the estate administration can ultimately liquidate the estate so that by the time matters are resolved, there is nothing left to probate and the family receives nothing.

Sole vs. Co-Executors

Individuals must name an executor, or personal representative, for their estate that meets the state’s eligibility requirements. For a Florida estate, the personal representative must be at least 18 years old and a resident of Florida. If they are not a Florida resident, they must meet one of the qualifications of FL §733.304. Because each state has its own requirements for being an executor, snowbirds may want to consider having co-executors rather than a single executor.

Another reason to consider co-executors with one in each state is practicality. Executor duties may include in-person property inspections or have filing requirements that can be managed more easily on location. Instead of naming a sole executor who must travel back and forth and try to keep everything organized, naming co-executors with one for each state in which there is property to be probated may make handling these and other practical matters easier.

Solutions to Snowbird Estate Planning Issues

While snowbirds do face some unique estate planning issues as a result of their multi-state residency, they also have options that may allow them to avoid or resolve these issues. However, individuals should remember that every estate plan will be unique, which means that not every solution will be suitable. They are all good places to start and should be explored with an estate planning attorney at Loughlin Law, P.A. to determine which ones may work for your needs.

Choose Your State of Legal Domicile

Because probate jurisdiction is determined by the deceased individual’s state of legal domicile, snowbirds should deliberately choose a state to call their legal residence and make sure that their family is aware of which state they have chosen. Whether this is the northern state where they have lived for years, or Florida because they spend more time here than their northern home, this decision will also ensure that an estate planning attorney will be able to assist in creating an estate plan that is compliant with the laws of the chosen state.

The main things an individual must do to establish their legal domicile is to demonstrate their physical presence in a state and the intent to make that state their home. Physical presence is demonstrated by being physically present in the state for a significant period that makes clear it is not a temporary visit. The intent to make that state their home can be indicated by such actions as:

• Obtaining a new driver’s license
• Registering motor vehicles
• Registering to vote
• Buying or renting a home
• Opening bank accounts
• Changing the individual’s mailing address
• Updating important documents with the new mailing address
• Seeking medical and other professional services
• Filing a resident state income tax return (if the state has state income tax)

Establish a Revocable Living Trust

For snowbirds who would prefer to avoid probate, establishing a revocable living trust may be an option. Because trusts do not go through probate, they have several benefits. First, without probate, the trust allows instant control and access of the assets it contains, within the trust’s terms. This can mean quicker access to the assets than probate would allow. Because the trust does not go through probate, there is also no need to establish jurisdiction. The trustee only needs to comply with the trust’s terms.

Additionally, avoiding probate allows the individual to maintain privacy. Probate makes a public record of the deceased’s name, the assets probated, and the names and contact information of the beneficiaries. Trusts allow all this information to remain confidential unless someone chooses to share details. Finally, a trust can minimize or possibly eliminate many estate administration costs. For example, FL §733.617 provides that a personal representative is entitled to compensation for carrying out their duties. This compensation is computed as a percentage of the estate’s value. They can also receive additional compensation for carrying out additional duties that are considered extraordinary. However, per FL §736.0708 provides that the trust grantor can set the trustee’s compensation in the trust’s terms and if they do not, the court can order reasonable compensation. This can significantly reduce the expenses associated with the estate, as the trustee’s compensation is not based on the estate’s value, but instead set by the grantor or the court based on the duties the trustee will carry out.

Complete Advance Directives

Powers of attorney, living wills, and do not resuscitate orders are all advance directives that ensure an individual receives the healthcare they want in the event they cannot speak for themselves when it is necessary. A financial power of attorney gives authority for someone to handle finances on behalf of the principal (the person granting the power of attorney), while a healthcare power of attorney grants someone authority to make medical decisions. Living wills stipulate a person’s wishes in the event of a terminal injury or illness, such as whether they want artificial nutrition or hydration or to be kept alive with machines breathing for them. Do not resuscitate orders indicate that an individual does not want to be revived if they suffer cardiac or respiratory arrest. While none of these documents are legally required, individuals should give careful consideration to each document.

By completing these documents, individuals can ensure that their family and their healthcare providers understand their wishes. By naming a power of attorney and outlining their wishes, individuals can reduce or eliminate family arguments by clearly identifying who they want to make decisions and what those decisions should be. Additionally, if the individual wishes to name a different power of attorney in each state (for example, they might want to name their daughter who lives in Florida as power of attorney in Florida while their son in their home state of Minnesota has power of attorney in that state), an attorney can assist with ensuring the validity and effectiveness of each document. They can also assist with ensuring the documents are cohesive across all states, so that anyone named as power of attorney understands their role. If the individual wishes to name co-surrogates (two or more people) as power of attorney, an attorney can also assist with ensuring clarity regarding whether the co-surrogates must reach a decision by majority or who will have the final say in the event of disagreements.

Keep Multiple Copies of Documents

From wills to advance directives, an estate plan is only useful if the individual’s family can find it when it is needed. Because snowbirds spend a significant amount of time in each of two states, they could die or become incapacitated in either state. Most people do not want to have to remember to grab a bunch of legal files before they make the trip, and loved ones may not be able to travel to another state to search for the appropriate paperwork.

Individuals can make multiple copies of these documents and keep them in secure storage in each state. They can provide copies of powers of attorney, living wills, and do not resuscitate orders to loved ones and healthcare providers in both states. They can inform a trusted loved one in each state about where to find trust documents, wills, and other estate planning documents. Even if the will must be probated in a different state, having a copy of it in each state can provide some peace to loved ones who are overwhelmed with grief while trying to sort out the individual’s estate.

Seek Additional Personalized Solutions

Even single-state residents have unique estate planning needs, but dual-state or multi-state residents have even more unique considerations due to the accumulation of assets in different locations. These special considerations for snowbirds may require personalized solutions that will not be found with generic online searches. Instead, snowbirds should consider consulting with an estate planning attorney to review their circumstances and receive tailored advice and plans that meet their particular needs.

Why Attorney Guidance Matters

Often, individuals are tempted to take a do-it-yourself approach to all or part of their estate planning. They think that since they can find free or inexpensive options online for drafting a will, creating a trust, or appointing powers of attorney or writing a living will, they do not need an attorney’s assistance.

While there is no legal requirement to hire an estate planning attorney for many of these documents, there are reasons to consider hiring one, particularly for snowbirds. A few of these reasons include:

• State Law Knowledge: Each state has its own laws regarding estate planning, and those laws frequently change. An estate planning attorney has a thorough understanding of these laws and stays alert to changes so they can ensure their clients’ plans remain compliant with the laws. An attorney can assist a client with creating and maintaining an estate plan that is legally valid while also meeting the client’s needs and wishes.
• Comprehensive Planning: A skilled estate planning attorney can address all aspects of a client’s estate plan. From avoiding ancillary probate, or avoiding probate in general, to minimizing tax liabilities, an attorney will be able to review the broad strokes of an estate plan while also inspecting the fine details to ensure that every aspect is taken care of.
• Ongoing Support: Estate plans are not something that individuals complete once and then store until needed without further thought. Especially for snowbirds, estate plans need to be reviewed and updated whenever circumstances warrant it. They also need to be reviewed and updated whenever state laws change. As an individual’s life evolves, an estate planning attorney can provide ongoing support to ensure that their estate plan remains valid and current.

Additional Considerations for Dual-State Residents

Snowbirds who travel between two or more states have additional considerations for their estate plans. Typically, an estate plan is reviewed and updated every three to five years or when circumstances warrant, such as when there is a marriage, divorce, birth, death, relocation, or asset changes. For snowbirds, who travel between two or more states and have assets in all of those states, reviewing and updating their estate plan on an annual basis is a good idea. This ensures that everything will be current when it becomes necessary for loved ones to locate the estate plan and use it.

Evolving Family Dynamics and Shifting Residency Considerations

Evolving family dynamics, such as births, deaths, marriages, and divorces may impact estate plans. Individuals will want to update their plan as soon as possible after such changes to ensure that their estate plan does not give assets or decision-making authority to someone they do not want to give them to.

Additionally, while snowbirds must decide on a state of legal domicile, shifting residency considerations may also be a factor. Suppose individuals have chosen one state as their legal domicile but the other state’s estate planning laws become more favorable. In that case, individuals may want to consult with an estate planning attorney in both states to determine whether they wish to change their state of legal domicile.

Keep Estate Plan Current

Annual reviews and updates are important, but for snowbirds, other updates may also be crucial. Snowbirds should consider taking some time during the transition from one state to the other to think about what kind of changes have occurred since the last transition and whether any of those changes impact their estate plan. For example, have they acquired or sold any assets? Any significant changes warrant updating estate plans for snowbirds to ensure that there is no confusion for their loved ones regarding what assets they have and where they are located. This can also be important for advance directives, ensuring that the individual’s wishes remain the same and that those named as power of attorney are still alive, healthy, and willing to take on the role.

Consult an Attorney to Learn About Law Changes

Sometimes, changes in state estate planning laws do not apply to estate plans already established, but many times, these changes do apply. Even when individuals live in the same state all year, they may not be aware of changes in the law. Snowbirds may want to consult with an attorney annually to learn about any changes in state laws that may impact their estate plans. Regular reviews can allow individuals to take advantage of new or improved opportunities to protect their assets and ensure that all of their estate planning documents comply with current state laws.

How an Estate Planning Attorney Can Assist You

Everyone’s estate plan is unique, but snowbirds have special considerations due to their dual-state residency. An experienced Florida estate planning attorney with Loughlin Law, P.A. may be able to assist you with determining which state has jurisdiction over probate for your estate, choosing a state of legal domicile, and ensuring that your estate plan is current and reflects your needs. If you have additional questions or would like to explore your estate plan with us, call (561) 677-8384 to schedule a complimentary consultation during your Florida time.