Spouses who reside in separate states will need to understand the different estate planning laws that govern each state. There may be benefits to living, and dying, in one state over another and these considerations need to be discussed with your estate planning attorney as soon as possible.
We know this may be a confusing topic. Let us begin by sharing a few of the inconsistent laws governing probate and trust administration in each state.
First, Florida’s Constitution states that surviving spouse or a minor child of a deceased spouse is entitled to no less than a life estate in any property used as a homestead by the deceased spouse in Florida.
It does not matter that the surviving spouses or child resided in another state when his or her spouses or parent died while domiciled in Florida. The election does not reduce what the spouse receives if the election were not made and the spouse is not treated as having predeceased the decedent. The surviving spouse of a person who died domiciled in Florida has a right to a 30% elective share of the estate of the deceased spouse valued as of the date of death plus a family allowance of up to $18,000 payable in lump sum or installments and tangible personal property including household furniture and appliances valued up to $20,000.
It is important to understand that state, federal, and territorial homestead exemption statutes vary. Some states, such as Florida, Iowa, Kansas, Oklahoma, South Dakota, and Texas have provisions, if followed properly, allowing 100% of the equity to be protected. Other states, such as New Jersey and Pennsylvania do not offer any homestead protection.
A major estate planning problem arises when one of the spouses are domiciled in what is commonly referred to as a community property state. Examples of community property are states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
In community property states, each spouse has the right to determine who receives all of his or her separate property and one-half of the community property. If the deceased spouse leaves assets to children of a prior marriage, or to any beneficiaries other than the surviving spouse, or to a trust for the surviving spouse, property characterization is significant because that distribution must be taken from the deceased spouse’s separate property or one-half community property interests, not from the surviving spouse’s interests.
The key to successfully planning when you and your loved one have more than one home in multiple states is to plan forward with your estate planning attorney. Your estate planning attorney has the experience and depth of knowledge to guide you through the process in each state and help you create the right plan for you needs. We encourage you not to put off learning what you need and schedule a meeting with one of our experienced attorneys today.