I don’t get asked this exact question all the time, but I do get different versions like: “Can you write a will for my parents?  They live in Wyoming.” or “Can you write a trust for my mother who lives in California?”  Often those asking the questions are clients of mine, who have relatives that live out of state.  The clients are happy with what I have done for them, and they think I did a good job, so they want me to handle the estate planning for their family members.  I am flattered that they would want me to handle the estate planning for their family members, and I love to help where I can, but the fact of the matter is an attorney can only prepare an estate plan in the jurisdiction where the attorney is licensed.  Licensing an attorney is handled on a state level, so an attorney can only practice law in the state where the attorney took and passed the bar exam, and is admitted to practice law.

In most cases, this means an attorney licensed to practice law in one state cannot prepare an estate plan for someone who lives in a different state.  As a general rule, your will should be prepared under the law of the estate where someone is a resident, and not just any state you choose.  The same is true of a financial or medical power of attorney.  The laws of different states can vary as related to wills and financial and medical powers of attorney, so you want to set up those documents under the laws of the state where you reside.  Setting up a trust can provide a little more flexibility, but even then, the state where you live and reside is often the best place to establish a trust.  There are some variances and nuances to where you can set up a will or trust, but the general rule is you want to set up your estate plan under the laws of your state of residence.

 

Your Estate Plan Is Governed by State Law

Estate planning rules are established by the state legislature of each state.  This means that laws can vary from state to state.  The state legislature can establish how a will must be signed and witnessed.  Some states allow for a handwritten will that is just signed by the person who creates a will – such a will can be referred to as a “holographic will.”  Other states require a will to be notarized, so the will needs to be signed in front of a notary.  While other states may simply require a number of witnesses to see a will be signed, some states may provide the option for different methods of getting will signed and notarized.  Each state may have slightly different requirements for the contents of a will.  Some states may want specific distributions, while others may allow for a named representative to exercise discretion in distributions. States may require a person to carry out the instructions of a will be named as a personal representative, or an executor or executrix.  Other states may have different requirements.  The same holds true for financial and medical powers of attorney, each state has slightly different rules and requirements for these types of documents.

An attorney in a given state needs to be familiar with the rules established by the state and every state supreme court that I know of has established that preparing a will is practicing law in the state.  Each state’s supreme court sets up the rules concerning who may practice law in the state and who is licensed as an attorney in the state.  The state supreme courts do not allow an attorney from another state to practice law in a supreme court’s own state without a specific set of requirements to be met.  These can include conferring with an attorney licensed in the state, or applying to be admitted on a limited basis, or there may be other requirements.

An attorney licensed in the state where someone resides is required to be familiar with the rules and laws governing setting up and executing a will and financial or medical powers of attorney, and it is usually best to have an attorney licensed in the state handle an estate plan rather than an attorney from a different state.

 

Trusts Can Operate A Little Bit Differently

If someone from out of state is trying to set up a trust, then the person may be able to pick the jurisdiction they want for a trust.  Different states have different types of trusts, with some states having asset protection trusts that are not available in other states, or some states not allowing a certain type of trust.  I know of one state that does not allow for irrevocable trusts to be created.  I have had clients who want to establish an irrevocable trust to protect assets from long term care costs, but the parents live in a state that does not allow the irrevocable trust to be created.  In such a case, I have had the children who live in Colorado want to establish this type of trust under Colorado law.  Since the children live in Colorado, and they can act as the trustees to be in control of the trust, I can set up a Colorado trust to accomplish this goal, even though a parent lives out of state.  Other types of trust can similarly be set up, even if someone is not a resident of the state where the trust is to be established.  Setting up a trust gives some more flexibility in this case.

Of course, even if you set up a trust outside of the state where you live, you still want to set up your will and other documents under the law of the state where you reside.  And, you also want to check and see if there are restrictions or adverse tax consequences to setting up a trust in a different state, as some states don’t like out of state trusts owning property in the state and can tax such out of state entities differently.  In this case, setting up an out of state trust may work for an out of state resident, but you still want to be careful about setting up an out-of-state plan.  You don’t want to create an estate plan that causes more problems than it solves!

 

Check With An Attorney to See What Is Best For You

If you are looking for an estate plan for a relative that lives out of state, you probably want to check with an attorney in the state where the relative lives to discuss setting up an estate plan.  You can also talk to an attorney who lives in the state where you live who can help you understand if it is possible to set up an estate plan for an out of state relative, or if that is not possible.  An attorney who will give you proper direction is worthwhile to contact, as the attorney who directs you to get the proper assistance you need is the type of good, ethical attorney you seek.  If you would like to discuss whether an out of state estate plan is possible, please click the button below to schedule an appointment.