These are the top five reasons why you should update your estate plan upon moving to Delaware.
Reason No. 1:
Revocable Living Trusts
Many people have estate planning goals that cannot be accomplished through a Will alone.
In Delaware, proper use of a Revocable Living Trust provides many benefits:
• Overall, it avoids the time, paperwork, and expense of probate.
• It eliminates many filing fees and the closing cost fee, which is 1.25 percent in Sussex County and 1.75 percent in Kent and New Castle counties.
• It provides increased privacy because its terms are never made public and no newspaper advertisement is required.
• It eliminates delays in final distributions to the named beneficiaries.
The maker of a Revocable Living Trust maintains full control of the Trust until death, at which time one or more trustees are charged with ensuring that the terms of the Trust are observed and enforced.
Please note that in order to take advantage of the benefits listed above, it is vital that assets be retitled in the name of the Trust during the grantor’s lifetime.
Reason No. 2:
Distribution of Real Estate
If a Will disposes of real estate, then it passes immediately to the beneficiaries upon the testator’s death. All of the beneficiaries, including minors, immediately become owners of the property. This can create significant inconveniences and increased legal fees should the property need to be sold.
On the other hand, real estate that is titled in the name of a Revocable Living Trust can remain in the Trust, without passing to the named beneficiaries, for as long as necessary after the grantor’s death. If the property needs to be sold, then the Successor Trustee can do so without the beneficiaries’ involvement.
Please note that in order for a Revocable Living Trust to control the disposition of real estate upon the grantor’s death, the grantor must transfer title of the real property to the Trustee of the Trust during his/her lifetime. This requires an actual transfer of title by deed.
Reason No. 3:
In order for any estate planning document to be valid, the necessary formality requirements must be complied with. Since the required formalities vary from state to state, having an attorney review your current estate plan upon moving to a new state is very important. Many complications and delays could arise upon your death if your documents do not comply with the laws of the new state. Furthermore, it is always recommended to have your estate plan reviewed at least every three years to ensure that everything is current and in compliance with existing state laws.
Reason No. 4:
Powers of Attorney
On Oct. 1, 2010, the law governing Powers of Attorney in Delaware was substantially changed. As such, it is vital that any Power of Attorney executed after that date be in compliance with all of the new requirements. Among other things, Delaware law now requires every Power of Attorney to be accompanied by a Principal’s Notice and an Agent’s Certification. The formalities for executing a Power of Attorney have also changed.
Even if your current Power of Attorney is valid, it is recommended that you execute a Power of Attorney that is compliant with Delaware law. That way, you are certain that your Agent will have no problem using the Power of Attorney when acting on your behalf.
Reason No. 5:
Health Care Directives
If you are just moving to Delaware, it is recommended that you execute an Advance Health Care Directive that complies with the laws of the State. This estate planning document allows you to make a written declaration directing the amount of medical treatment you wish to have if you are declared permanently unconscious or terminally ill by two doctors. Due to the importance of an Advance Health Care Directive, it is vital that it complies with the requirements of Delaware law.