Fairfax, VA (Law Firm Newswire) March 31, 2017 – For those considering a change in principal place of residence, at least during the winter months, to one that is located in a warmer climate, it is advisable to engage in financial planning prior to moving.
According to a study conducted by Merrill Lynch in 2014, most people, by age 61, say they have the freedom and flexibility to select where they would most like to live. Life responsibilities, including family and work, often determine where people live in their younger years.
Over one-third of retirees communicated to Merrill Lynch that they have changed their place of residence, and an additional 27 percent foresee moving. The preferred destination for most retirees is the South-Atlantic, followed by the Pacific. But potential snowbirds should first think about which state they would like to be their principal place of residence or domicile. While people can have several residences, they can have only one domicile.
Prominent Vienna, Virginia estate planning attorney Lisa McDevitt says, “Those who are contemplating a change in their domicile should consult an estate planning attorney to make certain that their important documents are in effect in their desired state.”
Choosing one state over another can have several benefits, including no state income tax and tax breaks on income from retirement. In addition, older residents may realize tax breaks on real estate taxes. In addition, estate taxes can be more advantageous in some states than in others.
Since each state has its own prerequisites for proving that a person resides in that state, it is advisable to become familiar with the details. Among the first steps new residents should take are to make changes to their driver’s license, mailing address, and tax return address. A major error that some people make is to have their income tax return go to the incorrect state.
Potential new residents should also confirm whether their financial and estate-planning documents, such as powers of attorney, wills and medical directives, are still lawful according to the laws of the state to which they desire to move.
Lisa Lane McDevitt
2155 Bonaventure Drive
Vienna, VA 22181