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Court of Wills, Estates & Probate

The following articles were written by former Probate Judge Merri Rudd.

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State to State Trusts

9:36 AM
Merri Rudd

Editor's note: This column may not be quoted or reproduced in whole or part without express written permission of the author.

Q: For the last year, I have known that I need to set up a trust. I am a 39-year-old, single female who moves every three or four years from one state to another for my career. I'm a Kansas native and expect to retire there if I don't move there sooner. Can I set up a trust with a lawyer in Kansas, or do I need to do it in the state in which I reside? And, if I must do it in the state I reside, must I change the trust every time I move to another state? K.G., Albuquerque

A few years ago, I wrote that trusts and wills are ambulatory. This means that legal documents, such as trusts, can move from state to state.

States usually honor wills, trusts, marriages, contracts, health care directives, and other legal documents from other states. So you should be able to move to a new state without making new legal documents. 

If your trust is created in Kansas or New Mexico, with the correct paperwork, signatures, witnesses (if required), and notarization, then it should work in any other state where you might live.

If you create the trust in New Mexico and then move to Kansas, you might hire a reputable Kansas attorney to review the trust. Any advance health care directives you may have created in New Mexico should be reviewed in Kansas as well. If you create the trust in Kansas, perhaps for peace of mind you could hire a New Mexico attorney to review it.

Trusts are meant to cross state lines, however, and to affect property that may be located in several states. So attorney review in the new state is not mandatory. Even if a trust needs revisions, you do not create an entirely new document. You merely create a trust amendment.

The very important second step after signing a trust is to transfer all of your assets into the name of the trustee of the trust. This includes land, houses, bank accounts, stock accounts, bonds, insurance policies, and other assets. You can even title a car, truck, or recreational vehicle with New Mexico's Motor Vehicle Department (MVD) in the name of a trustee of a trust. Bring a copy of the trust with you to MVD and other institutions to accomplish the transfers.

Assets that have been transferred into the trust pass automatically to the trust's beneficiaries when the trustor dies. If legal title to all assets, no matter where located, is held in the name of the trustee, no court probate proceeding should be necessary. As you acquire additional assets, you should also title those assets in the name of the trustee of the trust.

Review your trust and other legal documents periodically to verify that your choices of successor trustees, beneficiaries, and other wishes are still accurate.

© 2005, Merri Rudd & Albuquerque Journal, All Rights Reserved 

Appeared January 27, 2005, Albuquerque Journal, Business Outlook 
Reprinted with permission

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