Is My California Trust Good in Nevada?
In 2019 approximately 100,000 people moved from the Golden State to the Silver State. It’s little wonder that one of the most common questions we’re asked is whether a living trust, prepared in California, is valid in Nevada.
A California trust is valid in Nevada if the trust was valid when created in California. The issues, arise, however, when a California trust references California law. Most, if not all trusts we see from California contain numerous references to the California Civil Code (abbreviated Cal. Civ. Code). This can be problematic a Nevada lawyer later assists with the administration of the trust. Things can become especially complicated if a Nevada court is called upon to resolve matters relating to the trust.
Although state courts can apply the law of other states, Nevada courts and lawyers will be less familiar with the laws of the foreign jurisdiction. If the trust ever ends up in front of Nevada lawyers and judges, you’d be better off if it references Nevada law. The Silver State has laws that are favorable for the administration of trusts and the inclusion of California law will only cause uncertainty and confusion.
Additionally, if the trust receives income, it may be wise to slam the door on the California Franchise Tax Board by making it clear in the situs of the trust (place of administration) is Nevada and Nevada law applies.
Likewise, powers or attorney, advanced directives, and other estate planning documents generated out of state, which reference foreign law, may lead to problems downstream. Some banks and other institutions may insist that the document be in the form prescribed by Nevada law and contain references to Nevada law. Also, doctors may flinch when they see a foreign power of attorney for medical decisions or advanced directives.
In our experience it is generally easier and less time consuming to restate a foreign trust using a Nevada form rather than attempting to amend the entire trust agreement page by page. The terms of the trust, including beneficiary designations can remain the same or updated. The restated trust will be Nevada friendly and any attorneys or judges that come into contact with the trust won’t be asked to work with California law or be confronted with sticky conflict of law issues.
The Living Trust Source, Reno Nevada strongly recommends that if you have a living trust (or will), and are moving from California to Nevada, have your estate planning documents reviewed by a Nevada estate planning attorney.
Attorney at Law
1Source Law & Living Trust Source