Recently, I met with a longtime client of mine who told me that he and his wife are thinking about moving out of state to be closer to their daughter and grandchildren. He wanted to know what issues he should be considering in deciding whether to make the move or not. I thought I would share with you some of my thoughts on this issue.

As I told my client, what he wants to do is not unusual and it’s a decision that many parents and grandparents face. Before I discussed the legal and financial issues I first told him that my experience has been that the great majority of these situations end up in one of three ways. The first is that everything goes according to plan and they get to spend more time with their family. They get to see their grandchildren grow up and, at the same time, have someone to help them if needed. The second situation I have seen many times is that after the move for whatever reason, whether it is job related or for some other reason, the kids move. As a result, the parents are in the position of either having to move again or stay in an area where they do not have any family and friends or a support network. The third situation that I have seen is that the grandparents become quasi caretakers and permanent babysitters for the grandchildren. Although some grandparents may like this; others do not. Therefore, I told my client that he should explore these issues prior to making his decision. Of course, things happen that people don’t have control over such as relocation of a job; however, these are issues that at least should be discussed.

From a financial standpoint, I told my client he needs to determine what his cost of living will be in the new location. You cannot assume that costs are the same everywhere throughout the country. For example, if he moved to Southern California or New York City, his cost of living would be substantially higher than it would be here. It is important to take cost of living into consideration because what some people may find is that if they move, their lifestyle may have to be significantly changed. After all, housing and medical expenses are significantly different throughout the country.

Another thing you need to take into consideration is taxes. Federal taxes are basically going to be the same no matter where you are; however, state and local taxes may be significantly different. For example, in states like Texas and Florida there are no state income taxes, while other states such as New York and California have significantly higher taxes. Therefore, in reviewing what your new cost of living will be, tax considerations are important.

From a legal standpoint, I told my client that it is important to update their voter registration and driver’s license. In addition, it’s important for them to have their estate planning documents reviewed by a local attorney. You may find that your will, along with medical and durable power of attorneys, need to be adjusted.

Wanting to be closer to family as one ages is natural. However, the decision isn’t that easy. Not only do you have to consider what your new lifestyle will be, but also, how you will feel leaving friends and your current lifestyle behind. For many people that is not easy. In addition, you can’t ignore the financial ramifications. You don’t want to pick up and move only to find out you cannot afford to maintain your lifestyle.

Deciding to pick up and leave is a very difficult and tough decision. That is why it’s important that you don’t rely only on your heart to make the decision.

Good luck!
If you would like Rick to respond to your questions, please email him at Rick@bloomassetmanagement.com.