Out-of-State Property and Probate: What You Need To Know

During a time of grief and sadness, the thought of having to go through probate can understandably bring on additional anxiety and confusion.

And, if your loved one owned out-of-state property, you may now be tasked with dealing with an additional layer of cumbersome paperwork and probate proceedings.

So you may wondering…

How exactly is the probate process handled when a loved with out-of-state property dies, and is it avoidable?

Here’s how it works

The probate process begins first in the deceased person’s state of residence – where he or she made a permanent home, or domiciled. This is known as domiciliary probate.

However, if the decedent owned out-of-state real estate in his or her own name, their passing also results in the need for an ancillary probate process. This is a process that involves a second (or maybe third!) probate court in addition to the one taking place in the state where the decedent passed.

Ancillary probate is opened where the out-of-state real estate is located and is subject to the laws of the jurisdiction in which the property is located.

Here’s an example:

Let’s say Jim owned a home and resided in Connecticut, but also owned a vacation cottage in Maine. Jim’s ownership of the two properties in different states would require that the executor of Jim’s estate deal with both the probate courts in Connecticut and Maine.

And, to take this example a step further, let’s say Jim also had a third property – a condo in Florida. To transfer ownership of the Florida property from the estate to Jim’s designated beneficiary, the executor of the Connecticut estate would have to open an ancillary probate administration in Florida, in addition to the proceedings in the Maine and Connecticut probate courts.

In the example above, the executor of Jim’s estate would first be tasked with obtaining a probate attorney in Connecticut – the primary probate jurisdiction – to settle Jim’s affairs. But then, the executor would also have to find additional probate attorney in the ancillary jurisdiction (assuming the Connecticut attorney is not licensed in Maine and Florida, respectively) to help handle the vacation and condo properties.

And that’s not all. Dealing with multiple probate court proceedings across different jurisdictions also creates more paperwork, would be much more time-consuming, and certainly, would lead to additional costs – not to mention the added aggravation of juggling an estate administration across multiple states!

So, can all of this be avoided if you own a property out-of-state?

The answer is yes, and this is how: Create a living trust.

A living trust enables you to transfer ownership of your assets into the trust, while maintaining complete control over it during your lifetime.

The trust owns the property (or properties), regardless of location, and does not have to go through probate.

Creating a trust eliminates the need for heirs to have to go through the probate process in each state where real estate is owned. And, it certainly makes the estate administration process much simpler!

So, in keeping with the earlier example…

Let’s say Jim owns real estate in both Connecticut and Florida. When drawing up his estate planning documents, he included a trust that transferred his Florida property from Jim to the “Jim Revocable Living Trust.” Therefore, upon Jim’s demise, the property will no longer be in his name and it will eliminate the need and costs of opening up an estate proceeding in Florida.

If you have out-of-state property, save your loved ones the headache of multiple probate processes and additional work. Be sure to create a living trust that includes all your properties. If you need help doing that, give us a call.

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