Out-of-State Real Estate In Your Will

Whether it is a vacation home, a timeshare, investment property, or a piece of land to build on eventually, many people own property outside of the state in which they live. If you plan to leave that property to your heirs, and you simply put it in your will, your heirs may encounter problems. Not only will your will have to go through the probate process where you live, but probate will have to be opened in each state in which you owned property as well (called an “Ancillary Probate”). Probate is a legal process for changing title to the proper heirs of an individual who dies, either with or without a will. As state laws vary, unless you have a will, your principal residence in your home state may be divided one way, while the vacation home, timeshare, or other piece of land may wind up divided differently.

If, for example, you were a California resident who also owned investment property in Las Vegas, your heirs will have to hire an attorney to handle the probate both in Nevada and in California because a court in one state cannot affect title to real property in another state.

Each state also has different rules regarding probate, so you need to talk to an estate attorney in the state where your property is located to find out what your heirs will be faced with should you leave them your out-of-state property. Keep in mind, the real estate is distributed based upon the laws of the state in which the property is located.

The two common ways to avoid the hassle, delays, and costs of probate and the additional “ancillary” probate are either to title your property jointly with your spouse or another individual, or to place the real estate into a revocable living trust.

Either option will keep your out-of-state property from the probate process out of state, saving your heirs time, aggravation and money, as well as the costs, delays and hassles of probate and ancillary probate. If you title your property jointly, the property automatically goes to the survivor. If you choose to set up a living trust, title to your property is transferred to the beneficiaries named in that trust. (See “Relationship Between a Will and a Trust”)

With the help of an estate attorney and some careful planning, you can avoid unnecessary complication for your estate and your heirs.

Case Studies: Securing Out-of-State Real Estate in Your Will

Case Study 1: The Joint Title Solution

Mr. Johnson, a resident of California, owned a vacation home in Arizona. Concerned about the complications his heirs might face after his passing, he decided to explore his options. After consulting with an estate attorney, he chose to title the property jointly with his spouse.

This decision ensured that the property would automatically pass to his spouse without going through the probate process in both California and Arizona. By taking this simple step, Mr. Johnson spared his heirs the time, expenses, and complexities associated with ancillary probate.

Case Study 2: The Revocable Living Trust Approach

Mrs. Anderson, a Texas resident, owned investment property in Florida. Aware of the potential probate challenges her heirs might encounter, she sought advice from an estate attorney in Florida. The attorney suggested creating a revocable living trust and transferring the real estate into it.

By doing so, Mrs. Anderson ensured that the property would be distributed according to the provisions of the trust, without the need for probate or ancillary probate in Florida. This strategic move saved her heirs considerable time, money, and hassle.

Case Study 3: Exploring Alternative Estate Planning Methods

Mr. Martinez, a New York resident, owned a timeshare in Hawaii. Concerned about the complexities of out-of-state probate, he decided to explore alternative estate planning methods.

With the assistance of an estate attorney familiar with both New York and Hawaii laws, Mr. Martinez considered various options such as joint ownership, living trusts, and other strategies tailored to his specific situation. By working closely with his attorney, he was able to develop a comprehensive plan that minimized the potential complications for his estate and provided peace of mind.