« Elections and the Markets: Better returns on the horizon? | Main | Five Secrets to Success: Tips for Interns, New Graduates, & Ambitious Young Professionals »
Wednesday
Jun202012

Ancillary Probate: Turning a Dream into a Huge Headache

DateWednesday, June 20, 2012 at 8:00AM | AuthorJulie E. Hall, CFP®

 Many of us plan, and some of us dream, of having that cottage on the ocean or a beautiful lake somewhere.  When the planning and dreaming come to fruition, sometimes that dream cottage is not in the state where your primary residence is located.  While living, owning a cottage in another state can be a real adventure, full of years of enjoyment. But upon death, owning real estate in another state could create a unique un-planned adventure for your family through multiple state court systems.  When you own real estate or tangible personal property in several different states, the laws of the state where the property is physically located will govern what will happen with the property after you die, thus leading to ancillary probate. 

What are the main drawbacks of ancillary probate? 

Assuming you have basic estate documents: You have the added cost of having to administer more than one probate estate, including multiple court fees, accounting fees, and attorney fees. 

 Assuming you do not have any estate documents: This is considered an intestate estate, meaning you die without a will and testament (this is not a good situation).  When you die intestate, you are subject to state intestacy laws and they are different in all 50 states.  This means heirs of property in one state may not be heirs of property in another.

Following are some ways to avoid ancillary probate:

  1. Title property in the name of your revocable living trust (highly recommended)
  2. Title property in the name of a business entity
  3. Use a TOD or beneficiary deed
  4. Use a life estate deed
  5. Title property in joint names with others
  6. Title property in joint names with your spouse

Consult with your financial planner and estate planning attorney to make sure that you enjoy the living adventure with your out-of-state cottage and make sure your family does not have to go through the unplanned adventure of ancillary probate!

 

You should discuss any tax or legal matters with the appropriate professional.

| Print ArticlePrint Article | | in