Morris and Elaine, a retired couple from New Jersey, are like many “snowbirds” who split their time between two homes: their primary home in New Jersey and their beachfront condo where they like to soak up the Florida sunshine each winter.
What they didn’t realize is that their Florida property could become a legal headache for their children after they die. Why? Because unless they take the proper steps now, their executor will need to go through the “ancillary probate” process in Florida to deal with the condo, which will be a costly and time-consuming process.
What is Ancillary Probate?
Ancillary probate involves a secondary probate process in any state where the deceased owned assets.
To illustrate this point, in Morris and Elaine’s case, if at the time of their death they are New Jersey residents and they own the Florida condo, their executor would need to open a separate probate case in Florida to be appointed to handle the handle the Florida real estate.
Why is Ancillary Probate a Problem?
- Increased legal fees and court costs
- Additional delays in distributing assets
- Extra burden on your family during an already difficult time
Fortunately, with proactive estate planning, ancillary probate is often avoidable.
How to Avoid Ancillary Probate
If you own property in more than one state, here are some ways to spare your family from dealing with multiple probate courts:
- Revocable Trust: Placing out-of-state real estate in a revocable trust is one of the most effective ways to avoid ancillary probate. The trust holds legal title to the property, so when you die, the trust, not the probate court, controls what happens next.
- Joint Tenant with Right of Survivorship: If you own property jointly with another person as joint tenants with right of survivorship, the property will pass automatically to the other joint owner by operation of law as a non-probate asset, thereby eliminating the need for ancillary probate proceedings. Just be sure this ownership structure fits your overall estate plan and intent.
- Transfer-on-Death (TOD) or Enhanced Life Estate Deeds: Some states, like Florida, allow TOD deeds or “Lady Bird” deeds that automatically transfer property to a named beneficiary at death without going through probate.
- Sell or Gift the Property During Your Lifetime: If the property no longer serves your needs or you’re planning to downsize, consider selling or gifting it to your heirs while you’re alive, when it can be done with proper tax planning. Just be sure to stay aware of any applicable tax implications.
- Consult with a Multistate Estate Planning Attorney: Estate laws vary significantly from state to state. Work with a trust and estates attorney familiar with multistate planning to ensure your documents are coordinated and effective.
Ancillary probate is an often-overlooked complication that can burden families emotionally and financially. If you’re like Morris and Elaine with property in more than one state, take time now to make sure your estate plan covers all the bases — no matter the ZIP code.
Need help reviewing your estate plan or protecting your out-of-state assets? Contact the experienced estate law attorneys at TREEL to schedule a consultation. Call toll free: 833-888-0462
