If you die with or without a will and your estate includes property outside New York, your loved ones must go through a separate probate proceeding in each state where the property is located. This is known as ancillary probate, which can be expensive and time-consuming.
Probate laws vary by state, and courts in one state cannot oversee property transfer in another. This complicates settling your estate, potentially creating additional red tape for your beneficiaries. Here are some effective strategies to avoid ancillary probate.
Transfer ownership to a living trust
Placing your out-of-state property in a revocable living trust ensures the assets pass directly to your beneficiaries without probate while you still retain their ownership and control. The trustee you appoint can manage and distribute the trust assets to the beneficiaries according to your wishes without going through a court process.
Own property jointly with rights of survivorship
Owning property jointly with someone else, such as a spouse or family member, with rights of survivorship means that ownership automatically transfers to the surviving owner upon your death. This avoids probate, but it’s crucial to set up joint ownership correctly to ensure it aligns with state laws.
Consolidate your estate
Consider selling the out-of-state property if it no longer serves an important purpose. Consolidating everything in your resident state eliminates the need for ancillary probate.
Complying with state-specific laws is crucial when estate planning for your out-of-state assets. Mistakes could trigger ancillary probate or lead to other unintended consequences. It amplifies the need for qualified legal guidance to help protect your interests, minimize stress for your loved ones and create a legacy that reflects your intentions.