Can estate plans with out-of-state property bypass probate?

Mobility and modern family life might create unique real property ownership situations. Perhaps a couple owns out-of-state property. Perhaps a family has separated but not divorced, with spouses living in different states. Perhaps parents purchased a property for their child in a different state.

Each of these scenarios might pose interesting estate law issues. For example, if the estate of a decedent includes out-of-state property, the probate court might determine that it lacks jurisdiction. Even if the individual’s will specifically contained instructions for that out-of-state property, a single probate proceeding in one state may be impossible. Rather, the personal representative or administrator of the estate may be required to open separate probate actions in each jurisdiction where real property is located. 

For readers who regard probate as a costly and time-consuming process, the possibility of multiple probate proceedings to address out-of-state real property may seem ridiculous. At a minimum, our estate-planning attorneys might offer alternatives. It seems clear that a last will and testament may not be the ideal vehicle for clients with property ownership in multiple states. 

One alternative might be to title real property in two or more owners, each with a right of survivorship. That way, the property should pass directly to the surviving owner. A trust might be another option. Both approaches might also avoid the unpleasant possibility of state inheritance or estate taxes. 

Our law firm focuses on estate planning. While we are very familiar with the probate process in California, we also have experience helping to design customized estate plans that allow individuals to bypass probate altogether. Check out our website to learn more about some of these probate-avoidance strategies.

Source: LifeHealthPro, “Dealing with out-of-state property issues in estate plans,” Tom Nawrocki, Aug. 11, 2015

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