Did you know that the estate planning process can be more complicated if you own real estate in different states? This can be due to each state’s probate court only having authority over property located in their own state. Thus, if you are a Florida resident and own a home in Florida, a Florida probate court can oversee that property’s transfer to your heirs, but it cannot do anything about your timeshare in Hawaii or your mountain vacation home in Colorado. The properties in those states will have to go through an ancillary probate process in the states where they are located. Your personal representative may have to travel there, and you may need a lawyer in each state.
There may be several ways to avoid complicated, lengthy, and expensive probates in multiple states. For instance, you can consider:
1. Owning the property jointly with your spouse, with a right of survivorship. This can allow the property to pass directly to your spouse without probate and without a specific gift in your will.
2. Setting up a revocable trust and putting your real estate in the trust. Your property will pass according to the instructions in the trust, without going through probate. In some states, this can also minimize estate taxes and probate-related expenses.
3. Setting up an LLC and putting your real estate into the company. While an LLC may not avoid probate in the state where you are domiciled, it removes the property from your estate directly. Instead of owning real estate, you now own a business, and the business can pass pursuant to the instructions in the operating agreement. This can be a great solution for property that is part of a family business, like a farm, or rental properties.
It is important to consult with a knowledgeable estate planning attorney about these options. Our office can evaluate the laws in the states where you own property and help you select the right solution for you and your family. Please contact our office to schedule an appointment.