Owning a property in another state might be a good thing when you are alive, but when you pass away, it becomes a huge issue.
Ancillary probate is the process that helps you distribute this out-of-state property to your family. This means that you have to come up with two probate processes, the primary one in New York and the second one in the state where the property is located.
The Challenges of Ancillary Probate
Having another probate process isn’t an issue, especially when it works in your favor. However, the process comes with additional costs and delays in managing the estate. The beneficiaries might have to wait just a little bit longer to get their fair share of the property.
The costs are high because the executor has to get another lawyer in the state where the property is located. This lawyer charges a fee for accounting and filing of petitions. The attorney fees in the other state might not be similar to what you pay your probate lawyer in New York. Try and research to find the median cost of working with the lawyer in the other state before you proceed.
Ancillary probate without a will can become complicated and confusing to the layman. While the laws of New York might be lenient when you don’t have a will, the laws of another state might not work the same way.
On the other hand, the existing will that over in the other state might name different beneficiaries than the ones in the will in New York, leading to conflicts and delays.
Ways to Avoid Ancillary Probate
With these drawbacks, you must avoid ancillary probate as a will-maker at all costs. Here are the top ways you can do this.
Transfer the Title to Beneficiaries
You can avoid ancillary probate by adding your beneficiaries as co-owners of the out-of-state property. Additionally, come up with accounts that allow the property to be passed on to the beneficiaries when you die without going through probate.
Transfer on Death (TOD) Accounts
When opting for a TOD, consider the laws of the state where the property is located to know if this clause applies or not.
If the clause exists, come up with a TOD deed that tells the executor to transfer the estate to the beneficiaries when they pass away.
However, you can manage the property, sell it as you wish, or pay any liabilities on it while you are still alive.
The good thing with this arrangement is that you can replace a beneficiary or revoke the deed altogether.
On the other hand, if the deed is valid upon your demise, then the beneficiary listed on the deed takes over the business without having to go through ancillary probate.
Research the laws of the state in which the property is located to make sure they have this clause in their statutes before you proceed.
Use a Revocable Trust
You can bypass ancillary probate, a revocable trust. The word “revocable” means the trust isn’t final; instead, you can change it as you wish.
Transferring the property to a living trust before you die avoids probate not only in the state that you reside in but also in the state where the estate is located.
For this to work, you need to draft the deed transferring the property into the trust.
Upon death, a trustee makes sure the successor has access to the property as stipulated in the will.
Selling the Property before Death
Owning a property in another state is hard, but it is more challenging passing it on to a beneficiary. However, one of the best ways to handle the ancillary probate is to sell off the property and give the proceeds to the beneficiary before you pass away.
Using Joint Ownership
You should consider retitling the property in the other state so that the beneficiaries hold joint ownership. For instance, if you have a vacation home in California that you wish to leave with your kid, then you can come up with a new deed whereby both of you are joint tenants. He will inherit the property automatically without having to pass through probate.
Hesitant About Ancillary Probate? Contact Us for a SolutionAncillary probate requires you to be wise so that you bypass the issues that come with succession. While the estate might be in another state, you have various options to avoid the process and get the property without the need to go through a probate process at all. Contact us today for expert legal help.