If you own
real estate — timeshares, vacation homes, investment properties,
or unimproved real estate — that you intend to leave to your heirs,
transferring the title after your death can be complex. But if that
real estate is out of state, the complications multiply.
death, a probate process will occur in the state where you live.
This involves filing your will with the local court. In addition, probate
proceedings outside of Indiana must be initiated in each state where you own real property. These
additional probate proceedings are called ancillary probate or ancillary
administration. Your heirs will need to pay court filing fees in each state
where you own real property and hire an attorney licensed to practice law in
the state where the property is located. Separate proceedings are necessary
because the state court of your principal residence cannot affect title to
real property located in another state.
additional word of caution: If you die without a will, generally speaking,
the law of the state where the real property is located will determine how the
property is distributed. Since laws vary state by state, real property located
in your home state may be distributed differently from your vacation home in
another state if you don’t have a will.
you have a will or not, you should talk to an estate planning attorney in the
state where the real properly is located to find out the procedures your heirs
will face if you leave them your out-of-state property. The only courts with
jurisdiction to change title to real property after your death are the state
courts within the state where the property is located.
if you leave a will, the out-of-state court will distribute the property
accordingly. Without a will, the out-of-state court will distribute the
property according to its state laws.
a few ways to avoid ancillary probate for out-of-state real estate:
- Title the
deed for your real property jointly with your spouse or another person.
Property titled jointly with rights of survivorship passes automatically
to the surviving joint owner at the first death. This automatic transfer
is sometimes known as a transfer by operation of law. No probate proceedings
are required for title to pass to the surviving joint owner.
out if the other state has enacted transfer on death deed laws. Such
laws create an automatic transfer to a beneficiary named in the deed
upon the owner’s death.
the out-of-state real estate into a living trust. At your death, the
trustee passes the property to the beneficiaries named in your
avoid ancillary administration through planning, you will save your heirs time,
money, and aggravation, not to mention the delays of multiple state
advice and help of an estate planning attorney, you can eliminate unnecessary
complexity for out-of-state real estate transfers and minimize administration
expenses for your heirs.