The basic probate process is already time-consuming, taking years to complete in some cases. However, did you know that if you have property located in a state other than where you live, your estate will be subjected to another separate probate process? Probate attorneys have experience handling, what is referred to as, ancillary probate. The question is: can it be avoided?
What does ancillary probate mean?
The term “ancillary,” in the legal context, means a legal proceeding that is not primary, but which aids in the rendering an outcome in the main proceeding. In other words, if upon your death you are a resident of Nevada, the primary probate proceeding would take place in Nevada. If you own real estate in Florida, an ancillary proceeding in Florida would aid the probate court in Nevada in completing probate of the entire estate, including the property in Florida.
When is ancillary probate necessary?
Basically, the rules require that real estate is probated in the state where the real estate is located. So, if you are a resident of Nevada, your real estate where your residence is located will be probated along with your other assets – in Nevada. But, if you have a summer home in Florida, then there would need to be an ancillary probate proceeding in Florida for that particular property. Why? Because only the Florida court would have jurisdiction over the Florida property.
The Ancillary Probate Process
Most personal representatives who are faced with ancillary probate contact probate attorneys in the state where the out-of-state property is located. Probate is always commenced in the deceased’s state of residence. The second probate proceeding is then opened in the other state. Once the will has been accepted by the probate court in the primary proceeding, it is typically accepted by the other court as a “foreign will.”
How you can avoid ancillary probate
If you want to spare your family the stress and cost of an ancillary probate court proceeding after your death, you should definitely consider incorporating some common estate planning tools that can help them avoid ancillary probate. The most common methods include:
- Owning the property with someone else in joint tenancy, tenancy by the entirety, or community property with right of survivorship;
- Putting the property in a revocable living trust; or
- Recording a transfer-on-death deed for the property.
Probate attorneys in the state where your other property is located can provide you with other useful methods, so be sure to discuss this issue with them.
Using a Revocable Living Trust to avoid ancillary probate
Living trusts are very helpful estate planning tools and they are quite similar to a will. Trusts have an added advantage, though, of keeping property from becoming part of your probate estate. How does this work? When you transfer property (including real estate) to a trust, then the trustee actually owns the property, not you. Since the property is owned by the trust and is not subject to disposition according to the terms of your will or the laws of intestate succession upon your death, it does not need to be probated.
Transfer-on-death deed can avoid ancillary probate
Another way to avoid ancillary probate is by recording a transfer-on-death deed for the property. The process is simple. The deed will identify the person you choose to receive the property upon your death. At that time, the property is transferred directly to your named beneficiary without going through probate.
Joint ownership of property avoids probate
Joint ownership is another simple way of avoiding ancillary probate. When property is owned jointly and one owner dies, the surviving joint owner retains ownership of the property automatically. That way, there is no need to go through the probate process in order to transfer the property. There are several different types of joint ownership, so discuss your options with your probate attorney.
Don’t forget to include out-of-state property in your trust
It is quite common for people to transfer their primary residence to their trust, but forget to include their timeshare or a vacation home. In fact, this is one of the most common estate planning mistakes. If all of your property is not included in the trust, you cannot avoid probate.
If you have questions regarding ancillary probate, or any other probate administration needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.