Ancillary Probate: Owning Property in Several States
A person owning quite a bit of property will want to create a “last will and testament” before he or she dies, to bequeath her property to loved ones, or “beneficiaries.” However, wills must be created pursuant to legal formalities. The process of probate determines whether the will was properly created, levies death taxes, and resolves conflicts among heirs.
Probate is filed in the county of “domicile,” that is, the deceased person’s permanent and primary residence. That main probate will rule on all matters of personal property, bank accounts, and other assets. However, if a deceased person owns real property such as land, a home, or a ranch, that real property is subject to the law of the state in which it sits.
An “ancillary probate” is a supplemental probate proceeding held in the state where the real property is situated, but where the deceased person does not live. For example, an Idaho resident may hold a winter condo in Yuma, Arizona. Arizona will require that an ancillary probate be held on the property to clear title and satisfy creditors, prior to its inheritance by beneficiaries.
Probate in several states can be time-consuming and costly. However, ancillary probate on out-of-state property can be avoided by holding the property in joint tenancy. When one of the owners dies, the other person retains full ownership of the property.
Another option is placing all out-of-state property into a revocable living trust. That way, the property will pass to beneficiaries outside of probate, according to the directions set forth by the trust. Transfer on death deeds may also serve to avoid the time and costs of ancillary probates.
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Last Modified: 02-13-2012 04:20 PM PST
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