Does My Estate Plan Need to Include My Vacation Property?
Yes! If you own a vacation property, timeshare, investment property, or any other asset outside of the state where you are domiciled, you must make sure it’s included in your estate plan. If you fail to include these in your estate plan, or fail to have an estate plan at all, your heirs will encounter issues, and usually the expense and hassle of court costs, when inheriting these assets.
Because state laws vary, your principal residence may even be divided one way in your home state, while other properties – such as your vacation property, time share, or other pieces of out-of-state land – can end up being divided in a completely different manner. Of course, having a comprehensive estate plan puts you in control and lets you determine who will receive your vacation property, regardless of where it’s located.
Avoiding Ancillary Probate on Your Vacation Property
When the vacation property is located in a state other than where the deceased person was domiciled, the family may need to file a second probate case, referred to as an ancillary estate. Typically a local attorney must handle the ancillary estate, which adds more cost, time, and hassle for your family to settle your affairs. For example, if you died as a resident of Maryland but owned property in Florida as well, you might have an ancillary probate in Florida for the property located there.
Probate is the legal process that is used to change title to property held solely in the name of the decease, whether the deceased died with or without a will. Each state has their own probate rules, making it fairly complex for families that inherit property in multiple states. It is important to know that while personal property may be probated in the state where the decedent is domiciled, real property must be probated in the state or country where it is located.
The need for ancillary probate can be avoided through proper estate planning. Specifically, if the decedent transfers the property to his or her revocable trust before death, ancillary probate can be avoided. Of course, there are several ways to avoid the costs, delays, and headaches of probate other than a trust, but each alternative has downsides. One way is the title the property jointly with your spouse or, alternatively, jointly with another individual. The property must be titled in a particular manner to avoid probate so that it automatically goes to the survivor. But this can make refinancing difficult, say if you name a child as a joint owner, and can also cause unnecessary taxes to be due. The result of using a revocable trust will likely be a saving of money, time, and hassles for your heirs.
Intestacy laws can be complicated because they vary from state to state. At the same time, a well thought out estate plan avoids unnecessary probate costs in every state – including where you own vacation property. With the help of Andre O. McDonald, a knowledgeable Howard County estate planning attorney, you can successfully avoid unnecessary complication and make settling your affairs as easy as possible for your heirs.
If you have any questions about ancillary probate, or any other estate planning issues, contact McDonald Law Firm today at (443) 741-1088 to schedule a no obligation consultation.
DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL OR TAX ADVICE.