Issues to Consider with an Out-of-State Probate

Apr 25, 2019

It’s become more and more common now to see clients come in with estate planning or probate cases that involve multiple states. From clients with a family cabin across the border in Wisconsin or mineral rights to land in North Dakota to “snow birds” who spend the winters away from Minnesota’s freezing cold, more and more people own property not in multiple states.

When it comes to estate planning and probate, owning property in another state needs special consideration. When someone who owns property in another state dies, a situation may be created where an out-of-state or ancillary probate proceeding must take place to administer the out-of-state property. This is in addition to whatever probate proceeding is required in the primary state of residence.

This means the estate representative is dealing with two or more sets of probate rules and regulations, all of which differ from state to state. One of the biggest issues involving an out-of-state probate proceeding is cost. Typically, you will need to pay probate court fees for each property held under a different probate court jurisdiction. In addition, you may be faced with extra accounting and legal fees. If possible, you should try to find an attorney who is licensed both in the home state and the state where the ancillary probate is taking place. While the fees may be higher than usual due to multiple probate filings, it will still likely be cheaper than hiring more than one attorney to deal with property and assets in each respective state.

The situation can be further complicated in cases where the property owner fails to have a Will. When this happens, the probate court will often order distributions of the estate based on the laws of intestacy. The problem with out-of-state probates is that every state has different laws of intestacy, meaning the heirs in one state may not be the same as the heirs in another.

Are there ways to avoid an out-of- state probate proceeding? Yes, but it all depends on the state where the additional property is held since, as noted before, every state has different laws concerning probate. Some of the techniques estate planning lawyers use to get around an out-of-state probate often involve placing the property into a revocable living trust, owning the property jointly with someone else, or drafting a type of deed where the property is transferred upon death.

If you own property in multiple states it is important to be proactive and get the right estate planning in place BEFORE anything happens.