It is a good feeling to get away and spend time at your vacation home if you are fortune enough to have an additional piece of property out-of-state. You can make memories with your family and friends, and real estate can be a good investment.
When you are planning your estate, you should be aware of the potential for ancillary probate if you are in this position, and we will examine the subject here.
Probate is a process that serves a purpose when an estate is being administered. If you state your final wishes in a will, you would name an executor in the document to complete the hands-on administrative tasks.
The executor admits the will to probate, and the court provides supervision. The executor will identify and inventory the property while probate is underway, and they will prepare it for distribution to the heirs.
In many cases, a probate lawyer and a tax accountant will be engaged by the executor, and there can be appraisals and liquidation expenses. Creditors are notified, and they are given time to make their claims.
Final debts will ultimately be paid, including taxes. When all of these matters have been resolved to the court’s satisfaction, the estate will be closed, and the assets will be distributed to the heirs.
There is nothing inherently negative about probate, but it is time consuming, and there are expenses that reduce the value of the estate.
If you live in North Carolina, South Carolina, or Kentucky, and you own property in a state that is located elsewhere, ancillary probate may be necessary if you use a will as your asset transfer vehicle.
This is a second probate process that would take place in the state where the property is located, so ancillary probate would complicate and prolong the estate administration process.
Revocable Living Trust
You can proactively take steps to make sure that probate is not a factor when your estate is being administered. A revocable living trust is a very effective, versatile tool that can be the ideal solution.
Some people do not consider trust creation because they assume that they would lose control of assets that they convey into a trust. This is not the case with a revocable living trust because you would retain the right of revocation so you could revoke or rescind the trust at any time.
However, you do not have to exercise this option to gain control of the assets that you convey into the trust. You would act as the trustee while you are living so you can use the resources in any way that you choose.
When you create the trust, you would name a trustee to succeed you, and your heirs would be the beneficiaries. After your passing, the trustee would distribute assets to the beneficiaries in accordance with your wishes, and probate would not be a factor.
This applies to the property that is located in your state of residence and and in other states so this would be a turnkey solution.
In addition to the probate avoidance, the consolidation of asset ownership streamlines the administration process. Another benefit is the ability to provide limited distributions over time to prolong the usefulness of the trust.
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Need Help Now?
If you have already learned enough to know that it is time for you to work with a Charlotte, NC or Huntersville, NC estate planning lawyer to put a plan in place, we are here to help. You can schedule a consultation appointment if you call us at 704-944-3245.
The number for our Ashland, Kentucky location is 606-324-5516, and the number for our Florence, Kentucky office is 859-372-6655. You can also fill out our contact form if you would rather send us a message.