Frequently, people die in one state and own real property out of state. This can be common among “snow birds,” which are northerners that seek warmer weather in southern states in the winter. These out of state assets can be problematic if a proper estate plan is not prepared.
Out of State Assets
When snow bird’s die, if the assets are not held in a trust or joint ownership, the real property must go through probate whether there is a Last Will and Testament or not. When a person dies in Michigan, a probate proceeding is opened in the county in which they resided. In addition, an ancillary probate proceeding must be opened in the state(s) in which the other asset(s) is or are held.
As an example, let’s assume a person lives in Michigan and spends their winters in Florida. Upon their death, a probate estate may be opened in Michigan because the person resided there. An ancillary probate estate would be opened in Florida to be able to convey the Florida real estate.
Out of State Assets-Weird Results
This can be challenging for clients as they have to deal with probate laws and proceedings in two different states, and there are often many differences in the law between these jurisdictions. Each state’s unique probate laws could yield odd results. For example, the laws of intestacy, which are followed when there is no Will upon death, differ from state to state. This could be problematic because the heirs at law in one state may be different from the heirs in another state.
Grieving families may have to endure hiring lawyers in multiple states, trying to understand different state laws, different judges, different courts and litigation in multiple jurisdictions.
Out of State Assets – The Probate Pro Solution
Different kinds of living trusts can help you avoid probate, reduce estate taxes, or set up long-term property management. A revocable living trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can be the trustee of your own living trust, keeping full control over all property in multiple states.
The big advantage to making a living trust is that property left through the trust does not have to go through probate court in any state.
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