Owning real estate in multiple states is a dream or goal for some, and a reality that others may have already achieved. This means an individual could have their primary residence in one state, and a vacation home, cabin or timeshare in another state. Or they may have primary residence in one state, and rental or investment properties in other states. This is oftentimes a good thing for those who can pull it off – but there can be consequences down the road without proper preparation and planning.
If you live in Minnesota, and own real estate (real property), your estate will likely be probated. If you do not have an estate plan, a formal probate must be opened. Even if you have a will, there will still most likely be an informal probate proceeding. The probate process exists to change title from the deceased’s name to the name of the heirs or beneficiaries. However, the probate court in Minnesota only has authority to probate property in Minnesota.
If you own property in other states, even just a timeshare in Arizona, your estate must also open what is called an “ancillary probate” in that state (or states) to address that real estate. Your estate will be subject to additional fees for probate court and attorneys in each additional state where property is owned. This can create a costly and challenging situation for your loved ones down the road.
One solution to multiple probate proceedings in multiple states is to establish a Revocable Trust. Once a Revocable Trust is established, title of the property is put into the name of the trust. Since probate is only necessary for assets titled in your name, the property that has been put into the trust (and removed from your name) does not have to be probated. If established correctly, the Trustee should be able to handle retitling of the property after your death, without the hassle and expense of multiple probate proceedings.
A revocable trust may be an ideal option for those who own property in multiple states, but it is only one option that is available. Schromen Law, LLC works with clients to review their unique situation and determine what estate planning documents will best address their needs and help them to achieve their goals.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Schromen Law, LLC and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.