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Will Ancillary Probate Issues Affect You?

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The term "probate" is not so unfamiliar-it conjures up thoughts of will administration, will contests, and sometimes mounds of paperwork. Probate assets are those that have no built-in survivorship feature, so it is up to a probate court to determine the proper disposition of those assets through a valid will or the laws of intestacy.

But uncertainty can arise when a decedent dies while owning property that is located out-of-state. Regular probate or "domiciliary probate" proceedings take place in the decedent's domicile or state of residence for the property located in that state, but what does an attorney do about the property located elsewhere? Such cases may require the opening of a separate probate estate for ancillary probate proceedings.

When Is Ancillary Probate Required?

Ancillary probate may be required when a decedent, at the time of death, owned property located outside of the decedent's state of residence. Examples of such property include the following:

  •  Real estate, like a second home or vacation home located in another state;
  •  Personal property, such as a motor vehicle or boat titled in another jurisdiction.
  •  Fractional oil, gas, or mineral rights that are attached to out-of-state real estate; or
  •  Livestock that is not in the domiciliary state.

Depending on the type of property involved, ancillary administration may be required when a resident of one state dies while owning property outside of that state and the title to that property does not transfer at death to another.

Ancillary Probate Can Be Problematic

Ancillary estate administration can increase the cost of probate because it may require probate proceedings in two or more states. These separate probate proceedings may incur their own court fees, accounting fees, and attorneys' fees.

Additional complications may arise if the decedent died intestate, meaning without a valid will. The probate and intestacy laws vary from state to state, and one state's laws of intestacy (the order of who inherits when there is no valid will) or defining legal heirs may conflict with the laws of the state of the decedent's residence or another state where the decedent owned property at the time of death.

How to Avoid the Need for Ancillary Estate Proceedings

Ancillary estate proceedings may be necessary for the disposition of a decedent's out-of-state property, but you may be able to avoid this extra step through careful estate planning. Those who own property outside of their state of residence should explore the following options for property they own in another state:

  •  Transfer the property to the intended heir or heirs while retaining a life estate.
  •  Name a beneficiary for out-of-state property.
  •  For out-of-state accounts, name your chosen heir as a co-account holder or payable-on-death holder.
  •  Use a joint tenancy form of ownership such as joint tenancy with right of survivorship (JTWROS) or, for married couples, tenancy by the entirety.
  •  In certain states, arrange for a community property with right of survivorship form of ownership. This way, the surviving beneficiary automatically inherits the property at the death of the decedent. Currently the following states recognize this form of ownership: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
  •  Set up a revocable living trust. The trust becomes the legal owner of the property, so nothing in the trust requires probate.
  •  Execute a transfer-on-death deed, also called a beneficiary deed, which will cause ownership to transfer automatically upon the death of the decedent.

For guidance on estate planning to avoid ancillary probate or for help with an ancillary estate in West Virginia, Kentucky, or Ohio, Anna M. Price of Jenkins Fenstermaker, PLLC can help. You can reach Anna by phone at (304) 523-2100 or (or (866) 617-4736 toll-free) or by completing her online contact form.

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