One of the primary goals of your estate plan is likely to ensure that your assets are distributed according to your wishes following your death. If you own property outside of the State of Florida, estate planning becomes more complicated. It is crucial, however, to include out of state property in your estate plan to decrease the likelihood of legal disputes after you are gone as well as to make sure the property is passed on to beneficiaries of your choosing. Toward that end, the Port St. Lucie attorneys at Kulas Crawford & Smith discuss how to handle out of state property in your estate plan.
Estate Planning Basics
Having at least a basic estate plan in place ensures that your assets are passed down to the beneficiaries of your choosing after you pass away. For most people, a Last Will and Testament serves as the foundation of their estate plan. Additional estate planning tools and strategies, such as Trusts, Powers of Attorney, and Advance Directives, are often incorporated into the plan to create a comprehensive estate plan. When your estate includes property located in different states – or even countries, you must take additional steps to address the unique legal requirements and potential challenges that can arise.
Options for Including Out of State Property in Your Estate Plan
Handling out-of-state property in your estate plan requires careful consideration and planning given that there are several different ways you can address the property in your estate plan, including:
- Executing multiple Wills: One approach to managing out-of-state property is to create separate Wills for each state where you own property. This can simplify the probate process by addressing the specific probate laws and procedures in each state; however, this strategy requires careful coordination to avoid conflicts between the Wills. Each Will must clearly state that it is limited to the property in the specified state and should not override or contradict the terms of the other Wills.
- Using a Revocable Living Trust: A Revocable Living Trust is another effective tool for handling out-of-state property. A Trust is managed by a Trustee according to the terms you set forth in the Trust document. By transferring your property into a Trust, you can avoid the probate process altogether. In addition, because the Trust owns the property, the property is not subject to probate in any state. This can significantly simplify the administration of your estate and ensure a smoother transfer of assets to your beneficiaries.
- Joint Ownership and Beneficiary Designations: Another strategy to consider is joint ownership with rights of survivorship. If you own property jointly with another person, such as a spouse, the property will automatically pass to the surviving owner upon your death, bypassing both probate and the out of state property issue. Beneficiary designations on accounts and property can also be used to bypass probate. For example, you can designate a beneficiary for your out-of-state real estate through a transfer-on-death (TOD) deed if the state allows it.
- Creating a Foreign Will: If the property is located in another country, estate planning gets even more complicated. You can create a separate Will for the property located in another country or you may be able to use an international Will. In 1973, the International Institute for the Unification of Private Law (UNIDROIT) held a Convention Providing a Uniform Law on the Form of an International Will. Wills that meet the requirements are recognized by participating countries. An estate planning attorney can tell you if the country involved recognizes international Wills and help you create one if it does.
What Happens If I Do Not Address Out of State Property in My Estate Plan?
If you do not take steps to address out-of-state property in your estate plan, your estate may be subject to “ancillary” probate. Ancillary probate is a secondary probate process that occurs in the state where the out-of-state property is located. This can result in additional legal fees, court costs, and delays for your beneficiaries. In addition, without clear and legally binding instructions from you about how to handle out-of-state property, the property will be subject to intestate succession laws. Intestate succession laws in the state where the property is located will dictate who inherits the property, regardless of your wishes.
Do You Have Questions about How to Handle Out of State Property in Your Estate Plan?
To learn more, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to incorporate property located in another estate or country into your estate plan, please contact an experienced Port St. Lucie probate attorney at Kulas Crawford & Smith by calling (772) 398-0720 to schedule a consultation.
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