Owning real estate in multiple states is a dream for many people. You could have a residence in one state and a vacation home or rental property in another state. This sounds great, but there can be consequences down the road. Owning real estate in multiple states can drastically affect your estate plan.
One key aspect of making an estate plan is to lessen the burden on those that will have to administer and distribute your estate in probate as your Personal Representative. This burden is greater when one owns real estate in multiple states. If one is a resident of one state and has property in another state (and that ranges from a house or ranch or commercial building, or to land as small as just a timeshare) there may be a more difficult and expensive situation for your loved ones down the road.
The real estate that is in your state of residence will be probated through the probate court in your home state. Probate courts exist to change title from the deceased person's name to the names of their heirs. The probate court in your home state does not have the authority to probate real estate in other states. This means that a probate proceeding must be initiated in each state where a person owns real estate in even if it is just a timeshare in Florida where you spend just one week in a year. This also means your estate must pay additional fees for probate and most likely lawyers in each additional state.
A solution to probate in multiple states (or what is called "ancillary probate") can be a revocable living trust. A revocable living trust takes the title of the property out of your name and puts title of the property into the name of the trust. Probate is only necessary for assets titled in your name. Once title of property is removed from your name there is no need for probate of that property in one state or multiple states.
A revocable living trust is not meant for everyone's estate plan, but it makes sense for those with property in other states. Living trusts can be pushed on some that do not really need it as part of their estate plan, but owning real estate in more than one state is a serious reason to look in to getting one made.
If you have questions about whether a revocable living trust is right for your estate plan, give us a call at 253.858.5434 to see how we can be of service. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.