Probate and Out of State Property

  • Robert S. Thomas,
  •   Probate
  •   None

 

As it stands, the probate of an estate is a lengthy process that can take many months to several years. Imagine then, that you have to open probate proceedings in two or more different states, each with its own laws and with different lawyers. This is exactly what happens when a decedent lives and passes in Illinois and owns real estate in another state.

The reason for this is because a probate court in Illinois lacks the authority to enter orders regarding real property in another state, which is governed by the laws of that state. In other words, an Illinois probate court lacks the jurisdiction to apply Illinois laws to a vacation home in Montana. This is problematic for several reasons:

  • The executor will need to open a probate proceeding in the state of the real estate. Referred to as “ancillary probate”, each state has its own laws that govern such proceedings.
  • Because lawyers must be licensed to practice in a state, the executor must hire an attorney from that state to guide that property through ancillary probate. This a whole new set of attorney’s fees that will come out of the estate.
  • If the property is significant, then beneficiaries may choose to raise legal challenges in the ancillary probate case, which would mean a multi-state battle.
  • If there is property in more than one other state, the same applies and ancillary probate proceedings will need to be open in each state.

Planning for Out of State Property

Ultimately, owning property in multiple states adds time and complexity to resolving an estate. However, this does not mean that people should not diversify their portfolio and own real estate in other states; rather, it means that estate planning is critical to preemptively address some of these issues. Some feasible options are set forth below.

  • Transfer-on-death deed. Executing this deed does not give your beneficiary any current claim to the real estate. Instead, this revocable instrument designates a beneficiary to receive the property upon the owner’s death. This transfer occurs outside of probate.
  • Joint tenancy. The most common application of this is for spouses, who want the surviving spouse to retain the property when the other passes away. The property will not be subject to probate.
  • Revocable trust. Transferring out of state property into trust makes it property of the trust. So when the decedent passes, the property is in trust and not subject to probate. Instead, the trustee has the sole authority to distribute property from the trust. 

Contact an Experienced Probate Attorney

 Owning real estate in multiple states adds complexity to your estate; however with an attorney, you can make proper plans. Contact the Law Office of Robert S. Thomas for a consultation. I will review your property and give you custom tailored advice to fulfill your estate planning goals. I have more than twenty years of legal experience in estate planning and tax law matters. Contact my office today at 847-392-5893 to schedule a consultation or visit our website today.

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