How Do I Deal With Property Located Out of State in My Estate Plan?

How Do I Deal With Proper…

Many Michigan residents own real estate outside the state. Whether it is a Florida beach house, a Kentucky lake home, or a Wisconsin cabin in the woods, you will have take extra steps to ensure that you include that property in your estate plan. If your will must go through probate in the state of Michigan, those proceedings normally do not give the personal representative of your estate the authority to transfer ownership of real estate located in another state. Although you may want to sell the out-of-state property and leave the proceeds to your children, or simply transfer ownership of the property to your children or other heirs, you won’t be able to do that through your Michigan probate proceedings.

In order to dispose of the out-of-state real estate, your will must be probated in the state in which the real estate is located. This is often to referred to as ancillary probate. The problem with ancillary probate is that it is extremely expensive. In fact, it may cost as much as two or three times more than your primary probate administration in the state of Michigan. In most cases, these rules don’t apply to personal property or motor vehicles that are located out of state; ancillary probate administration usually involves real estate.

In order to avoid ancillary probate proceedings, you could transfer the out-of-state property to a revocable living trust during your lifetime. Along with any other property that you place in the trust, the trustee can transfer the out-of-state property directly to your designated beneficiary upon your death. When created correctly, a revocable living trust can help your surviving heirs avoid probate altogether, which saves substantial amounts of time and money. Ancillary probate for your out-of-state property will be completely unnecessary.

At Legacy Law Center, we are Michigan estate planning lawyers who dedicate our practice to protecting your interests, as well as the interests of your family. Creating a comprehensive and effective estate plan is no small task, and we know that you will need guidance in navigating through this often complex process. Call our Ann Arbor office today to set up an appointment and learn how to best protect yourself and your family.

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