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Ancillary Probate: What It Is and How to Avoid It<\/b>\u00a0<\/b><\/p>\n
Probate is the process by which a court grants a person authority to deal with property owned by a deceased individual (\u201cdecedent\u201d).\u00a0 If this person was named in the decedent\u2019s will, he or she is called the executor or the personal representative of the decedent\u2019s estate.\u00a0 With the court\u2019s supervision, the executor of an estate will distribute the property in the estate according to the terms of the decedent\u2019s will.\u00a0 If the decedent did not have a will, the court will appoint an interested person to deal with the estate\u2019s property.\u00a0 This person is called the administrator of the estate.\u00a0 The administrator will distribute the property according to the laws in the jurisdiction where probate occurs.\u00a0 People are often confused and intimidated by the probate process because it can be complicated, time consuming, and expensive.<\/p>\n
Probate of a decedent\u2019s estate will be opened in the state in which the decedent was domiciled at the time of his or her death.\u00a0 This state will be the state of primary probate proceedings.\u00a0 However, the court in the state of primary probate jurisdiction will not have jurisdiction over real estate located in another state.\u00a0 The decedent\u2019s Executor must apply to the probate court in each state where the decedent owned real estate.\u00a0 The purpose is to ask for the authority to deal with the real estate owned in that state.\u00a0 This \u201cextra\u201d probate process is known as ancillary probate.\u00a0 If the decedent owned real estate in multiple states, ancillary probate can become an enormous burden to the Executor. \u00a0He or she will likely have to complete paperwork and appear at court hearings in each state where the decedent owned real estate.\u00a0 Ancillary probate can also eat into the estate\u2019s finances.\u00a0 It will be necessary to pay court costs, attorney\u2019s fees, and accounting costs in each ancillary probate state. \u00a0This is in addition to the primary probate state.\u00a0 These costs can add up quickly.\u00a0<\/p>\n
There are many ways to avoid ancillary probate by completing estate planning in advance.\u00a0 One way is to own the real estate jointly with another individual with rights of survivorship.\u00a0 For example, if you own a vacation home jointly with your spouse with rights of survivorship, the home will pass to your spouse upon your death.\u00a0 There will be no need for a probate proceeding in most states.\u00a0 Joint ownership is not ideal for people who do not want to share ownership of their property with someone else during their lifetime.\u00a0 Joint ownership also may not be the most efficient solution for tax planning purposes.\u00a0 Joint ownership is also not a good idea if protecting the asset from creditors is important during the lifetime of both joint owners.<\/p>\n
Another way to avoid ancillary probate is to use a revocable trust.\u00a0 Minimizing probate is just one of the many benefits of putting your property into a revocable trust.\u00a0 Property owned in a revocable trust remains under the control of the Trustmaker during his or her lifetime.\u00a0 However, the property will no longer be owned in the Trustmaker\u2019s individual name.\u00a0 This means that, at the time of the Trustmaker\u2019s death there will be no need to open probate proceedings in multiple states.<\/p>\n
More complex solutions for minimizing probate and maximizing tax savings may include different types of trusts, business entities, or gifting strategies.\u00a0 For more information and strategies about how to avoid ancillary probate, or if you are an executor who needs help with the probate process, please call our office at 888-822-8778.<\/p>\n
Ancillary Probate: What It Is and How to Avoid It<\/a><\/blockquote>