How Does Owning a Second Home Outside Florida Affect My Estate Plan?
Many people relocate to Florida from other states. They may continue to own property in one state while owning a second home in Florida, or vice versa. This can pose challenges when it comes to estate planning, since multiple states can mean multiple probates.
Understanding How Probate Works
Probate is the process of administering a person’s estate after they die. In the United States, probate is handled at the state level. This means each state has its own system for administering property located within its borders.
Typically a person’s estate is probated in the state where they resided on the date of death. So, for example, if a person moved from New York to Florida and died while living here in St. Petersburg, that person’s estate would be opened in Florida. The estate would include tangible assets–their Florida home, any furnishings, cars, et cetera–as well as intangible assets such as bank accounts and stocks.
But what if the person still owned their home in New York? Legally, a Florida probate court cannot exercise jurisdiction over real property located in another state. The executor of the estate would therefore have to open a second–or ancillary-probate in New York, specifically in the county where the decedent’s real estate is located.
Avoiding Ancillary Probate
While some states offer simplified procedures for ancillary probate–i.e., the executor only needs to file a copy of the court documents establishing the Florida probate–this can still represent a significant commitment of time. It can also be expensive, thereby reducing the total amount of property available for a person’s heirs. Fortunately, if you happen to own real property in multiple states, there are a number of ways to reduce or eliminate the need for ancillary probate through proper estate planning.
First, you can put all of your assets into a revocable living trust. Assets in a trust do not pass as part of your probate estate. When you die, the successor trustee named in your trust document simply distributes the property as you direct–regardless of what state it is in–without the need for any court supervision.
Second, you can own real property together with someone else through a joint tenancy. This refers to a legal deed where two people jointly hold an entire piece of real property; when one owner dies, the other automatically becomes the sole owner. Again, like with a trust, assets in a joint tenancy do not pass under probate. (Florida married couples can also form a type of joint tenancy known as a tenancy by the entireties.)
Finally, some states allow you to file a “transfer-on-death” deed for real property. As the name implies, this is a deed that transfers property to someone else, but only after you die. Florida does not currently allow such deeds, but if you own a second home in a state that does, this may be an alternative to a trust or joint tenancy.
Speak With a Florida Trusts and Estates Lawyer Today
Regardless of how much property you own, proper estate planning is important. An experienced St. Petersburg estate planning attorney can advise you of all your options and help you determine the best course of action. Contact the offices of Carnal & Mansfield, P.A., to schedule a consultation today.