Many people pass away while owning assets in multiple states. Unfortunately, this can complicate the estate administration process for executors, who must open probate cases where a decedent left assets in each state. Executors should familiarize themselves with probating out-of-state assets to ensure a smooth estate administration.
Understanding Out-of-State Assets
In estate administration, “out-of-state” assets include any assets outside the state where the decedent primarily resided at their death. A person may pass away with various assets in different states, such as real estate, bank accounts, or vehicles such as automobiles, boats/yachts, or private aircraft.
An estate that includes assets and multiple states can prove challenging to probate because the probate laws of each state will apply to the assets located in that state. Thus, executors can get ahead of challenges or complications by identifying and inventorying a decedent’s out-of-state assets.
What Is Ancillary Probate?
Although the primary probate case will occur in the decedent’s state of residence, an executor may have to open ancillary probate cases if the decedent owned assets in other states. Ancillary probate allows an executor to probate specific estate assets outside the decedent’s state of residence, such as a piece of real estate or a business. When an executor identifies estate property outside the state where the primary probate takes place, the executor can petition the courts in that other state to open an ancillary probate to administer the property in that state. In most cases, once the court in the primary probate proceeding has accepted the decedent’s will and issued letters testamentary to the executor, the court overseeing the ancillary probate may accept those documents without further evidence, empowering the executor to probate estate assets in the state.
Steps to Handle Out-of-State Assets in Probate
The process of probating out-of-state assets involves several steps, including:
- Identifying Assets – Executors should identify out-of-state assets when inventorying the decedent’s estate.
- Confirming the Will – An executor should review the decedent’s will to determine how the decedent wished to dispose of an out-of-state asset.
- Filing for Ancillary Probate – When an executor identifies out-of-state assets, they must file ancillary probate cases in each state where the decedent owned assets.
- Coordinating Between Courts – The executor may have to coordinate between the courts handling the primary probate case and the ancillary probate case, especially when a party files a will contest in the primary probate case or a creditor or interested party levies a claim against the out-of-state asset in the ancillary probate case.
- Distributing Assets – Once the executor has paid estate debts, expenses, and taxes, the executor can petition to distribute the out-of-state asset(s) per the terms of the decedent’s will or state intestacy law.
Challenges of Out-of-State Probate
Some of the challenges that executors face when needing to probate out-of-state assets include:
- Legal Complexities – Different states may have differing probate laws and court procedures.
- Costs and Delays – Needing to file for probate cases in multiple states can add to estate administration expenses and potentially slow the probate process as the courts coordinate.
- Tax Implications – Having estate assets in multiple states can trigger different estate or inheritance taxes.
Tips for Managing Out-of-State Probate
Best practices for executors to follow when managing out-of-state probate include:
- Seek legal assistance from a local probate attorney familiar with each state’s laws and procedures.
- Understand how estate and inheritance taxes work in each state.
- Keep detailed records of assets and court proceedings.
- Plan for delays and an extended probate process.
- Coordinate with beneficiaries, keeping open lines of communication to inform them of the progress of ancillary probate cases.
Contact a Probate Attorney Today
When you become the executor or administrator of an estate with assets in multiple states, an experienced probate attorney can walk you through probating those assets. Contact Biddle Law for an initial consultation to learn more about the process, challenges, and pitfalls of probate for out-of-state assets.