Handling out-of-state assets in your California estate plan can complicate matters if you do not work with a California estate planning lawyer. Many people overlook out-of-state assets when they create a simple Will. They leave everything to their heirs without considering how properties in other states will be transferred. An attorney ensures your estate plan addresses all potential issues related to out-of-state assets.
Determine the Requirements for an Ancillary Probate
An ancillary probate is an estate in another state because the decedent had property there. Because each state has its own probate laws, it is essential to research and understand the requirements for ancillary estates. You must also understand how property is transferred to heirs in that state. It could make a difference in what you want to do with the property.
Consider Tax Implications for Out-of-State Property
There could be tax implications in other states that do not apply in California and vice versa. You need to determine if the state where the property is located has estate or inheritance taxes. You also need to consider how state-specific tax laws and federal tax laws could create a tax burden for your heirs.
Ensure Estate Documents Are Valid in Other States
Because states have different probate laws, a Will might be valid in California but not enforceable in another state. An estate planning lawyer can research the probate laws in the state where your property is located to ensure all estate documents are accepted in California and another state. A mistake many people make is using generic estate forms instead of working with an attorney.
Create a Revocable Living Trust
Transferring the out-of-state property to a revocable living trust may be the best option. Because the trust holds title to the property, there is no need for ancillary probate. You act as the trustee and manage the trust property during your lifetime. After your death, the trust becomes irrevocable, and the successor trustee begins managing the trust.
You may choose to leave the out-of-state property in the trust and set specific guidelines for how the property is to be used by family members. You can also direct the trustee to transfer the property to your heirs.
A probate lawyer should confirm that trust assets located in another state will not pass through probate in that state. Also, do not overlook transferring the title to the property to the trust. Until you transfer the title, the trust is ineffective.
Review and Update Your Estate Plan
Reviewing and updating your estate any time you purchase or sell property is important. Other life events that may require changing your estate plan include marriage, divorce, birth of a child, death of an heir, adoption of a child, and a substantial change in your financial situation. Even if you do not experience these events, you should regularly review and update your estate plan to ensure it reflects your current wishes.
Learn More About Out-of-State Assets From Our California Estate Planning Lawyer
Effective estate planning can prevent problems with out-of-state assets after your death. Contact Horizon Elder Law to meet with our California estate planning lawyer. We will help you develop an estate plan that addresses all issues. Our legal team also assists personal representatives when they need to deal with challenging issues, such as out-of-state probate.