When is Ancillary Probate Necessary?

Probate, the process that will be used to settle your affairs in your home state, becomes Ancillary Probate when you own property in more than one state. Ancillary, or secondary probate, raises the cost and time you will spend, since the process must occur in two separate locations.

Property Ownership in Other States

Probate and Ancillary probate are necessary to pass property from your name into the name of your beneficiaries. Property must be transferred from your name when it is held solely by you or in tenants in common with a partner. When property is held as tenants in common, your part of the property will have to be probated to get it into your beneficiary’s names.

Intestacy in Multiple States

If your estate is without a Will or if your Will is ruled invalid, your estate will be considered intestate. When an intestate estate faces Ancillary probate, the process may take years, while legal fees drain estate funds.

Each state has its own laws regarding heirs-at-law. Intestate heirs for property in another state may differ from the heirs-at-law in your home state. If you have property in another state, it is especially important to have an estate plan and ensure your plan meets the laws of each state where you own property.

Ways to Avoid

You can avoid Ancillary probate by altering how your property located in other states is titled. If you are married, your property can be titled jointly with your spouse. Upon your death, your spouse will inherit the entire parcel. If, however, you both pass away at the same time, probate will occur to pass that property to your other heirs.

If you are not married you can share the property jointly with a family member, but there are some pitfalls that come with this option. In some cases this transfer will be considered a gift, and you must report it to the IRS and pay any applicable taxes. Second, if your joint owner has an outstanding debt, a lien can be placed against your property. You may have to pay off the lien or possibly sell your property to pay it.

Another option is a Revocable Living Trust. You can title property in multiple states in the name of your Trust and it can easily pass to your spouse and other heirs outside of Ancillary probate.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday