The most important reason to work with an experienced estate planning lawyer to put your plan in place is so you have a comprehensive understanding of your options. As a layperson, you are not going to know why you should choose a particular course of action. Many people take an overly simplistic approach. They assume that you should use a will to transfer assets because they think that trusts are only for multimillionaires with complex holdings. In reality, this is an oversimplification. There are trusts that can be useful for people that are not in the economic stratosphere, and certain circumstances can call for the utilization of a trust.
Out of State Property and Ancillary Probate
There are Oklahomans that own vacation property that is located in another state. It is great to be able to get away from your everyday routine with your loved ones to enjoy some spare time in an environment that you enjoy. You get to reap the benefits on a personal level, and real estate is usually going to be a good investment. Instead of paying good money to go on vacation occasionally, you get away more often, and in the long run, you may turn a profit. From an estate planning point of view, there is something you should be aware of if you own vacation property out of state. If you use a will to facilitate asset transfers, you would name an executor to act as the administrator.
When selecting an executor, there are a few things to keep in mind. Longevity is one of them. And, you should also consider potential conflicts of interest. The executor will assume a significant level of responsibility, and the job requires focus and attention to detail. This sounds like I am overstating the obvious, but you also want to make sure that the person that you want to designate is willing to assume the role. You also have to choose someone with financial and administrative capabilities. If you do not know anyone that fits the bill, you can engage a professional to act as the administrator.
The executor would admit the will to probate, which is a legal process that takes place under the supervision of a court. There are time-consuming procedural steps that must be taken while the estate is being administered. One probate process is more than enough to deal with, but if you own property in another state, the situation is amplified. There would be an ancillary probate proceeding in that state, so there would be two different probate processes to navigate after your passing. This will draw out an already lengthy process. Additional expenses will be incurred. Plus, dealing with a procedure that is taking place out-of-state is unnecessarily complicated and inefficient.
Streamlining the Process
There is a simple step you can take to streamline the estate administration process if you own property in another state. Instead of using a will as an asset transfer vehicle, you can utilize a revocable living trust. While you are living, you would be the trustee of your living trust, so you would be in complete control every step of the way. In the trust declaration, you would name a successor trustee to manage the trust after your death. Once again, this can be someone you know who is financially astute and is a good money manager. As an alternative, you could use a trust company or the trust department of a bank to fulfill that role. Property that is held in any state can be transferred into the trust. After your passing, the trustee would distribute the assets to the beneficiaries, and there would be no probate or ancillary probate process to navigate.
Attend a Free Webinar!
We conduct webinars that cover all the most important estate planning topics. You can learn a lot if you attend one of these sessions, and there is no charge, so this is a great way to invest a little bit of spare time. You can see the dates if you visit our Oklahoma City estate planning webinar page, and we ask that you register in advance if you decide to join us so we can reserve your spot.
- Understanding IRA Inheritance Planning: Key Considerations - September 14, 2023
- Irrevocable Trust Decanting Provides Flexibility - September 12, 2023
- Inheritance Planning Solution for a Spendthrift Heir - September 7, 2023
