When you buy a vacation home out-of-state, you are making an investment that you can enjoy on an ongoing basis. Your family members and friends can get together when you all have spare time. Memories are made when you can relax and enjoy the vacation experience.
If you are in this position, you should consider the estate planning implications when it comes to the estate administration process.
Simple Will and Probate
When a will is used to facilitate postmortem asset transfers, the executor will admit the document to probate. This is a legal procedure that takes place under the supervision of a court, and it serves a purpose.
Creditors are given time to come forward because final debts must be paid, including taxes. The executor will identify and inventory the assets and get appraisals before property can be liquidated.
There is a proving of the will during probate. The court determines the validity of the document. If anyone wants to contest the will, they can make a case while the estate is being probated.
Probate will usually take about nine months at a minimum. During this time, the inheritors do not receive their inheritance. Probate expenses will typically consume between three and seven percent of an estate according to a study. In addition, probate records are available to the general public.
Ancillary Probate
Clearly, probate is not necessarily positive for the rightful heirs to an estate. And if you own property in another state, ancillary probate would be necessary if you direct its transfer through the terms of a will.
This is a separate probate procedure that will take place in the state where the property is located, so there would be two different probate processes to navigate.
Revocable Living Trust
You can make things much easier on your family if you utilize a revocable living trust as your primary asset transfer vehicle. When you have this type of trust, you would be the trustee, so you would have complete access to the assets every step of the way.
When you draw up the trust declaration, you would name a trustee to act as the administrator. This can be a professional fiduciary like a trust company. You could also designate someone that you know personally. Even a beneficiary can potentially be a trustee.
After your death, the trust would become irrevocable. The principal would be out of the reach of the beneficiaries’ creditors. You would dictate the terms of the distributions, so you do not have to allow for distributions of lump sum inheritances all at once.
A significant percentage of seniors become unable to handle their own financial affairs at some point in time. When you have a living trust, you can empower a disability trustee to assume the role if it ever becomes necessary.
There is a consolidation of asset ownership, and this will simplify the process for the trustee. After your passing, the trustee would distribute assets to the beneficiaries, and the probate court would not be involved. This also applies to ancillary probate if you own property outside of Oklahoma.
Attend a Free Seminar!
We conduct seminars on an ongoing basis to provide educational opportunities to members of our community. These events are free, so this is a time investment that will yield dividends.
You can see the dates if you visit our seminar schedule page, and when you identify the session you would like to attend, follow the simple instructions to register.
Need Help Now?
If you are ready to work with an Oklahoma City estate planning lawyer to put a plan in place, our doors are open. You can send us a message to request a consultation appointment, or we can be reached by phone at 405-843-6100.
- What Happens to Assets When Creating a Trust? - February 27, 2017
- Are Living Wills Different from Regular Wills? - February 28, 2017
- Why Wills are Such a Common Estate Planning Tool? - March 1, 2017
