We continue to have a lot of new and existing clients whose loved ones have died with real property interests in other state. They are often surprised when we advise them that in order to transfer title to those interests, they will need to file and go through that state’s probate process. Typical out of state real property interests include vacation homes, beach condos, rental homes, ranches, farms, and mineral interests.
Probate is the legal process whereby a Will of a decedent is authenticated, and the estate of the decedent is administered pursuant to the terms of the authenticated Will or state law. It generally entails the collection of the decedent’s assets, the liquidation of the decedent’s liabilities and distribution of the remaining property pursuant to the terms of the Will or state law. The primary probate process occurs in the state where the decedent resided at his or her time of death.
We who reside in Texas are lucky because probating a Will in Texas is relatively simple and inexpensive when compared to other states, especially here in Collin County. Normally, you can probate a simple Will with no issues for less than $2,000. That is not the case in a lot of other states where the cost of probating a Will can cost $10,000 to $20,000, or more.
Without going through this additional probate process in each state where the real property interest is located, title to the real property interest remains in the name of the decedent. This additional out of state probate process is generally called “ancillary probate” because the additional probate process is ancillary to the primary probate process which occurs in the state where the decedent resided at death.
For example, if you resided in Texas at the time of your death, and individually owned a vacation home in Colorado and some inherited oil and gas mineral interests in Oklahoma, your executor/administrator will need to probate your Will in Texas, and also perform ancillary probates in Colorado and Oklahoma. The decedent’s holding title to these real property interests in his or her individual name added additional complexity to administrating his or her estate, and substantially increased the costs of probating his or her Will, and transferring title to his or her named beneficiaries.
There are solutions to avoid this additional complexity and cost. However, they must be implemented before death. One of those solutions could be to transfer title to your out of state real property interest to a legal entity or trust.
We would love to assist you with looking at your situation and formulating a solution for your situation. Please give us a call.