This originally aired on the Catholic Faith Network’s show CFN Live: https://youtu.be/jzGyAUvH02M What is a…
Do You Own Property In Two States?
It’s that time of year where we are celebrating with our loved ones and we are starting to make plans for what we want to do better or different in the coming year. Reassessing your estate plan should be at the top of that list.
I have found that over the years, more and more clients are buying that second home down south with the hope that they can either move to a quiet place when they retire, or at the very least, escape the brutal winters of New York. What most people don’t understand is that owning property in multiple states brings complexity to their estate planning.
Recently I had a discussion with Betty about the fact that she owns a home here in New York and she also owns a second home in Florida. In that discussion, we talked about who should ultimately get the homes when Betty passes and the process of how that would happen. The homes are owned solely by Betty (as most properties are). What Betty needed to understand was that even though her New York Will stated that her son should receive the Florida home upon her passing, if she was relying solely on her Will to accomplish this, her son would have to probate her estate in both Florida and New York. That means two sets of legal fees and court fees in order for her son to get the homes that she wants him to receive.
How can we simplify this? Betty can transfer her assets into a trust (Revocable or Irrevocable). The deed is changed for that property to reflect that the trust owns the property. Once the trust owns the property(ies), the courts will not need to be involved when Betty passes. The property(ies) can be transferred or sold by the Trustee of the trust. Betty’s son will avoid the expense of being in probate court in two different states. He will also avoid the delays involved with the court process and the added expenses associated with probate. At the end of the day, Betty’s son will receive the Florida property with a simple deed transfer.
If you own property in more than one state, you should immediately review your planning to understand if your plan sufficiently addresses these issues.
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