Estate planning helps you plan for your own protection as well as the care and financial support of your loved ones. Many documents can be used to protect your assets and estate, and estate planning can benefit anyone with even a small number of assets. However, an estate plan can become complex when you have assets that are complicated, high-value, or owned in other states. An estate planning attorney can help you navigate the process of modifying an existing plan or creating a new one that manages these assets.
When you own assets like real estate in other states, you have to consider additional complications for yourself and your beneficiaries. Each state’s probate court has jurisdiction over the property held in that state. Your loved ones may have to deal with multiple probate proceedings and costly tax implications. However, if you plan ahead, you can limit or avoid the effects of these proceedings, thereby helping your loved ones benefit more from what you leave behind.
Possible Solutions for Those With Out-of-State Real Estate
You may have out-of-state real estate due to inheriting a home from another family member, owning commercial real estate properties, or being considered a resident of a different state than the one where your primary home is located. Probate is a significant process with several expenses. It can be frustrating for a grieving family to handle even one probate case. Your loved ones may have to travel to the ancillary probate for your out-of-state property, costing them more.
It’s important that your estate plan addresses all your property appropriately. Some tools you can use to address out-of-state property include:
A Revocable Trust
By creating a trust, you can keep assets from entering probate entirely. A revocable trust is a trust that you are able to amend during your lifetime, ensuring that you have control over your property and can alter beneficiaries as needed.
By placing out-of-state property into a trust, the assets are not required to enter probate court because they pass directly to the ownership of the successor trustee. This prevents that real estate from being subject to probate in its state and helps your loved ones avoid that process. The successor trustee becomes the trustee, and they are able to distribute the property to the beneficiaries you named. Revocable trusts also have several other benefits in estate planning.
Joint Ownership
By creating joint ownership of property, including the right of survivorship, you can ensure that the property passes directly to the individual without the use of probate. It’s important to consider drawbacks, such as if the individual you jointly own the property with passes at the same time. You can set up joint ownership with any individual, but typically only legal spouses avoid certain taxes that come with this designation.
Limited Liability Company
A limited liability company (LLC) can be used to plan for property, particularly real estate, that is part of a business. Like a trust, an LLC is a separate entity, so the property is not fully in your ownership. Although real estate in an LLC does not avoid probate, it enables you to plan for the succession and ownership of the property.
Separate Estate Plans
You also have the option to set up an estate plan in every state where you own property. This can be a complicated option, but it does allow you to create individualized plans that fit with each state’s laws and requirements.
FAQs
Q: What Are the Two General Situations That an Estate Plan Can Address?
A: The two general situations that an estate plan addresses and plans for are:
- After Your Death: This includes planning for the distribution of your assets, the support of your loved ones, and the administration of your estate. A comprehensive estate plan can also prevent your loved ones from spending excess time and money in court.
- Incapacitation: You may be incapacitated due to injury or illness. An estate plan can determine what medical care you consent to and who makes important legal, medical, and financial decisions in your stead.
Q: What Are the Risks of Not Having an Estate Plan?
A: There are several potential risks of not having an estate plan, including:
- You have less control over your own medical care if you are unable to state your wishes for healthcare.
- Your family members lose more time and money in probate, and the process is more stressful.
- There will likely be an increase in disputes between family members.
- Your assets do not have clear beneficiaries and are subject to intestate law.
- You have no control over the individual who administers and manages your estate.
Q: Is an Out-of-State Will Valid in Oklahoma?
A: An out-of-state will may be valid in Oklahoma, although it must meet certain guidelines. The will must be valid in the state where it was created and meet other requirements in Oklahoma. Most states have unique requirements for wills, although having testamentary capacity and a witness present are common standards. If you are unsure whether your will is valid in Oklahoma or another state, it is crucial to talk with a multi-state estate planning attorney to review the document.
Q: How Can You Avoid Probate in Kansas?
A: You can avoid probate in Kansas with a comprehensive and enforceable estate plan. One or multiple trusts are useful legal entities in comprehensive estate plans, and they can help your assets stay out of probate. In a revocable trust, you can name yourself the trustee during your lifetime, maintaining control over the assets. When you die, the successor trustee becomes the trustee. Because the legal entity passed ownership immediately, it does not enter the state’s jurisdiction and is not probatable.
Q: What Are the Requirements for a Will to Be Valid in Illinois?
A: The requirements for a will to be valid in Illinois include:
- The individual has testamentary capacity, meaning that they are 18 years of age and of sound mind and memory.
- The will is in writing and signed by the creator of the will, called the testator, or by someone in the testator’s presence and by the testator’s direction.
- The will is attested in the presence of the testator by two or more credible witnesses.
Protecting Your Property With Stange Law Firm
The more complex your estate is, the more important it is to work with experienced attorneys. An attorney can help you protect your property and create a valid estate plan. Contact Stange Law Firm today.
