For an estate owner, it is crucial to understand the different property rights of each state so he or she may pay the correct taxes and envelope the real estate and assets into the estate properly. Taxes and certain legal rules require the estate owner to follow different procedures for the property depending on the state and where the property lies.
Owning property in different states may create a complication from the various state laws that affect the ownership and how it exists in an estate. The different factors could affect how the property passes to a spouse or heir. Some elements of these complications exist in real estate taxes, insurance policies, business process and how the estate will pass down to each person. There are some important matters the estate owner must know before he or she dies when owning the property in multiple states. He or she should also hire an estate planning lawyer to provide for the future.
Near States’ Process
The estate owner may reside in Nebraska and die there while owning real estate property in another state. Here, he or she may sign up and use two probates. A professional to help with re-titling assets to the important and proper beneficiaries is generally advisable. The advisor or agent may also transfer property from another state such as North or South Dakota through probate courts. The West Coast may have extensive and greater legal fees when the property exists in this region. This is also possible if owning property outside of Nebraska. Hiring an agent to help with these processes may assist the estate owner and help with a lawyer in estate planning.
Revocable Living Trust
To bypass many complications with probate, the estate owner may need to use a revocable living trust which may help avoid out of state probate processes. This is an estate planning tool many owners will use to transfer assets to heirs when the estate owner dies. The owner may name a person trustee, transfer real estate through a deed and then provide for heirs at the time of death. The trust will need a new trustee and may transfer assets and income to this person. This provides to beneficiaries or heirs without the probate process initiated.
Death without Preparations
If the estate owner dies without making any preparations to include a will, the assets may tie up in probate courts for years. The real estate becomes part of the different probate processes that may alter the estate through taxation and fees in differing amounts and times. Each state where the property resides will undergo its own probate, and the heirs may need a lawyer to proceed through each process and to even understand what happens to the property and estate. If heirs lack the funds to hire a lawyer, they may remain confused until the probate courts finalize the matter.
The Limited Liability Company
To avoid out-of-state probate processes, the estate owner may use a limited liability company. He or she may use the LLC to funnel the real estate to and provide for possible proceeds of investments and opportunities to hires or spouses that survive him or her when he or she dies. This also bypasses the probate process in the individual states. By placing the property within the LLC, the estate owner is able to convert it into something else that remains in the estate as an owner of the company. This changes the real estate from real property to personal property and the out-of-state property goes through only one probate process.
By making use of at least one process such as an LLC or a trust, the estate owner is able to keep multiple states processing the real estate through probate individually. This keeps taxes at a single rate and may provide for heirs and spouses when the estate owner dies through only one probate court. This could reduce the amount taken in taxes for death taxation or if the estate owner transfers an LLC to another owner to pass proceeds to family members. He or she would need to hire a lawyer to set many of these methods up.
The Lawyer in Real Estate Planning
Holding property in multiple states is difficult to manage without a real estate planning lawyer to help along the way. The legal professional may need to provide guidance in property matters and how to keep everything together.
Provided by HG.org