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Estate Planning

What Is Ancillary Probate?

The probate process is a step-by-step administration of a person’s estate or the assets and belongings they leave after death. Most probate courts also legitimize and assign an executor to a person’s last will and testament, tasking them with managing, evaluating, and distributing a decedent’s belongings after taking care of their final debts and financial obligations. Probate is held in the county where the decedent lived and died.

But some people own assets, such as vehicles and homes, in multiple states. Because state probate laws differ greatly, one state’s court does not have jurisdiction in another. Therefore, an additional, simultaneous probate process that’s required when a decedent owned real estate or tangible personal property in another state or states must take place. This is referred to as ancillary probate.

When Does Ancillary Probate Become Necessary?

When a person dies, a friend, relative, or attorney is typically tasked with initiating the probate process through the local courts by filing a petition with the decedent’s death certificate. When probate begins and the decedent’s estate is evaluated, any assets titled or registered in a different state require that state’s probate courts’ assistance to continue with the probate process.

In other words, an ancillary probate process is always going to be necessary when a deceased person owns probatable property or assets in a different state. However, not all assets and property need to go through probate. Assets that are immediately inherited through a beneficiary clause, for example, skip the probate process.

Likewise, assets held in trust (via a trust agreement) are not part of probate. But if no such preparations were made, the executor of the decedent’s estate (usually the same person who filed the petition to begin probate) will usually be granted the same authorities in the second state to bring the errant property or asset into the fold.

Obtaining Authorization in Another State

In most cases, the two states will work together to allow for a relatively seamless transition. However, two probates mean two sets of costs for the estate to bear such as:

      • Court fees
      • Probate fees
      • Attorney fees
      • And more

The difficult part probably won’t be gaining the necessary authorization to claim and distribute the property – it will be handling the administration and financing of two separate, albeit-related probate processes. When the first probate process begins, a chosen executor is granted administrative powers over the estate through so-called letters of authorization (often referred to as “letters”). These are usually enough to convince the second court to grant the same powers, so long as the first court found everything to be in order.

Ancillary Probate When There Is No Will

An ancillary probate process becomes more of a nuisance when there is no will. This is because an estate without a will is probated according to state intestate laws. These are inheritance laws that determine how an estate is divided in the event of a person’s death if that person left no indication of who should get what. Most intestacy laws can be summarized like this:

Half goes to the surviving spouse; half is divided equally among the next of kin. But these laws do differ slightly from state to state. This means that a home registered in a neighboring state may end up in the hands of someone else in the family than if it had been registered in the state the decedent lived in. These differences can cause tension and strife, as well as major confusion during the probate process.

Avoiding Ancillary Probate

There is no real way to avoid ancillary probate after the fact – but you can go through the trouble of ensuring it will not be a problem for your descendants when you die. The primary trigger for ancillary probate is an out-of-state asset with no predetermined beneficiary. A will acts as a testamentary device dedicating the asset to someone you know and must be enforced by probate.

This means you need to consider alternative estate planning methods to ensure that your errant asset doesn’t need to be probated. Estate planning tools can be used to structure your estate in any way you need. Some of these tools can be complex and may not be necessary for most estates.

But when they can help you avoid even greater and unnecessary costs, these tools can be the difference between a smooth inheritance process and a financially strained estate. Other estate planning methods would allow you to transfer the rights to a property or asset immediately after death or even during life, including:

Living trusts, in particular, allow you to skip probate by funding assets into an entity created to hold them “in trust” for one or more beneficiaries under the management and administration of a third party named the trustee.

Do You Have an Estate Plan?

Estate plans are not created lightly. Rules and regulations differ from state to state, and templates aren’t enough to capture the specificity that a well-crafted estate planning tool can provide. The strength of an estate plan lies in its flexibility, which can only be fully taken advantage of by an experienced estate planning professional.

Even simple clerical errors can become thousand-dollar mistakes down the line, or worse yet, be misinterpreted. Therefore, it is important to take your time and discuss your options and priorities with a professional when creating an estate plan.

Thus, it is equally important to review that plan over the years, especially after major life-changing events, and amend it to reflect those changes. If you consider doing more than drafting a will, it would be in your best interests to approach a firm specializing in estate plans and probate law. The best estate plan is not the one prepared for anything but the one prepared for you.

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