Multi-State Real Estate Lawyer
Going through the probate process after a family member passes away is difficult, time-consuming, and expensive. If that family member owned property in more than one state, it will be necessary to go through the process in each state—unless steps were taken to avoid that problem.
If you own property in more than one state such as a timeshare, rental property or vacation home, you can save your loved ones considerable expense and headaches by planning ahead. A lawyer at Peach State Wills & Trusts can develop the right strategy to protect your family while conserving your hard-earned resources, especially when you own multi-state real estate.
The Problem with Probate
Probate is a court-supervised process of ensuring that a deceased person's debts are paid, taxes are filed, and that their remaining property goes to the right person. The process opens by filing petitions in court and having a judge rule on the validity of the will and authorizing the executor to administer the estate. If there is no will, probate is still required, but the procedures differ slightly.
The executor must accomplish certain tasks in accordance with legal requirements, and because most people don't know what those requirements are, they hire a lawyer to manage the probate process. It can take up to a year or more to complete, and the heirs do not receive their property until the end.
Administering an estate in one state is bad enough, but imagine having to go through the process in two states at once. If someone has real property in their estate at the time of death, that estate must go through probate in the state where the property is located. Family members have twice as much work, and they have to pay twice as much to get everything accomplished in accordance with legal requirements. But there is a way to avoid this problem entirely.
Bypass Probate with a Revocable Living Trust
The key factor, for probate requirements, is the type and value of property in a person's probate estate at the time of death. Certain property never becomes part of the probate estate because it passes to beneficiaries or co-owners automatically. So, if you can ensure that the real estate passes directly without becoming part of the probate estate, then probate will not be necessary.
Estate planning attorneys create a specific type of revocable trust to avoid probate. It is often called a living trust because you make use of it during your lifetime. Property owned by the trust passes directly to beneficiaries after the creator's death, so it never becomes part of the probate estate and never needs to be probated.
Transferring Ownership of Real Estate
Creating a revocable trust is the first step in the process of bypassing probate for multi-state real estate holdings. The next step is to formally transfer ownership of the property to the revocable living trust. This is accomplished by having a real estate attorney create a new deed and then registering the new deed with the appropriate county. Generally speaking, when the property is transferred to a revocable living trust created by the property owner who is a beneficiary of the trust, and occupancy rights of the property are not transferred, the due-on-sale clause in a mortgage cannot be triggered under a federal law known as the Garn-St. Germain Depository Institutions Act of 1982. But that law does not apply to commercial property or residential property that has more than five units. Avoiding problems with the due-on-sale clause in mortgages is another reason to ensure you are working with experienced lawyers in protecting yourself and your family.
Peach State Wills & Trusts Can Protect You From Unnecessary Legal Expenses for Multi-State Property
Estate planning encompasses far more than most people realize. The experienced team at Peach State Wills & Trusts can protect your family and your assets with a comprehensive plan that covers everything from real estate to health care needs. To get the right strategy to manage your real estate without unnecessary expense and headaches, contact us today.