Does My Estate Plan Need to Include My Vacation Property? Oct 31, 2017 Yes! If you own a vacation home, timeshare, investment property, or any other real estate outside of the state where you are domiciled has to be addressed in your estate plan. If anything, this situation makes a trust vital. If you do not adequately plan for out-of-state vacation property and other real estate, your loved ones will face a complicated situation where it will be easy to make a mistake or miss something. Real estate law varies from state to state, which means that if you are not careful, your property may be divided differently from state to state. Avoiding Unnecessary Probate All of your property, except for real estate, is administered in the county where you live when you pass away. Real estate is administered in the county where it is located. This means that your loved ones will have to go through the administrative and retitling process in every individual state where your real estate is located. And this administrative process, called probate, also varies from state to state and can be very costly, even for one property. Fortunately, the additional probates, called ancillary probates, can be avoided with proper estate planning. One option is using joint tenancy, either between you and your spouse or with someone else. Joint ownership with your spouse, however, merely delayed probate to after both of your pass. Joint ownership with someone else can complicate your current ownership and increase taxes after you pass. This leaves you with the option of using a trust. A properly planned and funded trust will completely avoid ancillary probates, save on taxes via the principle of basis adjustment, and maintains your control and protection of your property while you are alive. Bottom Line on Vacation Property Estate planning laws vary from state to state, which can complicated your estate after you pass and if you own real estate or vacation property in other states. However, if you have an appropriate estate plan, you can continue to control your property while alive, you can reduce taxes, and avoid ancillary probate. When you are dealing with multiple properties, working with an estate planning attorney is especially vital. While working with the attorney, remember to disclose all your property information, including even your vacation property, as your attorney will need that information to help you create the personalized and appropriate estate plan that you need. If you have any questions about out-of-state property, contact The Rains Law Firm and ask.
