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I often spend time explaining the succession and estate planning processes to the agricultural community and the importance of developing tools that work for their situations. One situation when tools are needed is when the individual resides in one state but owns property in another state. For example, Chris has lived in Maryland for his entire life but has a beach condo in Florida. What happens in that situation if Chris passes away with a simple estate plan, just a will? In this example, the heirs would have to probate the will in Maryland and Florida in a process known as ancillary probate, a probate process taking place in a state other than where the deceased lived.
What Is Probate?
Let’s start by discussing what the probate process is. Probate is the process where a will is produced and established through a judicial process to be the last will and testament of the deceased. In Maryland, the court with jurisdiction over the probate process is the Orphan’s Court in the county where the deceased resided. Through the process, the court determines the validity of the will, the assets, debts, and beneficiaries of the deceased, and either approves or appoints a personal representative. The personal representative will work through the judicial process to pay the deceased’s debts and distribute the property according to the terms of the will. This process can take a year or more, depending on the size and complexity of the estate.
What Is Ancillary Probate?
As mentioned earlier, ancillary probate is a probate proceeding taking place in a state other than where the deceased lived. This will typically happen when the deceased has real property in another state. Looking back at our earlier example, Chris lives in Maryland but owns a beach condo in Florida. The personal representative would need to go through an ancillary probate process in Florida to transfer the beach condo to the appropriate heir effectively. The ancillary probate process will depend on the rules of the state where the real property is located. Some might be simple processes, but others might be more complex and increase costs.
Maryland is a small state where an agricultural operation could own real property across multiple states. The ancillary probate process lengthens the probate process. An estate attorney can talk with you about tools to prevent ancillary probate. The attorney can walk you through strategies that can prevent additional probates in other states. These strategies could include utilizing a trust that would hold the property and prevent the need for ancillary probate. Working with an attorney early on can help limit the need for additional probate proceedings in additional states.