You've worked hard to build assets for your family's future. Maybe you bought that beach cottage in Florida or invested in a rental property in another state. While these properties represent smart financial decisions, they can create unexpected complications for your loved ones when it comes to estate planning. If you own property outside of New York, your estate plan needs special attention to avoid putting your family through multiple, costly legal proceedings.
The Challenge: Ancillary Probate
Here's the situation many New York families don't anticipate: when you pass away owning real estate in another state, your family may need to go through probate twice—once in New York and again in the state where that property is located. This secondary process is called "ancillary probate," and it can turn an already difficult time into an extended, expensive ordeal.
Think about it from your family's perspective. They're grieving, trying to handle your New York estate, and suddenly they discover they need to hire an attorney in Florida, Pennsylvania, or wherever else you owned property. Each state has its own probate laws, filing requirements, and timelines. Your executor might need to appear in court in multiple states, coordinate with different attorneys, and pay separate legal fees for each jurisdiction.
The costs add up quickly. Attorney fees, court costs, and administrative expenses in multiple states can easily run into thousands of dollars. The timeline extends too—what might take six months in one state could drag on for a year or more when you're managing multiple probate proceedings simultaneously.
Why New York Planning Isn't Enough
Many people assume their New York will covers everything they own, regardless of location. While a properly executed New York will is generally recognized as valid in other states, it doesn't bypass the need for probate in those jurisdictions. Real estate is governed by the laws of the state where it's physically located, not where you live.
This means that even with a comprehensive New York estate plan, out-of-state property requires additional probate proceedings. Your New York will directs what happens to the property, but the state where the property is located controls how that transfer actually occurs.
Smart Solutions to Protect Your Family
The good news? With proper planning, you can protect your family from the burden of multiple probate proceedings. Here are the most effective strategies:
Revocable Living Trusts: The Comprehensive Solution
Creating a revocable living trust is widely considered the most effective way to avoid ancillary probate. When you transfer your out-of-state property into your trust, the trust becomes the legal owner—not you personally. Since the trust doesn't die, the property doesn't go through probate in any state.
You maintain complete control during your lifetime. You can still sell the property, refinance it, or change beneficiaries. But when you pass away, the successor trustee can distribute the property according to your wishes without court involvement, regardless of where it's located.
A single revocable living trust can hold properties in multiple states, providing a streamlined solution for families with diverse real estate holdings. This approach also offers privacy, as trusts typically don't become public record the way probate proceedings do.
Joint Ownership with Right of Survivorship
Another option is holding property jointly with your spouse or another family member with "right of survivorship." When structured properly, the property automatically transfers to the surviving owner without probate.
This works well for married couples, but it has limitations. You're immediately giving that person co-ownership, which may not align with your broader estate plan. It also doesn't help if you want the property to go to multiple children or other beneficiaries.
Limited Liability Companies
For rental properties or business real estate, forming a Limited Liability Company (LLC) to hold the property can simplify estate planning. Instead of owning real estate directly, you own an interest in an LLC—which is considered personal property. Personal property is generally handled through probate in your state of residence, not where the property is located.
This strategy requires careful setup and may have tax implications, so it's essential to work with an experienced attorney who understands both estate planning and business law.
What This Means for Brooklyn Families
If you're a middle-income family in Brooklyn with out-of-state property, addressing these issues now can save your loved ones significant stress and expense. Whether it's a vacation home, inherited property, or an investment, that asset needs to be integrated into your estate plan thoughtfully.
The key is acting before problems arise. Once you've passed away, your family's options become limited. But with proactive planning, you can structure your estate to avoid multiple probate proceedings, reduce costs, and ensure your assets transfer smoothly to the people you love.
At Alatsas Law Firm, we help Brooklyn families navigate the complexities of multi-state estate planning. We understand the unique concerns facing middle-income families—you've worked too hard to see your assets eaten up by unnecessary legal fees or tied up in multiple court proceedings. Our approach considers your entire financial picture, including out-of-state property, to create a comprehensive plan that protects your family's future.
Don't wait until it's too late. If you own property outside New York, now is the time to review your estate plan and make sure it addresses these challenges. Your family will thank you for taking this important step to make their future easier during what will already be a difficult time.
