When someone dies, their estate (or some part of it) may have to go through probate before their assets can ultimately be distributed to their heirs and/or beneficiaries. Probate generally occurs in the state where they were domiciled. However, things can get a little more complex when the deceased owned property in multiple states.
In that situation, an additional process called “ancillary” probate may be required in each state where the deceased owned real property solely in their name.
Why would an estate need multiple probate proceedings?
Each state has its own laws when it comes to the transfer of real estate. The probate court in one state generally doesn’t have the authority to transfer ownership of property located in another state, so ancillary probate resolves the issue.
For example, suppose a California resident dies owning a vacation home in Arizona. There is no co-owner or transfer-on-death deed in place. The primary probate proceedings would typically take place in California. However, the executor would also likely need an ancillary probate process in Arizona to transfer ownership of the vacation home to its intended beneficiary.
The reverse could also be true for people who live elsewhere but maintain property in this state. California Probate Code – PROB § 12510 allows an interested party or an out-of-state personal representative to petition the court to open ancillary probate proceedings here.
What happens during ancillary probate?
Ancillary probate is generally limited to the assets located in the second state, so that can make the process considerably shorter and less involved than the primary probate case. Depending on the circumstances, it may involve:
- Filing the necessary documents with the appropriate court, including information about the primary probate proceedings.
- Obtaining legal authority to manage the property located in that state.
- Identifying and resolving valid creditor claims or other obligations that could affect the property.
- Distributing the property to the appropriate beneficiaries (or selling it, when necessary to pay debts or divide the asset).
While generally more focused, ancillary probate can still add considerable expense and frustration to estate administration, particularly when there is real estate scattered in various locations.
Fortunately, owning property in another state doesn’t automatically mean a second probate proceeding is required. Property held in a properly funded revocable living trust generally passes outside probate. Certain forms of joint ownership and property with beneficiary designations can also transfer directly to their intended recipients, bypassing probate.
For those who own vacation homes, rental properties or other real estate outside California, these possibilities are worth evaluating when you are creating or updating your estate plan.