A Tale of Ancillary Probate:  Two and a Half Years, Three States, & Six Separate Probate Proceedings!

For many families, owning land is a rewarding way to build wealth while creating a legacy for future generations.  Indeed, we have lots of clients that are real estate investors and end up acquiring portfolios all over.   But, if a Florida resident owns land located in multiple states and dies without proper estate & trust planning, transferring ownership of the property to his/her heirs can become extremely complex and expensive due to what is known as “ancillary probates.”

In ancillary probate proceedings, the laws of the state where the land is located – not the state in which the decedent resided– dictate what will happen to the property after the owner dies.  The process becomes even more complicated if the property has changed ownership over the years without a corresponding change in the name on the title.

The following case,  involving the Estates of Uncle Harry and Aunt Sally (obviously not their real names), illustrates how mistakes in the administration of the land and the lack of proper estate planning can frustrate the best intentions to create a lasting legacy for heirs.   

Our client Carlos (not his real name) came to see us in 2014 because Carlos a Florida resident, was maintaining and paying property taxes in New Hampshire and Arizona for real estate titled in the name of his long deceased Uncle Harry and wanted to refinance the properties.

A Florida resident at the time of his death, Uncle Harry died in 1982 without a will or a trust and was survived by Aunt Sally.  Later in 1999, Aunt Sally died without a will or a trust, and under the Florida intestacy statute, Aunt Sally’s nearest relative, Carlos (our client), would inherit her estate.

During Carlos’s initial meeting with us, he explained that there was a “slight problem” with the title to the properties – they are still in Uncle Harry’s name.  We informed Carlos that we could handle the Florida probate proceedings relating to his inheritance from Aunt Sally; however, in order to get the land transferred from Uncle Harry’s name to Aunt Sally’s name and then to Carlos’s name, we would have to co-counsel with attorneys in New Hampshire and Arizona regarding the ancillary probate proceedings in each of those states!

We explained to Carlos that ancillary probate in multiple state jurisdictions involve multiple court fees, accounting fees, and attorneys’ fees.  This is on top of the usual reasons we try to avoid probate:  it’s time consuming, expensive, tedious, and totally open to the public eye – anyone can access those court records!

Over two years and many thousands of dollars in legal fees later, we facilitated three probates in three states for Uncle Harry, and three probates in three states for Aunt Sally – just to get the title of the property into Carlos’s name.

That’s a total of six separate probate proceedings and a lot of money out of pocket for Carlos!!

Carlos clearly never wants his family to have to go through this again, so in order to ensure that Carlos’s wife and children were spared the expense and delays associated with probate proceedings, we drafted a trust-based estate plan for Carlos.  As soon as the six probate proceedings were completed and Carlos was named the owner of the properties in Arizona and New Hampshire, we titled the land into Carlos’s living trust.  When Carlos dies, his children would not need to open up a probate in Florida, New Hampshire, or Arizona to inherit the land.   The title transfer after Carlos’s death would be handled by Carlos’s successor trustee, not the probate court.

If you own land, proper estate planning is a necessary step to ensure that the legacy of your land passes seamlessly to your heirs.  In addition to helping ensure the financial security for your loved ones, estate planning can often minimize taxes and enable you to pass on your family’s legacy and assets according to your wishes and without costing your heirs substantial probate fees.

Contact our friendly Client Services Director, Jackie at 305.707.7126 or email her at Jackie@trustcounsel.com if we can assist you in achieving your estate planning goals.