Probate avoidance or minimization is one of the goals of estate planning. It is especially significant if you own property in many states. Why? Because you must probate every piece of real estate titled in your name in each state of its location. When probate is necessary for owning real estate in multiple states, the costs included in the process can increase drastically.

Real estate probate costs

Probate is the legal process of administering your estate under the supervision of the court. To display just how pricey the probate process can be, for example, your representative will need to:

• Hire a probate lawyer in each state
• File specific documents in each state
• Deal with other duplicate administrative requirements

In addition to the extra expense, the process may delay your estate.

The simplest method to prevent repeated probate proceedings if you establish a revocable, or “living,” trust is to guarantee that the trust maintains title to all of your real properties. In most cases, this entails drafting a deed transferring ownership of each property to the trust and recording it in the property’s local county. Property kept in a revocable trust is often exempt from probate.

If you own real estate in multiple states

We can assist you in the decision to transfer real estate to a revocable trust by finding unfavorable tax or estate planning ramifications. Will moving your home to a trust, for example, affect your eligibility for homestead exemptions or other tax breaks? Will the property’s mortgages be affected by the transfer? Are there going to be any real estate transfer taxes?

It’s also worth thinking about how changing the title to a property may influence the amount protected against creditors’ claims. If you have any questions or need further assistance, please contact our RRBB accountants and advisors.

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