Creating a trust is a wonderful way to avoid probate process for your family.
A question that crops up often is what happens if I own property in another state?
Do you have a vacation home in another state or a family residence outside of California? If so, your family is exposed to having to deal with probate court not just in one state, but in two.
As I’ve described in previous videos, creating a trust is a wonderful way to avoid the probate process and plan for your family. However, if you don’t transfer all of your assets into the trust, there is a risk that your family will still end up dealing with the courts.
In addition, for individuals that pass away owning a property in their own name in another state, their families are likely to need to go through something called ancillary probate.
As you can guess from the name, ancillary probate is not a pleasant thing for your family members to have to deal with after you’re gone. It’s the court process involved when an individual dies owning property in multiple states.
For example, suppose I establish and fund a California trust, but I forget to transfer my vacation home in Montana into the trust. In that case, my family will have to distribute. In that case, my family will have to probate my estate to distribute the Montana property according to my estate planning.
It doesn’t matter if the property is mentioned in your last will and testament. It doesn’t even matter if the Montana property is listed in your trust document.
Listing real estate in your trust document is not enough to avoid probate. The asset has to actually be transferred.
So the way this would work in practice is we would contact an attorney in Montana who would help to transfer the Montana property into your California trust.
It’s therefore crucial to inform your attorney about all of your assets.
When it comes to your estate planning, something as seemingly innocent as having a vacation property can force your family to spend endless time and money when that could have been avoided.
