ESTATE PLANNING: Wills can be used to transfer out of state property

2012-11-11T00:00:00Z ESTATE PLANNING: Wills can be used to transfer out of state propertyChristopher W. Yugo Times Business Columnist
November 11, 2012 12:00 am  • 

Q: You’ve written that probate laws vary from state to state and that Indiana’s laws can’t control property in another state. If that’s the case, how can an Indiana will control property located in another state? Do you need a will executed in the other state also?

A: The simple answer is that you don’t need two wills; one will do ya.

It’s true that probate laws are critters created by states. You’re not going to find many federal probate laws. Tax laws, yes, but probate laws, not likely.

It’s also true state laws tend to stop at the state’s borders. Property in Indiana is controlled by Indiana’s probate laws. Property in Illinois is controlled by Illinois’ probate laws.

However, that doesn’t mean that states won’t recognize a will created in another state. Most if not all states have laws that specifically recognize wills created in another state. If you created a valid will in Illinois and moved to Indiana, it will likely be recognized as a valid will in Indiana.

If a person resides in Indiana but owns real estate in another state such as Wisconsin, the valid Indiana will likely can be used to transfer the Wisconsin real estate. That doesn’t mean the transfer will take place under Indiana’s probate laws but rather using a valid Indiana will.

The formal probate process used to transfer out-of-state real estate is known as an ancillary estate. An ancillary estate is simply a probate estate opened in a state other than the decedent’s home state to transfer real estate located there.

If an issue relating to an out-of-state will arises in an ancillary estate, it usually involves issues regarding who has the original will. Probate courts like to have the original will filed in the case. Since an ancillary estate is a formal probate process, it only stands to reason the court will want to see the original will. However, that might be impossible if the original will has been filed in the decedent’s home state. In these situations, the court will usually require a copy of the will be certified in the decedent’s state court and that a certified copy be filed with it.

Although the validity of the will isn’t likely to be an issue when dealing with out-of-state property, I’m a firm believer in avoiding the situation entirely. Using a trust is an excellent way of avoiding the ancillary estate entirely. It’s usually cheaper, faster and comes with a lot fewer hassles. It also eliminates issues of the decedent’s will entirely.

Opinions are solely the writer. Christopher W. Yugo is an attorney in Crown Point. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Yugo’s information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.

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