The Problem of Owning Real Estate in Other States

Let us say you are the personal representative of your father's estate.  Your father lived and passed away in Minnesota.  As you are listing the assets of his estate, you discover that your father owned a small piece of real estate in California and another piece of real estate in Florida.  You have started the probate process in Minnesota, but what do you do about that out-of-state real estate?

Unfortunately, if a decedent owns real property in other states, Minnesota probate courts lack jurisdiction over that property.  Therefore, you would also have to go through the probate process in the other states in order to transfer title on those other properties.  This is referred to as “ancillary probate” and can add considerable expense to the probate process, especially when the property is located in states with traditionally more expensive probate procedures.

It's not uncommon for Minnesotans to own property in warmer states in order to escape for the winter.  Fortunately, with proper estate planning, you can avoid having to go through ancillary probate.  One way is to set up a Living Trust (or inter vivos trust) in Minnesota.  These trusts are set up while you are alive (hence the name).  You can then transfer the out-of-state real estate to the trust, allowing the property to pass according to the terms of the trust at your death and thus, avoiding ancillary probate.

Speak to an estate planning attorney if you find yourself in this situation and would like to avoid future expenses and hassles for your family.