Many people are surprised to learn that owning property in more than one state can create complications for their loved ones after they pass away.

Over the years, I have spoken with countless families who have worked hard to build a legacy. For some, that means a family cabin in the Poconos and a retirement home in Florida. For others, it may mean rental properties in different states or inherited land that has been in the family for generations. While owning property across state lines can be a wonderful asset, it can also create challenges if your estate plan is not designed to account for those different jurisdictions.

The good news is that with proper planning, many of these issues can be addressed before they become a burden on your family.

Why Multi-State Property Requires Additional Planning

When you own real estate, the laws of the state where the property is located generally govern how that property is transferred after your death.

As a result, a Pennsylvania resident who owns real estate in another state may require additional legal proceedings to transfer that property, even if they already have a Will in place.

Understanding Ancillary Probate

One of the most common concerns for families who own property in multiple states is something called ancillary probate.

Ancillary probate is a secondary probate proceeding that may be required in another state when a person dies owning real estate there.

For example, imagine a Pennsylvania resident owns a primary residence in Wayne County and a vacation condominium in Florida.

When that individual passes away, their estate may need to go through probate in Pennsylvania, and a separate probate process in Florida before the Florida property can be transferred to beneficiaries.

This can create additional legal fees, court costs, administrative delays, and more paperwork for loved ones. For families already coping with the loss of a loved one, these additional steps can be frustrating and time-consuming.

How Trust Planning Can Help

A properly funded revocable living trust can often help avoid these issues.

When real estate is owned by a trust rather than an individual, the property can typically pass according to the terms of the trust without requiring separate probate proceedings.

However, creating a trust is only part of the process. The property must also be properly transferred into the trust during your lifetime.

Coordinating Tax Planning and Other Assets

When planning for multi-state property ownership, it is important to consider more than just the real estate itself.

Different states may have different inheritance, estate, and income tax rules. For example, Pennsylvania imposes an inheritance tax, while other states may have different tax systems, exemptions, or filing requirements. Owning property in multiple states can create additional planning opportunities and considerations that should be addressed as part of your overall estate plan.

It is equally important to coordinate your other assets, including retirement accounts, life insurance policies, investment accounts, and business interests. A well-designed estate plan ensures that all of your assets work together to achieve your goals, minimize unnecessary complications, and provide for your loved ones according to your wishes.

Final Thoughts

Owning property in multiple states can be a valuable part of your legacy, but it often requires additional planning to ensure those assets pass efficiently and according to your wishes. Reviewing your ownership structure, beneficiary designations, and trust planning can help minimize complications and provide greater peace of mind for your loved ones.

If you are a Pennsylvania resident who owns out-of-state property and would like to better understand how those properties fit into your overall estate and tax plan, I invite you to schedule a complimentary consultation with my office by using the link below.

https://thelawofficeofscottlynett.cliogrow.com/book/fd5f91f5a23f0a238a1b08d104b030cb