Do you own real estate? Vacation homes? Timeshares? Investment real estate in multiple states? If you do, you need to know what is ancillary probate and how to avoid ancillary probate in your estate plan in Ohio.
No matter where a person is when they pass away, or where they were living at the time of death, real estate must pass to beneficiaries in the state in which it sits. That is, if you live in Ohio at the time of your death, but own a timeshare in Orlando, transferring that timeshare to your beneficiaries through a will must happen in a Florida court. This means that there will be two probate cases for your estate: one in Ohio and one in Florida.
What is Ancillary Probate in Ohio
The probate process in Florida, the state where you did not live but in which you owned real estate, is called ancillary administration. The probate process in Ohio, your permanent residence at the time of death, is called domiciliary administration.
Two probate cases mean twice the fees, twice the court costs, and often twice the time or more. If you own real property in multiple states, it’s best to plan ahead so that when you pass away, the property passes to your beneficiaries outside the ancillary probate process.
How to Avoid Ancillary Probate in Ohio
There are many different ways to incorporate multi-state real property into an estate plan that will avoid the time and expense associated with ancillary probate in Ohio. A comprehensive estate plan will look to the nature of the property, whether it has any liens against it, and the law of the state in which it sits to make the right plan for you. Two options for disposing of ancillary real estate are explained below.
Transfer-On-Death Designation:
In the state of Ohio, owners of real estate may designate a transfer-on-death beneficiary for real estate by submitting a sworn statement naming the beneficiary to the county auditor and recording the statement with the county recorder. After the owner passes away, the beneficiary simply does the same with another sworn statement that the owner passed away and a certified copy of the death certificate and the transfer is done. There is a minimal recording fee, no interference or supervision by the courts, and attorney fees associated with the process are minimal.
As of June 2014, 21 states and the District of Columbia will allow property owners to execute transfer-on-death deeds to pass their real estate outside of probate. If you live in Ohio, but own property in one of these 21 other states, you can execute a transfer-on-death deed in that other state. After you pass away, the beneficiary named in the deed will take title without the need for ancillary administration in the probate court.
Trusts:
If you own property in a state that does not allow real estate to pass via a transfer-on-death deed, you might use a trust to avoid probate. By placing your property in a trust before you pass away, you can achieve essentially the same transfer-on-death process without supervision of a probate court. Plus, a trust is a very useful tool for avoiding probate in your domiciliary estate as well. When you consider that the cost to probate a timeshare in Florida runs $2000 or more, and a trust can keep that timeshare out of the Florida court and do many more things besides, investing in a trust is a very cost-effective way to dispose of real property while avoiding ancillary probate.
In order for the trust to be effective in avoiding ancillary probate administration, the property in question must be titled to the trustee of the trust BEFORE you pass away. If you simply leave the property to the trust in your will, your executor will be required to first probate the will to pass the property to the trust, then pass the property from the trust to you beneficiaries.
As always, our Columbus estate planning attorney is eager to help you make a comprehensive estate plan that will make administration as simple and inexpensive as possible. Please call us if you have questions on what is ancillary probate and how to avoid ancillary probate in Ohio. We can assist you in making the right plan for your real estate.