It is nice to own a second home in another state where you can spend quality time with the people that you care about. The getaways are life affirming, and real estate is a good investment, so it is a win-win situation if you are in a position to purchase a vacation property.
On the estate planning front, there is a consideration with regard to the administration phase, and we will look at it here.
The Probate Process
If you use a will to record your final wishes with regard to asset transfers, the executor that you name in the document would admit the will to probate. The court would provide supervision while the executor is completing the estate administration tasks.
They will notify creditors about the passing of the decedent, and final debts will be paid, including taxes. In some instances, the executor will bring in a tax accountant and a probate lawyer, and there can be liquidation and appraisal expenses.
The executor is entitled to remuneration, so a noticeable portion of the estate can be spent during the probate process. It is time consuming, and no inheritances are distributed until the estate has been probated and closed by the court.
Anyone that is interested can access probate records to get all the details, so privacy is lost when an estate passes through probate.
Probate is not very appealing if you are an heir to an estate, and two different probate processes would certainly add to the complications. If you are transferring vacation property that is located out-of-state through the terms of a will, ancillary probate would be necessary.
This is an additional probate process that would take place in the state where the property is located.
Revocable Living Trust
If you are in this situation, you can avoid probate altogether if you utilize a revocable living trust as your asset transfer vehicle. You do not have to worry about losing control of the assets because you would act as the trustee while you are alive and well.
When you establish the trust, you designate a trustee to step into the administrator’s role after your death. You can use a family member, a friend, or a trusted colleague, and you can alternately engage a trust company or the trust department of a bank.
To prepare for possible incapacity, you could give the successor trustee (or someone else) the power to act as a disability trustee. Of course, your heirs would be the beneficiaries of the trust.
After your death, the trustee would follow the instructions that you leave in the trust declaration and distribute assets to the beneficiaries. The probate court would not be involved in any state, so the estate administration process would be simplified and streamlined.
Assets in the trust would be protected from the beneficiary’s creditors because it would become irrevocable when you die. If you want the trustee to distribute assets incrementally over time, you can dictate these terms when you create the trust declaration.
Attend a Free Webinar!
We enjoy interacting with our neighbors in real time at are estate planning webinars. They cover the most important aspects of the process, and they are offered free of charge, so you should definitely take advantage of this opportunity to build on your knowledge.
You can see the dates if you visit our webinar page, and when you identify the session you would like to attend, follow the registration instructions so we can reserve your spot.
Need Help Now?
If you already know that you should work with an Essex Junction, VT estate planning lawyer to put a plan in place, there is no time like the present.
As you can see, there can be unusual circumstances that a layperson may not consider. When you choose our firm, we will gain an understanding of your situation and explain your options so you can make fully informed decisions.
At the end of the process, you will go forward with a custom crafted plan that ideally suits your needs.
You can schedule a consultation appointment right now if you call us at 802-879-7133, and you can use our contact form if you would rather send us a message.
- These Estate Planning Myths Can Lead You in the Wrong Direction - September 9, 2021
- Vacation Home Owners: Be Aware of Ancillary Probate - September 2, 2021
- It’s Important to Have a Coordinated Estate Plan - August 31, 2021