If you own out of state property, it’s almost a certainty that you and your family will be better served by a trust instead of a will.
Why is that?
First, consider that probate is unavoidable with a will. Many of my clients arrive at my office assuming that probate is only for those that are intestate, or without a will. The decedent’s loved ones are often confused and frustrated with the hassles and paperwork involved in probate when they are already going through a difficult time.
Secondly, if you own out of state property, your loved ones will not only have to go through probate in the state in which you live, but they will have to have probate cases opened up in each state where a piece of land, vacation home or timeshare is owned. This is known as Ancillary Probate.
When you consider the cost of hiring multiple attorneys for multiple probates, and you consider the headaches that your heirs will go through in dealing with each state’s differing laws, and in re-titling property…a revocable living trust is likely to be much more cost-effective in the long run.
However, it’s important to understand that under Florida law, these living trusts will still be subject to creditor claims for up to two years.
What about titling property jointly with rights of survivorship?
Wouldn’t that avoid probate, as well as the fees involved in a trust?
Yes, there are some cases in which that would be an excellent option.
But, in general, we advise against joint accounts and titling. You can read more in our earlier blog post, Poor Man’s Probate is Usually Poorly Planned. No one has a crystal ball, and what seems like a very simple solution to passing assets to loved ones can have very sad consequences.
For example, if your ambitious daughter, who always got straight A’s, ends up being sued or garnished due to a failed business venture, the bank accounts or assets that you’ve put her name on as co-owner are subject to disappear.
The same philosophy can be applied to investment accounts and life insurance policies. It is much safer to title assets in an individual name or trust than as co-owners. No one can predict divorces or lawsuits, and it is better to not have your assets at risk in those cases.
A consultation with an experienced estate planning attorney will help you draft a plan that offers the most protection for your family and your situation.