Now that we have been enjoying the summer months, many people are spending time in their vacation homes. It is great to be able to get away from the grind and spend quality time with your family and friends. Plus, you make a good investment when you purchase carefully selected property.
From an estate planning perspective, you have the ability to pass the home along so family members can continue to reap the benefits. However, if the vacation home is going to be part of your estate, you should consider the potential impact of ancillary probate.
Transfers Through the Terms of a Will
If you use a will to state your final wishes regarding the distribution of your estate, it will be admitted to probate. This is a legal process that takes place under the supervision of a court. The executor that you name takes care of the hands-on tasks, and the court will preside.
During probate, final debts are paid, and the validity of the will is confirmed if everything is in order. Meanwhile, the executor will identify and inventory the assets, and they will be prepared for distribution to the heirs.
All of this is time-consuming, and the exact duration will depend on the relative complexity of a given estate. The best case scenario is about nine months from start to finish, and no inheritances are distributed during this interim period.
Probate expenses consume a portion of the estate, and this is another negative. Plus, probate records can be accessed by interested parties, so there is a loss of privacy.
The probate procedure would take place in Connecticut if you were a resident of our state. One probate process is more than enough, but the situation is magnified if a vacation home is part of your estate.
If it is located in another state, there will be a second ancillary probate process in that state. This complicates the matter considerably, and you should keep this in mind when you are developing your estate plan.
Revocable Living Trust
You can proactively prevent an ancillary probate proceeding if you use a revocable living trust instead of a will as your primary asset transfer vehicle. While you are living, you would be the trustee, so you would control the assets on every level.
In the trust declaration, you name a successor trustee to assume the role after your death. This is a position that is similar to that of an executor. Any willing, competent adult can be designated as the trustee. If you don’t know a suitable candidate, you can go with a professional fiduciary such as a trust company.
Regardless of the location of the property, the trustee would be able to distribute it outside of probate. As a result, the drawbacks of the process would be completely avoided. This is one major benefit that living trusts provide, and there are others that we will look at in a future post.
Attend a Complimentary Seminar!
If you would like to learn more about estate planning, attend one of our upcoming seminars. They are held at nice locations in our service areas, and they are offered on a complimentary basis.
You can see the dates if you head over to our seminar schedule page. When you identify the session you would like to attend, please follow the instructions to register so we can reserve your seat.
Ready to Act?
Our doors are open if you are ready to take action. Each situation is different, and they are nuances like the matter of out-of-state home ownership. When you choose our firm, we will provide personalized attention. At the conclusion, you will emerge with a custom crafted plan that is ideal for you and your family.
You can send us a message through our contact form to request a consultation with a Glastonbury estate planning lawyer, and we can be reached by phone at 860-548-1000.
- Estate Planning and Vacation Homes - November 24, 2022
- What Documents Are in a Complete Estate Plan? - November 10, 2022
- What Can Good Estate Planning Do for You? (Part 2) - October 27, 2022