If a decedent dies leaving real estate or tangible personal property in the decedent’s individual name in two states, two estate proceedings may be necessary. The decedent's property in the domiciliary state will fall under the primary estate proceeding and court rules of that state. However, the decedent's property in the non-domiciliary state may require an ancillary estate proceeding, which will follow the court rules of the non-domiciliary state.
What Is an Ancillary Estate Proceeding for Out-of-State Property?
An ancillary proceeding to transfer a decedent's property will likely incur additional court paperwork and filing fees. In addition, an ancillary estate proceeding will be supervised under an attorney licensed to practice in that state. This becomes particularly important when managing property out of state, because different jurisdictions impose different procedural requirements.
Why Out-of-State Property May Trigger Two Estate Proceedings
If the decedent owns property outside of the domiciliary state at the time of death, the estate fiduciary who was appointed in the domiciliary state will need to initiate a separate, additional, proceeding in the non-domiciliary state. This process has the potential to become especially complicated if the decedent did not own property requiring an estate proceeding in the domiciliary state, but owned property requiring an estate proceeding in the non-domiciliary state. In this case, a primary estate proceeding must be brought in the domiciliary state prior to the ancillary proceeding in the non-domiciliary state.
For example, the decedent dies a domiciled resident of New York, but has a vacation home in Florida. If the decedent has no assets in their individual name in New York, but owns the real estate in Florida in their individual name alone, an estate proceeding will be necessary in both New York and Florida in order to transfer the Florida property. This is a common concern for individuals who have two homes in different states or who are managing property out of state.
How to Avoid Ancillary Proceedings for Out-of-State Property
There are steps you can take during your lifetime to avoid the time and expense of an ancillary proceeding on your death:
- Place the out-of-state property into a trust, LLC or family partnership
- Add a co-owner to the out-of-state property
- Place a beneficiary designation on the out-of-state property, if available (note that this may have undesirable estate tax consequences which must be considered)
- Sell or gift the property
If you have real or tangible personal property outside of your domiciliary state, be sure to include that in your estate planning discussions with your attorney so you are aware of the disposition requirements on your death.
FAQs: Managing Out-of-State Property After Death
When an ancillary estate proceeding is not required for out-of-state property?
An ancillary proceeding may not be required if the out-of-state property passes outside probate (for example, through a living trust, joint tenancy with right of survivorship, or a transfer‐on‐death deed) or if no probate is required under the domiciliary or non-domiciliary state’s laws.
Are all types of out-of-state property subject to ancillary probate?
Not always. Ancillary probate is generally required only for real estate or certain tangible personal property titled solely in the decedent’s name in another state. Assets such as bank accounts or investment accounts are typically governed by the law of the decedent’s domicile or by the state where the account or title is registered and may pass via beneficiary designations, joint ownership, or other probate-avoidance structures. What triggers ancillary administration ultimately depends on each state’s statutory probate requirements.
What costs and delays should I expect when there is an ancillary estate proceeding for out-of-state property?
Additional costs can include court filing fees in the non-domiciliary state, attorney fees in that state, and administrative delays due to remote document requirements. The time for ancillary proceedings varies by jurisdiction and can add significant burden beyond the primary estate proceeding.
Can estate planning vehicles like LLCs or family partnerships eliminate the need for an ancillary proceeding on property in another state?
Yes. When property is titled in an entity (such as a trust, LLC, or partnership) rather than the decedent’s individual name, that asset may avoid triggering a separate ancillary estate proceeding in the non-domiciliary state because the decedent does not individually own the asset at death.