This is the time of year when some people spend time in their vacation homes. If you are fortunate enough to have a getaway out-of-state, you can enjoy your spare time to the fullest. Family members and friends can come by, and lasting memories are created.
From an estate planning perspective, many people keep vacation homes and their families because they want to keep the tradition rolling. If you are among them, you should understand what ancillary probate is about.
If you use a will to facilitate asset transfers after you are gone, you name an executor. This individual or professional fiduciary will handle the estate administration tasks. They cannot act independently under Illinois state laws. The will would be admitted to probate, and the court will provide supervision.
This process serves a purpose, because there is oversight when the estate is being administered. Creditors are notified so they can be paid before the assets are distributed to the heirs. The court will determine the validity of the will, and challenges can be presented during probate.
Meanwhile, the executor will inventory the assets and prepare them for distribution. This will often include appraisals and liquidation of property, and this can be time-consuming. In all, probate will take about eight or nine months to run its course if there are no complications.
The inheritors receive nothing while the estate is being probated. This is definitely a drawback, and it is a public proceeding. Interested parties can access the records to find out what transpired, so there is a loss of privacy.
Expenses include a filing fee, attorney and accounting fees, appraisal and liquidation charges, and the executor’s remuneration. When you add in the incidentals, a relatively significant portion of the estate can be consumed during probate.
One probate procedure will complicate the administration process. The last thing you need is two separate concurrent proceedings. However, this will be the reality if an out-of-state vacation home is part of your estate.
There will be an ancillary probate process in that state. This will make matters much more complicated. This is something to consider when you are developing your plan.
Revocable Living Trust
Fortunately, there is an easily implemented solution in the form of a revocable living trust. The person or entity that administers a trust is called the trustee. You would be the trustee while you are living. As a result, you would maintain complete control of the assets in every way.
When you are drawing up the trust, you name a successor trustee to take over after your passing. They will follow your instructions with regard to the way you want the assets to be distributed. The probate court will not be involved during the administration process. This applies to the local court and the out-of-state court, so all the hassles are avoided.
This is one benefit of probate whether you have out-of-state property or not, and there are others. We will not look into them here, but stay tuned, because we will examine them in an upcoming post.
Attend a Free Workshop!
We conduct workshops periodically that shed light on some very important estate planning topics like this one. You will come away with a lot of important knowledge if you join us, and there is no charge, so this is an ideal opportunity.
To see the dates, visit our seminar schedule page and follow the instructions to register if you decide to join us.
Ready to Act Today?
If you are here because you have decided that it is time to work with a professional to put a plan in place, we are ready to spring into action. You can call us at 630-568-8611 to schedule a consultation appointment at our Naperville or North Aurora, IL estate planning office. There is also a contact form on this site you can use to send us a message.