Owning real estate in more than one state is common.
What many property owners don’t realize is that this can create unexpected legal and financial complications after death—especially when no planning has been done in advance.
One of the most common questions that comes up is:
Do I need a trust if I own property in another state?
In many cases, the answer is yes—or at least, it’s worth serious consideration.
The Multi-State Property Problem
When someone owns property in a state where they do not live, their estate may need to go through multiple probate proceedings.
For example:
- A person lives in Virginia
- Owns a property in Maryland
- Passes away
Even if probate is completed in Virginia, Maryland will typically require a separate proceeding to transfer the Maryland property.
This is known as an ancillary estate.
For further information, visit:
https://gentileproplaw.com/what-is-an-ancillary-estate/
The Cost of Doing Nothing
Ancillary estates add:
- Time
- Administrative complexity
- Additional legal fees
- Probate costs based on the value of the property
In Maryland, these costs can effectively approach 1% of the property value.
How a Trust Solves the Problem
A revocable living trust can simplify this issue significantly.
If the out-of-state property is:
- Transferred into the trust during lifetime, and
- Properly titled in the trust’s name
Then:
- The trust owns the property
- Probate is not required for that asset
- No ancillary estate is needed
This allows the property to pass according to the trust terms without court involvement.
The Key Step: Funding the Trust
Creating a trust alone is not enough.
To be effective, the trust must be funded, which means:
- Preparing a deed
- Transferring the property into the trust
- Recording the deed properly
Without this step, the property remains in the individual’s name—and probate is still required.
Are There Alternatives to a Trust?
In some cases, other options may be considered, such as:
- Transfer on Death (TOD) deeds
- Joint ownership
However, these approaches:
- Are more limited in scope
- May not address all estate planning goals
- Can introduce their own complications
A trust is often the most flexible and comprehensive solution, particularly for multi-state ownership.
When a Trust Makes the Most Sense
A trust is especially useful if you:
- Own property in more than one state
- Want to avoid multiple probate proceedings
- Prefer a streamlined transfer process
- Are coordinating real estate with a broader estate plan
The Bottom Line
Owning property in another state can create unnecessary complications after death if no planning is done.
A properly funded trust can:
- Avoid ancillary probate
- Reduce administrative burden
- Simplify the transfer of property
In many cases, it is one of the most effective tools available for multi-state property owners.
Need Help Structuring a Trust for Real Estate?
If you:
- Own property in multiple states
- Are considering a trust
- Want to avoid ancillary probate
- Or need help transferring property into a trust
Planning ahead can make a significant difference.
For more information about estate planning and property transfers, visit:
https://gentileproplaw.com
To discuss your situation, you may contact Gentile Property Law Office, LLC here:
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