Estate planning is an essential tool for any individual who has assets and real estate, especially if they wish to protect those assets during their life and pass them on to beneficiaries. Estate planning can encompass several different legal documents, but it can quickly become complex if you have a significant number of assets or a complicated estate.
Probate courts only have jurisdiction over property located in that state. If you own real estate in multiple different states, this can further complicate your estate plan. However, planning for these issues is much less complex than failing to make a plan. If you don’t properly plan for your estate and assets in different states, your loved ones and beneficiaries will have to deal with an extensive court process, additional tax implications, and delays in benefiting from your estate.
Estate Planning Solutions for Out-of-State Properties
There are several legal tools that you can use when planning your estate if you own properties in multiple states. These solutions can help your loved ones avoid multiple probate processes in several states and other complicated issues.
One of the most effective tools in avoiding probate is a living trust, also known as a revocable trust. You can create a trust and place your out-of-state real estate into the trust. Because the trust is its own legal entity, the assets will pass to the ownership of the successor trustee after you pass, rather than probate court and state jurisdiction. You can place all assets in your estate in a trust or multiple trusts, or you can place just the out-of-state properties into a trust to avoid the additional probate processes. Trusts enable you to name beneficiaries for each of your assets.
If the property is jointly owned by you and your spouse, and includes the right of survivorship, the property will not enter probate. Instead, after you pass, the property will pass directly to your spouse, without needing to be placed in a trust or listed in your will. You can jointly own with someone other than your spouse, but they may face additional tax consequences that legal spouses will not.
By creating a limited liability company (LLC), you can place real estate into the LLC. This is more effective when the real estate is part of a business, as placing property into an LLC makes it a business. Then, the business can pass to beneficiaries and new owners through an operating agreement. Putting real estate into an LLC does not avoid probate, but it can create a plan for the property.
Individual Estate Plans
You may also want to create an estate plan for each individual state where you own property. This enables you to tailor your estate plan to the unique laws and requirements of that state. However, multiple estate plans can become complex.
Q: What Are the Most Common Estate Planning Mistakes?
A: Some of the biggest and most common mistakes made during estate planning include:
- Not planning your estate. An estate plan protects your interests, your family and beneficiaries, and your estate.
- Failing to update your estate plan. You should update an estate plan every few years and after major life changes. This ensures that it reflects your current wishes for your estate.
- Not appointing an executor. If your will and estate do not have an executor, the court will appoint one. This may not be who you want to manage your estate.
- Failing to name contingent beneficiaries. If a beneficiary to an asset dies, and there is no contingent beneficiary, the asset enters probate.
Q: What Are the 3 Main Priorities That You Want to Ensure With Your Estate Plan?
A: Each individual will have unique goals when creating an estate plan, and the estate plan can adapt to those needs. Some of the common essential priorities in a complete estate plan include:
- Safeguarding your estate and its assets during your life and after your death to provide your family members and beneficiaries with the estate’s benefits
- Giving instructions and powers of attorney to ensure that you are protected at the end of your life if you are unable to make decisions for yourself
- Lowering the amount of time, money, and resources that your family members must spend, thus lowering their stress
Q: Does Nebraska Have a State Estate Tax?
A: Nebraska does not have an estate tax, but it does have an inheritance tax. The state inheritance tax rate depends on the relationship between the deceased and their beneficiary. There is no inheritance tax rate on assets left to spouses. Estates that pass through Nebraska probate court may also be subject to federal estate taxes. Effective estate planning is useful in avoiding probate, thereby lessening the effect that state and federal taxes have on an estate. This can ensure that loved ones see the most benefit from the assets left to them.
Q: How Much Does Estate Planning Cost in Illinois?
A: The cost of creating an estate plan with an attorney in Illinois depends on several factors, and it can range anywhere from $500 to $5,000. A high-value estate will be much more expensive. An estate plan can include just a simple will, or it can include trusts, a will, powers of attorney, and living wills.
The cost also depends on the attorney’s experience and where their firm is located. If you are filing one document, an attorney may charge a flat fee. However, if you are dealing with several documents and/or a complex estate, an attorney will likely charge an hourly fee.
Q: What Is the Succession Law in Oklahoma?
A: If you do not have a valid will in Oklahoma, your estate will go through probate court and be subject to intestate succession laws. If you have a spouse and no children, your spouse receives all marital property and ⅓ of your separate property. The rest of your separate property goes to your parents, followed by your siblings. If you have a spouse and children, half of your estate goes to your spouse and half to your children. Succession laws become more complicated when you have children from a prior marriage.
Contact Stange Law Firm
When you own multiple properties in different states, proper estate planning is essential. A qualified estate planning attorney can review your unique properties and estate to determine what tools may be beneficial to you and serve your real estate goals. Contact Stange Law Firm today.