When a Williamsville resident creates their will, they decide how their property will be distributed according to New York law. But what happens if some of their property lies in a different state? The answer hinges on various factors, including property type, value, jurisdictional laws and the admission of the will to probate in New York.
Understanding probate
In New York, probate proceedings occur in the Surrogate’s Court of the county where the deceased lived and had their primary residence. Not all assets undergo probate in New York. Solely owned assets or those lacking a designated beneficiary fall into the probate category. Examples include bank accounts, stocks, bonds and vehicles.
Non-probate assets
Non-probate assets, which are exempt from probate, include those with designated beneficiaries or joint owners with survivorship rights. Life insurance policies, retirement accounts, joint bank accounts and properties under joint tenancy or tenancy by the entirety fall into this category, passing automatically to beneficiaries or joint owners, irrespective of the will’s directives.
Out-of-state assets
When probate assets beyond state borders, the probate process involves navigating distinct laws and procedures contingent on asset types: personal property and real property.
Personal property
The probate of personal property, which includes movable items like money, jewelry, vehicles, etc., follows the law of the deceased person’s domicile at the time of their death. Exceptions may arise based on property type, value, and jurisdictional laws. Complexities may arise if foreign entities or financial institutions dispute the authority of a New York executor, necessitating local court orders or ancillary proceedings.
Real property
Probate of real property follows the law of the the state where the property is located. To sell or transfer out-of-state real property, a New York executor must obtain an ancillary appointment from the foreign court. This involves filing an ancillary petition, fulfilling requirements and paying associated fees.
How to avoid the out-of-state messiness
Avoiding unnecessary ancillary proceedings can be achieved, though. Establishing a revocable living trust and transferring out-of-state real property into it is one way. Another way is adding a joint owner with survivorship rights or utilizing a transfer-on-death deed for direct asset transfer. Yet another way is selling or gifting out-of-state real property before death to streamline estate complexity.
Residents of New York holding assets beyond state borders should ensure the validity and effectiveness of wills and estate planning documents across jurisdictions. Regularly reviewing asset ownership and beneficiary designations minimizes the need for probate and ancillary proceedings, guaranteeing assets align with your wishes.
