A second home is meant to be a source of joy and a gift to your family. Held the wrong way, it becomes a second probate proceeding in a second state — with a second set of lawyers and bills.
The scenario. The Coopers, who live in Massachusetts, owned a beloved vacation cottage in Maine, titled in their individual names. When Mr. Cooper died, his Massachusetts estate went through probate at home — and because the Maine property was real estate located in another state, the family had to open a second, separate probate proceeding (ancillary probate) in Maine to transfer that property. That meant hiring a second attorney, navigating another state’s court system, and incurring duplicate delays and costs.
The problems.
- Out-of-state real estate triggered a second (ancillary) probate.
- Duplicate attorneys, court costs, and delays in two states.
- Added complexity and expense for the family.
The planning solution.
The reason for the second proceeding is jurisdictional: real estate is governed by the law of the state where it sits. So even when your home-state estate is fully administered, real property in another state generally requires its own ancillary probate there to clear and transfer title. Own property in several states, and the problem multiplies — one probate per state.
The cleanest solution is a revocable living trust. When you retitle the out-of-state property into your trust, it is no longer owned by you individually at death, so no probate is required in any state where the trust holds real estate. One trustee administers everything under one set of terms — privately and without multiple court proceedings. This is one of the most compelling reasons for owners of multi-state real estate to use a trust.
An alternative is to hold the property in an LLC. This works through a different mechanism: you no longer own real estate in the other state — you own a membership interest in an LLC, which is personal property governed by your home state (your domicile). The real estate itself never has to pass through the other state’s probate court. An LLC can add liability protection and is especially common for rental or investment property; for a personal-use vacation home, a trust is often simpler.
Whichever route you choose, the essential action is titling: confirm that every parcel of out-of-state real estate is held in the trust or LLC, not left in individual names. The plan only works for the assets actually moved into it.
Key takeaways.
- Real estate is probated where it sits, so out-of-state property triggers ancillary probate.
- A revocable trust holding the property avoids probate in every state at once.
- An LLC converts the real estate into personal property governed by your home state.
Own property in more than one state? Ask about retitling it into a revocable trust (or LLC) to spare your family multiple probates.