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Probate can be a difficult process, and especially if you’re trying to grieve the death of a loved one. When your loved one had out-of-state assets, things can get even more complicated. Whether you are in the process of arranging your estate or you’re already mired in the probate process, talking with a probate lawyer in Houston can help you understand all your options and allow things to go as smoothly as possible.

From a Probate Lawyer in Houston: Transferring Out-of-State Assets at Probate

When an asset is located outside of Texas, it has to go through a process called “ancillary probate,” unless it is a type of asset that doesn’t require any special procedures. Only some assets go through ancillary probate, and most intangible personal property qualifies. Intangible property is distinguished from real property, like real estate, and includes things like investment accounts, bank and retirement accounts, or companies and businesses. 

Intangible property doesn’t have to go through ancillary probate because it is considered to belong to the decedent wherever they actually lived. In other words, even if the bank account was in a bank located in New York, the money in the account belonged to a person living in Texas, and therefore it can be processed by Texas probate without any special procedure. Some out-of-state assets can also bypass regular probate if they were set up to allow the asset to transfer automatically at death.

Ancillary probate is usually required when you have assets that are physically located outside Texas. Because these assets aren’t within the state of Texas, the state where they are actually located has jurisdiction. This means that the assets can only be transferred according to the laws of that state, not the laws of Texas. Assets that typically have to go through ancillary probate include personal property, real estate, oil and gas holdings, and mineral rights. When you’re thinking of real estate, it’s important to remember this includes not just homes but also businesses and their property, farms, empty land, vacation homes, etc.

The Ancillary Probate Process

The exact steps for ancillary probate in your situation will depend on which state the property is in. That’s because probate will now have to follow the laws of that state rather than the laws of Texas. Some states allow for simplified procedures in these cases, but others will require your executor to travel to the state to attend several court hearings to accomplish the property transfer. 

Any mistakes that are made along the way in this process can make a huge difference to the timeline of probate. This is just one reason why working with a probate lawyer is so important in these situations. A lawyer can make sure that you follow all the laws properly and that everything is done right the first time. This keeps things moving smoothly.

Other FAQ About Out-of-State Issues

How Can I Avoid Ancillary Probate?

The most important thing you can do so as to minimize all probate issues, including ancillary probate, is to work with an experienced attorney. Obviously you want an attorney with an office here in Houston, Texas, but it’s important that your attorney have lots of experience. An experienced lawyer will have dealt with these issues many times before for other clients and will know how to set your estate up even when you have assets in multiple states.

Just some of the strategies that you might be able to apply could include setting up revocable and irrevocable trusts that move assets out of the estate itself. Joint tenancy is also a way of minimizing the issues with ancillary probate as well as transfer-on-death deeds. A lawyer can tell you more about the best choice for your situation, and the right strategy for you will be different from the right strategy for someone else.

Is an Out-of-State Will Valid Here?

It’s actually not uncommon for someone to have a will from a different state, and, in most cases, such a will is valid in Texas so long as it is valid in the state where it was created. However, it’s never wise to depend on this. It’s always smart to update your will once you move to another state, and having an updated Texas will is the best way to be sure that probate will go easily and smoothly for your beneficiaries.

This is at least in part because Texas has some special probate laws that are meant to ensure everything is properly streamlined for your executor. One of these benefits is independent administration. If you specify in your will that you want this, then your executor typically only has to attend a single hearing. If all else is properly arranged and goes smoothly, then the executor should be able to take care of the estate and distribute your assets without having to attend any other court hearings. 

Texas also allows you to set up a self-proving affidavit. If this is properly filled out at the time you prepare your will, then your executor will not have to bring any witnesses to prove the validity of your will during the probate process. This just makes things go more smoothly and quickly.

How Much Does an Estate Have to Be Worth to Go Through Probate at All?

An estate has to be worth more than $75,000, excluding the homestead and any exempt property, to be required to go through the full probate process. If an estate is worth less than $75,000 and there is no will, then your loved ones can go through the “small estate” option. It’s never wise to assume that your estate will qualify for this option, however. $75,000 is a lower threshold than it may seem these days.

How Long Do I Have to Probate a Will?

In Texas, most wills need to be probated within four years of the death of the decedent. If you wait any longer, then the estate will likely be distributed according to intestacy laws. But laws in other states are different. If you have out-of-state assets, it’s important to get started as soon as possible.

What Are the Steps if Ancillary Probate Is Required?

The first step is to initiate the process here in Texas. The court will validate the will and appoint the executor. Once you have all your documents from the Texas court authorizing the executor, you will then need to file for probate in the state where the out-of-state property is located. The precise procedure for this will depend entirely on which state you’re talking about.

You’ll need to provide the other state’s court with certified copies of all your Texas probate documents. Just as with Texas probate, you will then have to notify any interested parties and creditors in the other state about the ancillary probate process and will need to inventory and appraise all property in that state. Any debts or taxes that are specifically relevant to that out-of-state property will then have to be settled. Once that is done, the property can be transferred to the beneficiaries of the estate directly, or it can be sold and the proceeds distributed.

For help with your estate, contact us now at Ford + Bergner LLP in Houston, Dallas, or Austin for experienced help.