Incorporating A Second Home Into Your Estate Plan

It is not uncommon for New Yorkers to spend a few months in Florida or some other state, especially during the winter season.  Whether you are heading to the Berskshires, the Carolinas, or some other destination, there are some relatively easy steps you should take in order to ensure that your estate plan takes your second home into consideration.

  The probate of one’s will, or the administration of one’s estate, will occur in the state where you reside.  If you are a New York resident, the probate process is usually straightforward and relatively simple.  If you own real property in another state, you will be required to probate your will there as well, resulting in a second, or “ancillary”, probate.  Probate in other parts of the country is usually not as simple a process as it is in New York.  In fact, the process can be a very long and expensive one.  Moreover, your heirs would need to first complete the probate in New York and then retain an attorney admitted to practice in the state where the second home is located to commence a new probate there.  As an example, probating a will in Florida is much more complicated and can take many months, if not more than a year. To avoid the cost, expense and delay of an ancillary probate, it is usually advisable to establish a revocable living trust for the second home.  Creating such a trust is relatively simple and the laws of most states which have difficult probate processes are quite conducive to such an estate planning device.

If you spend a fair amount of time in a state other than New York, it would also be wise to have a health care proxy, living will and durable power of attorney prepared in accordance with that state’s law.  While these documents, if prepared in accordance with the laws of the State of New York, should be given effect in other states, the reality is that you may encounter reluctance on the part of institutions to accept them.  If you decide to change your residency to another state, then preparing new documents is imperative.  While a last will and testament prepared in one state is usually valid in other states, it should be reviewed by an attorney licensed to practice law in that state.  Again, if the probate process in the new place of residence is difficult, then it may be necessary to create a trust for all of your assets.

In summary, if you own a second home, you should consider a revocable living trust as an important part of your estate plan.  If drafted properly, the trust will avoid the need to go through two or more probate processes and simplify matters for your heirs.

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