If you own property outside North Carolina—like a vacation home, rental property, or land in another state your estate plan needs special attention. Handling out-of-state assets the right way can save your loved ones from unnecessary costs, stress, and lengthy legal processes down the road.
Why Out-of-State Property Complicates Estate Planning
When someone passes away, their estate must go through probate the legal process of transferring ownership of their assets. If you own real estate in another state, that property typically must go through a separate probate process in the state where it’s located.
This is called ancillary probate, and it can:
- Delay the administration of your estate
- Increase legal costs and paperwork
- Create complications if different states have conflicting inheritance laws
For example, a Charlotte resident who owns a beach condo in South Carolina could have their family dealing with probate courts in both North Carolina and South Carolina doubling the time and effort required to settle the estate.
Options for Simplifying Multi-State Property Ownership
Fortunately, there are ways to avoid or minimize ancillary probate. An experienced estate planning attorney can help you choose the right approach based on your assets and goals. Here are a few common strategies:
1. Create a Revocable Living Trust
Transferring your out-of-state property into a revocable living trust ensures it’s managed and distributed according to your instructions without going through probate in another state.
This is one of the most effective tools for simplifying estate administration.
2. Add Co-Ownership with Rights of Survivorship
In some cases, adding a co-owner—such as a spouse or adult child—with rights of survivorship can allow property to pass automatically to them upon your death.
However, this should be done carefully. Co-ownership can have tax and liability implications, so professional guidance is crucial.
3. Use a Transfer-on-Death (TOD) Deed
Some states allow Transfer-on-Death Deeds, which let you name a beneficiary who automatically inherits the property without probate. Unfortunately, North Carolina does not currently recognize TOD deeds but if your out-of-state property is in a state that does, this can be a convenient option.
4. Sell or Consolidate Properties
If maintaining out-of-state property isn’t essential, selling or consolidating assets may simplify your estate and make long-term planning easier.
Common Mistakes to Avoid
- Failing to coordinate your estate plan across states.
Each state’s laws differ, and documents valid in North Carolina might not apply elsewhere. - Not updating your estate plan after buying property in another state.
Every major acquisition should prompt a review with your attorney. - Overlooking tax implications.
Some states have inheritance or estate taxes that North Carolina does not plan accordingly.
Multi-state property ownership adds complexity to estate planning, but with the right legal strategy, you can ensure your loved ones won’t face unnecessary legal hurdles. A North Carolina estate planning attorney can work with professionals in other states to create a coordinated plan that reflects all your assets and your wishes.
Owning property in multiple states is a great investmentbut it comes with added estate planning responsibilities. Taking proactive steps today can save your family significant time, stress, and expense later.
At Sabrina Winters, Attorney at Law, PLLC, we help North Carolina families protect everything they’ve worked for—whether their property is across the street or across the country.
Contact our Charlotte office today to schedule a consultation and make sure your estate plan covers every home, deed, and detail.