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Ancillary Probate and Administration

Ancillary Probate and Administration by Tom SciaccaThings to Consider When a Deceased Owns Property in Another State

{Read in 3:30 minutes}  An Executor’s job never seems to be done. From arranging for the funeral of the deceased, to offering the Will for probate in the Surrogate’s Court, dealing with creditors of the deceased, to accounting to the beneficiaries, an Executor really has a full plate. Every now and then, an Executor will deal with assets that are more complicated than others, requiring more of that Executor’s time. One of these assets is real property that is located outside of the State of New York.

When the New York Surrogate’s Court issues Letters, that allows the Executor to collect the decedent’s cash accounts worldwide, but only real property located within the State of New York. Inherited real property presents some particular issues for an Executor, whether they plan to give it to the beneficiaries directly or arrange for its sale. However, before an Executor can even approach those issues, he first needs permission from the Court in which the other real property is located in order to to transfer or sell it.

This is known as an ancillary proceeding or an ancillary probate. When someone dies without a Will, it’s an ancillary administration. What’s involved in this? The local Surrogate’s Court in New York that probated the Will provides the Executor with an exemplified copy of all of the sets of papers that the New York court processed. The Executor will then start the ancillary proceeding in the other state(s), pay a small fee, and usually very quickly receive Ancillary Letters from the other jurisdiction(s).

The key here is planning, both for the Executor and for the deceased when they are writing their Will. For the deceased, it’s important to address these out-of-state real properties in their Will. For example, if the out-of-state property is investment property it will have various carrying costs associated with it, so it may be wise to have a non-probate asset payable to a party who can front those costs during the pendency of the probate and ancillary probate process. Or if the client knows that they want the property to go outright to a beneficiary, adding that beneficiary as a joint owner can obviate the need for ancillary probate at all. This is only necessary if the real property is owned solely in the names of the clients.

On the Executor’s front, it’s important to do some good investigation and flag this as an issue as early in the administration of the estate as possible. While our Surrogate’s Courts in New York are often very quick and efficient, this is not always the case for other states. An Executor who envisioned a quick sale of estate property may be severely disappointed, hence, a plan to handle these out-of-state real property issues is often best when devised in advance.

If you or someone you know would like more information on this topic, please contact me.