Property in More Than One State – Ancillary Probate in New York

What if the decedent had property in more then one state? Property in a different state, especially real property, will not be accepted for probate or administration by New York courts. It has to go through the process in the state where it is located. Conversely, if the decedent died in a different state and had property in New York, a separate estate needs to be opened up here for the decedent’s property, even if the decedent has never stepped foot in New York.

This is called “ancillary probate.” Ancillary probate could have been avoided altogether through proper estate planning, by forming a trust in New York, but if it was not, there will need to be a separate estate proceeding in New York and every other state. Here is a little more information about estate proceedings that involve more than one state. If your estate involves property in both New York and Florida, I can help you with both estates since I am licensed and have offices in both New York and Florida.

Why Real Property Has to Be Probated Where It Sits

The rule that real estate must be probated in the state where it is located is one of the oldest principles in American probate law. It stems from the broader concept that real property is governed by the law of the state where the land lies – the lex situs rule. New York courts cannot transfer title to a parcel in New Jersey, and New Jersey courts cannot transfer title to a parcel in New York. Each state's recording offices recognize only court orders from that state's own courts.

For personal property – cash, securities, vehicles, household goods, intellectual property – the rule is different. Personal property is generally administered in the state where the decedent was domiciled at death. So a New York resident who happened to own a car in Florida at the time of death will have the car administered through New York probate, not Florida. But a Florida resident with real estate in New York will need both a Florida probate (the "domiciliary" proceeding) and a New York ancillary probate for the land.

How Ancillary Probate Works in New York

When a non-domiciliary dies leaving real property or other interests requiring administration in New York, the executor or administrator appointed in the home state files an ancillary petition in the Surrogate's Court of the New York county where the property is located. The ancillary petition asks the New York court to recognize the home-state appointment and issue ancillary letters – either ancillary letters testamentary if there is a will, or ancillary letters of administration if there is no will.

The ancillary petition is supported by certified copies of the foreign court's probate documents – the will, the letters issued by the home state, and any related orders. Once the New York court accepts the petition, it issues its own letters that allow the fiduciary to act in New York: sign deeds, settle local debts, deal with tenants, and ultimately transfer the property to the beneficiaries.

The ancillary fiduciary in New York may be the same person serving in the home state, or it may be a different person nominated for the New York proceeding. New York will sometimes require a bond from a non-resident fiduciary even if the home state did not require one.

What Has to Be Done in Each State

Each state's process is independent. The home-state proceeding handles personal property worldwide and any debts owed to or by the decedent. The ancillary proceeding handles the real estate (and certain other tangible items) located in the foreign state. Notices to heirs, beneficiaries, and creditors may need to go out in both states. Estate tax returns may need to be filed in both states if both have estate or inheritance taxes. Filing fees, attorney fees, and court costs apply in both states.

The two proceedings can run at different speeds. The home-state proceeding may be ready to close while the ancillary proceeding is still pending because of local complications. Coordinating the two is part of the work of the probate attorney.

When Multiple Ancillary Proceedings Are Required

If the decedent owned real estate in three states, three separate proceedings will likely be required – one domiciliary proceeding in the home state and two ancillary proceedings in the other two states. Each comes with its own legal fees, court costs, and timeline. This is why ancillary probate is generally seen as something to avoid through advance planning.

Avoiding Ancillary Probate Through Planning

The most effective tool for avoiding ancillary probate is a revocable living trust. Real property transferred into a revocable trust during the owner's lifetime is owned by the trust, not by the individual. When the owner dies, the trust continues to own the property, and the successor trustee can transfer it to the beneficiaries without any court involvement in either state. This eliminates the cost, time, and complexity of multiple probates.

Other ways to avoid ancillary probate include:

• Joint ownership with right of survivorship. Property held jointly with a spouse or another person passes automatically to the surviving owner at death.
• Tenancy by the entirety. A specific form of joint ownership between spouses that provides additional creditor protection and passes by survivorship.
• Transfer-on-death deeds. Available in many states (not New York for real estate as of this writing), a TOD deed names a beneficiary who takes title at death without probate.
• Limited liability companies. Real estate held by an LLC is treated as personal property of the LLC member. The membership interest passes through the owner's home-state probate, avoiding a separate proceeding in the state where the real estate sits.
• Life estate deeds. A deed that conveys the remainder interest to a beneficiary while reserving a life estate for the owner can pass title at death without probate, though there are tax and Medicaid considerations.

Each of these tools has tradeoffs in terms of tax treatment, asset protection, Medicaid planning, and control during life. The right choice depends on the property, the family, and the broader estate plan.

Common Problems We See

Several recurring issues come up in multistate probate cases. The first is delay – a sale of New York real estate cannot close until ancillary letters issue, and ancillary letters cannot issue until the domiciliary letters have been issued and certified copies made available. The second is fees – families are often surprised by the cumulative cost of running probates in two or three states. The third is conflicting beneficiary rules – different states have different intestacy rules, different spousal protections, and different rules about advancements and class gifts. A will that is clear in the home state may produce different results in an ancillary state.

The fourth recurring issue is title problems. Older deeds may have errors – misspellings, incorrect legal descriptions, missing signatures, undischarged mortgages – that only surface when the property is being sold from the estate. Cleaning these up adds time and cost to the ancillary proceeding.

The New York and Florida Connection

Many of our clients have ties to both New York and Florida. Snowbirds who maintain homes in both states, retirees who moved to Florida but kept New York real estate, and family members who inherit in both states all create cases that need attention in both jurisdictions. We are licensed in both New York and Florida and can handle the domiciliary and ancillary proceedings in either direction without involving outside counsel. This streamlines the process, reduces fees, and avoids the coordination problems that come with two separate firms working the same case.

What to Do If You Are Facing a Multistate Estate

If a family member has died and owned property in more than one state, gather copies of the death certificate, any will, the deeds for each property, and a list of all assets in each state. Bring those to your first meeting with an attorney. We can identify what proceedings need to be opened, in what order, what timing to expect, and what the total cost is likely to be. We can also evaluate whether any simpler procedures are available – for example, if the New York real estate is held in a way that does not require probate at all.

Talk to a Multistate Probate Attorney

What if the decedent had property in more than one state? Ancillary probate is rarely as complicated as it first appears, but it does require attention to the rules in each state. Call the Law Offices of Albert Goodwin at (212) 233-1233 and make an appointment to discuss your estate administration or probate proceeding.