If you are a foreign national who owns property in the United States, you may have heard of the ancillary probate process.
Below, we will explain what ancillary probate is, why it is necessary, and how you can avoid it or at least minimize its impact.
What is Ancillary Probate?
Probate is the legal process of settling your estate after your death, which involves proving the validity of your will, paying your debts and taxes, and distributing your assets to your beneficiaries.
Ancillary probate is a secondary probate proceeding that takes place in addition to the primary probate proceeding in your home country.
If you own real estate or other tangible property in another country, such as the United States, the probate court in your home country has no authority or jurisdiction over that property. Therefore, you need to open a separate probate proceeding in the state where the property is located.
Why is Ancillary Probate Necessary?
Ancillary probate is necessary to transfer the title of your US property to your beneficiaries. Without ancillary probate, your US property may be subject to escheat, which means that it will revert to the state government if no heirs can be found.
Ancillary probate also ensures that any taxes, liens, or claims on your US property are paid or resolved before the transfer.
How Does Ancillary Probate Work?
The ancillary probate process varies depending on the state where your US property is located, but generally follows these steps:
- Your executor or personal representative (the person who administers your estate) must obtain certified copies of your will and other documents from the probate court in your home country.
- Your executor must file a petition and other pleadings with the probate court in the state where your US property is located, requesting to open an ancillary probate proceeding and to recognize your foreign will.
- The probate court will review the petition and documents and decide whether to accept or reject them. If accepted, the court will appoint your executor as the ancillary administrator of your US property.
- The ancillary administrator must notify any creditors, beneficiaries, or interested parties of the ancillary probate proceeding and give them an opportunity to file claims or objections.
- The ancillary administrator must pay any taxes, fees, debts, or expenses related to your US property.
- The ancillary administrator must distribute the remaining assets to your beneficiaries according to your will or the laws of intestacy, if there is no will.
What Are the Disadvantages Of Ancillary Probate?
Ancillary probate can be costly, time-consuming, and complicated for foreign nationals and their heirs.
Some of the disadvantages of ancillary probate are:
- You may have to pay double taxes on your US property.
- You may have to comply with different and conflicting laws and procedures in different countries and states regarding probate, inheritance, taxation, and property rights.
- You may have to hire lawyers and other professionals in both countries to handle the legal and administrative aspects of ancillary probate.
- You may have to deal with delays in both countries to obtain documents, approvals, and clearances for ancillary probate.
- You may have to face challenges or disputes from creditors, beneficiaries, or other parties who may have an interest in or a claim on your US property.
How Can You Avoid or Minimize Ancillary Probate?
Fortunately, there are ways to avoid ancillary probate or at least minimize its impact. Some of the common strategies are:
- Titling your US property jointly with another person who has a right of survivorship. This means that when one owner dies, the other owner automatically inherits the entire property without going through probate.
- Creating a trust and transferring your US property into it. A trust is a legal entity that holds assets for the benefit of certain persons or purposes. A trust can avoid probate because it is not subject to the jurisdiction of any court.
You can name yourself as the trustee (the person who manages the trust) and your beneficiaries as the trust beneficiaries (the persons who receive the benefits of the trust). You can also specify how and when your beneficiaries will receive their share of the trust assets.
- Obtaining a transfer-on-death (TOD) deed for your US property. A TOD deed allows you to name a beneficiary who will inherit your property without going through probate. However, not all states recognize TOD deeds.
We Can Help You Navigate the Ancillary Probate Process
If you are a foreign national who owns property in the United States, you need to plan ahead and prepare for the possibility of ancillary probate.
At Jurado & Associates, P.A., we have the experience and expertise to help you with all aspects of ancillary probate, and we can advise you on the best ways to avoid or minimize ancillary probate and save you time, money, and hassle.