Susan Friedman Discusses Multi-State Estate Plans with Cleveland Jewish News

March 31, 2022
Susan Friedman

Use attorney when considering multi-state estate plan

By Meghan Walsh | Cleveland Jewish News

When it comes to owning property in two different states, you may wonder how to manage these in your estate plans. Consulting with an estate planner can be very helpful in making sure that all of your properties are covered, making for a smoother transition for your inheritors.

Susie Friedman, a partner at KJK, and Gary Zwick, a partner at Walter | Haverfield, both in Cleveland, discussed best practices for ensuring multi-state estate plans are done correctly.

“If someone has real estate or other tangible property, maybe a boat, in another state, the best option would be to create a trust that can hold all their real estate,” Friedman advised. “They don’t necessarily need one for each state. They can assign or deed their property to the trust regardless of what state the property is in.”

Some assets inherited require taxes be paid by the inheritors and the taxes will be determined by the laws of the state in which the asset is located, Friedman confirmed.

Friedman conveyed one mistake people commonly make is not creating a trust. When a person fails to do so, assets will go to probate. Other mistakes may be improperly titling the property in their trust or not funding the trust.

“When those things happen, there ends up needing to be what’s called an ancillary probate and that means a probate estate needs to be opened in that other state,” Friedman explained. “So there may be two probate estates going on in two different states. There (are) no advantages to (that).”

She explained having two estates going through probate simultaneously in two different states can be costly in attorney fees, court costs and time. It may also lead to a lengthy period before beneficiaries can obtain the assets left to them.

“It can really hold up the time it takes to close the probate estate,” Friedman noted.

There are other ways, besides using a trust, to avoid filing an ancillary estate, she conveyed. Most, but not all, states allow an estate holder to file a “transfer on death affidavit,” also known as a “transfer on death deed,” which allows property to go directly to a beneficiary without needing to go through probate. An real estate owner may also avoid probate by appointing a co-owner with survivorship rights on the deed. Ohio is among the states that allow this.

“If you have real estate, like a second home, in another state (and) you die owning that individually, you’re going to have to probate that in the state where it’s located,” Zwick said. “Ordinarily, we would try to avoid probate in multiple jurisdictions. Ordinarily, we would try to avoid probate entirely.”

Like Friedman, Zwick pointed out that a co-owner with survivorship is an option for avoiding probate.

“If there is no surviving spouse, or after the first one dies, (they) might transfer (the estate) to their revocable trust,” Zwick stated.

Zwick relayed that each state has different requirements.

“If you’re going to move to another state or have property in another state, it’s often a good idea to have someone on the ground there who knows local law,” Zwick recommended.

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