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What about probate? (Part Three)

Ask the LDA

Series: What is estate planning | Story 3

What if a person holds property in another state? If you own real estate in another state, that property might have to go through probate in that state, in addition to a probate in your primary state of residency. This is known as an "ancillary" probate. With a living trust you can avoid these multiple probate proceedings and have that property pass to your beneficiaries according to the terms of your trust directly without the additional costs and delays of an ancillary probate.

In addition, some other types of assets might require appraisal; for example, collectibles, publishing royalties or other intangible property such as leasehold interests or mineral rights. So, not only will there be the added expense of paying for appraisals, there are the arrangements, scheduling and logistics to be handled, all of which add to the delay in final distribution.

A word about taxes on estates

Note that the cost of probate is sometimes erroneously referred to as a "tax." As we have seen above, while there can be substantial costs associated with taking an estate through the probate process, those costs arise from court costs, attorney fees, appraisals, etc. In recent years, the imposition of true taxes on estates has become much less important to the vast majority of individuals and families. In the case of federal estate taxes, the federal estate (and gift) tax exemption, which is indexed annually for inflation, is currently $11,400,000 per individual. (The preceding exemption amounts are effective through the year 2025.) Also note that there is an unlimited amount that can be transferred from one spouse to another using a provision known as the marital deduction. Finally, also note that there is no inheritance tax imposed by the state of California.

Diana Wade is a Legal Document Assistant. She can be reached at (661) 821-0494 or [email protected]. Diana is not an attorney, she can only provide self-help services at your specific direction. Kern County LDA #185, ex 4/11/23.