Creating a comprehensive estate plan that functions as intended can be quite the undertaking; however, it is all the best gift you can give to yourself and your loved ones. If you own property outside the State of Indiana, it is imperative that you include that property in your estate plan. To explain why it is important and how it can be accomplished, the Indianapolis estate planning lawyers at Frank & Kraft discuss how to include out of state property in your estate plan.
Do You Own Property in Another State?
Whether you inherited your childhood home, purchased a vacation home in Florida, or rented out a previous residence in another state when you moved to Indiana, owning property is another state is something that should be considered when creating your estate plan. The same applies if you own property in another country; however, incorporating property you own in another country into your estate plan can be more complicated and may require you to execute an International Will or execute a separate Will in the country where the property is located.
Why Is It Important to Include Out of State Property in My Estate Plan?
Ideally, all assets you own will be identified and addressed within your estate plan. A primary reason for this is that most people create an estate plan specifically to ensure that all their assets are distributed according to their wishes when they are gone. For this reason alone, your out of state property should be included in your estate plan. Another, more practical, reason for making sure out of state property is incorporated into your estate plan is that failing to do so could result in the need to probate an intestate estate in the state where the property is located. For example, if you own a vacation home in Florida and it is not addressed in your Indiana estate plan, your heirs may need to spend time and money going through the probate process in Florida just to determine what happens to that home. Moreover, because the property was not included in a Will or trust, it will be part of an intestate estate. As such, the Florida (or state where the property is located) intestate succession laws will determine who inherits the property.
How to Include Out of State Property in Your Estate Plan
How you choose to include your out of state property into your estate plan is something you should discuss with your estate planning attorney because of the various factors that need to be considered. The most common ways to include property in an estate plan, however, are in a Last Will and Testament or in a trust agreement. If you plan to gift the property outright to a single heir, and you own the property free and clear, gifting it in your Will may be the simplest option. You should consider the gift and estate tax ramifications of gifting the property directly before deciding to do so. You may also want to consider other options if the intended beneficiary is young, has a spouse that you do not want to end up owning part of the property, or you have concerns about the beneficiary’s ability to manage money.
Instead of gifting out of state property in a Will, many people choose to use a trust. A trust can be funded using almost anything of value, including real property located out of state. Using a trust often works best when you want the property to be income producing after you are gone, if you want to gift the property to more than one beneficiary, you are concerned that the asset will be squandered, and/or tax avoidance is a goal. Because there are various types of specialized trusts that can help accomplish these goals, talk to your estate planning attorney about which trust is best.
Contact Indianapolis Estate Planning Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about estate planning, contact the experienced Indianapolis estate planning lawyers at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.