Your Dream Vacation Home May Become Your Family's Probate Nightmare

One of the advantages of living the Snowbird life is having a vacation home in Florida as well as your other home "Up North."  However, without proper planning this arrangement could lead to increased costs and delays for your loved ones when the properties pass through your estate.

When a person dies, if probate is needed, it is opened in the state in which he was a resident.  The probate court in that state generally has jurisdiction over all real estate located in that state and all personal property located anywhere.  Any real estate owned in another state is subject to the laws of that other state, including probate laws.

So if you are a New Jersey resident owning a second home in Florida, your estate will have to be probated in both New Jersey and Florida.  The initial probate proceedings will be opened in your state of residence, New Jersey, and later moved to Florida to deal with the Florida home.  This Florida probate proceeding is called "ancillary administration."  In most cases, ancillary administration means double the costs, double the aggravation, and double the time necessary to get through probate.  It also means that the administration of the Florida estate is subject to Florida probate law.  Your Will now has to comply with Florida requirements.  The executor (or personal representative) that you named in your Will has to qualify under Florida law.  Florida creditors have to be dealt with, a Florida attorney must be retained and Florida filing fees and court costs have to be paid.

How can this be avoided?  You need to make sure that the Florida property can pass to your heirs without going through probate.  One way to do this is through joint ownership with right of survivorship. However, this arrangement can cause other unanticipated problems. Some of those problems are discussed here.  

Another possible solution is to use an Enhanced Life Estate Deed for the Florida property.  This has a similar effect as putting a beneficiary on your property.

Finally, you should consider setting up a revocable trust.  This is a powerful and flexible way to pass on your estate without probate.  Both your New Jersey and Florida property can be transferred to the revocable trust, thereby avoiding probate for both properties.