Avoiding Probate for Your Vacation Home

From Our “Ask a Question” Mailbag: “My wife and I live in Philadelphia but own a New Jersey Shore home. I have been told that when we die because the vacation home is out of state, our children need to go through probate in both Philadelphia and New Jersey. Is there a way of avoiding probate for your vacation home?”

Estate Planning Attorney Daniella Horn

Is There a Way of Avoiding Probate for Your Vacation Home?

The short answer is yes. This article will explain several ways to avoid probate for your vacation home. If you want more information, don’t hesitate to contact our office for a free consultation.

First, What is Probate?

Probate has existed in one form or another since the beginning of humankind. Probate is the official process of dividing ownership of a person’s things after death. In the United States, each state has a unique probate system. Some are better than others, but all agree that if you own real estate in a state, that state controls the probate process for the land. So, if you die a resident of Pennsylvania, your probate is in Pennsylvania. But, if you also own land in New Jersey, you must start in Pennsylvania and ALSO use New Jersey’s probate process. Probate can become costly and time-consuming for people with land in several states.

First Method of Avoiding Probate: A Revocable Living Trust.

A Revocable Living Trust is a popular way to avoid probate in multiple states. It is a tool that allows you to maintain control and use of your vacation home during your lifetime but, at your death, allows your children to immediately take control without paying the county filing fees or petitioning the court, surrogate, or register of wills. 

An advantage of Revocable Living Trusts over the other options is that you can create an Irrevocable Trust to own the vacation home after your death. This protects the house from your children’s divorces. The options below pass the property directly into your children’s names, which may be easier, but it provides them no protection.

For more information, please follow this link to my article, Revocable Living Trusts, All You Need To Know.

Second Method of Avoiding Probate: A Lady Bird Deed.

Some states, such as Florida and Texas (but not New Jersey or Pennsylvania), have Lady Bird Deeds. These deeds name the successor owner. This way, the deed can be transferred using only your death certificate upon death, avoiding probate.

Third Method of Avoiding Probate: A Life Estate Deed.

You can have us create a Life Estate Deed, allowing you to remain in the vacation home during your lifetime but passing ownership to your children at your death. These deeds exist in all states, including Pennsylvania and New Jersey.

Fourth Method of Avoiding Probate: Gifting During Your Lifetime.

If you feel comfortable giving up all ownership and control over the vacation property, we could create a deed transferring ownership to your children during your lifetime. This opens the property to being involved in your children’s divorces during your lifetime. Further, it means no ‘step up in basis’ at your death. While this may seem an easy answer, you should consult us about the negatives first.

Fifth Method of Avoiding Probate: Joint Ownership With Your Children.

Owning your vacation home as Joint Tenants during your lifetime means that each person owns an equal share of the property and, at one owner’s death, their ownership is divided equally between the others.

For example, let’s say you own your Long Beach Island, New Jersey vacation home Jointly With a Right of Survivorship with your two children. At your death, the children can use your death certificate to remove your name, leaving them equal owners. 

Because you are giving your children ownership during your lifetime, your enjoyment of the property could be affected if they divorce. Further, if you wanted to take out a loan or a line of credit on the property, your children would have to qualify. As in all these methods of avoiding probate, consult about both the negatives and the positives before jumping in.

In conclusion, there are ways to avoid probate in your vacation home.

Would you like more details about probate? Follow this link to my article, Probate: Everything You Need to Know. 

I hope you found this short article about Avoiding Probate for Your Vacation Home helpful. I have also included some links for more detailed information. Contact us if you want to know more or have an estate that needs our help. Let our Probate and Estate Planning lawyers help walk you through what can be a confusing process. Feel free to contact our office for a free consultation. It’s All We Do: 

Wills, Trusts, Probate, and Estate Litigation!

It’s What We Do!

Peter Klenk, Esq. Pennsylvania Probate Lawyer, New Jersey Probate Attorney