Owning property in multiple states complicates estate planning, especially when it comes to the legal requirements for managing and transferring assets. As an Arizona resident with out-of-state property, incorporating those assets into your Arizona estate plan is essential for a seamless transition and to avoid legal hurdles after your passing.

Key Considerations for Out-of-State Property

Probate and Non-Probate Assets

Real estate located outside Arizona is generally governed by the laws of the state where it is situated. This means that, even if your estate is based in Arizona, property in other states may need to go through ancillary probate in those states. This process can be time-consuming and costly. One of the best ways to avoid probate in multiple states is to transfer your out-of-state property into a living trust.

By placing the property into a trust, you ensure that it bypasses probate, which simplifies the transfer to your heirs. Another option is to utilize joint ownership with rights of survivorship or beneficiary deeds, depending on the property laws of the state where the property is located. These designations allow the property to pass directly to the intended beneficiary without the need for probate​.

Trusts for Multi-State Real Estate

If you own significant real estate outside Arizona, creating a revocable living trust is one of the most effective ways to manage and protect those assets. A trust allows you to retain control over your property while simplifying the transfer of ownership after your death. Additionally, a trust provides privacy, as assets held within it do not go through the public probate process.

Tax Considerations

Arizona does not impose an estate or inheritance tax, but if your out-of-state property is located in a state with its own estate tax, your estate could be subject to additional taxation. It’s important to work with an estate planning attorney who understands the tax laws of both Arizona and the state where your property is located. By carefully structuring your estate plan, you can minimize potential tax burdens on your heirs.

Regularly Updating Your Plan

As real estate values fluctuate and laws change, it’s important to periodically review and update your estate plan, especially if you acquire or sell property in other states. Regular updates ensure that your plan remains current and reflects any changes in your personal circumstances or the law​.

Working with an Estate Planning Attorney

Given the complexities of managing out-of-state property, it’s essential to consult with an experienced estate planning attorney. The team at Dana Law Group can help you create a comprehensive estate plan that includes provisions for multi-state real estate, minimizing legal complications for your heirs.

If you own out-of-state property and need guidance on incorporating it into your Arizona estate plan, contact Dana Law Group to schedule a consultation.

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