According to the Pew Research Center, every day approximately 10,000 baby boomers reach 65 years of age. As the approximately 65 million surviving members of the baby boomer generation retire, it is not unusual for them to own homes in multiple states. In fact, it is very common for a retiree in New York to own a second home in any other state where they might spend their winters, while continuing to own a home in New York.
Although the second home may be jointly titled with one’s spouse with rights of survivorship, upon the demise of the joint titleholder the home will automatically transfer to the surviving spouse. If this is the case or if the second home is titled only in one’s sole name, the result will be additional complexities and costs at the time of death of the sole owner. For example, it would be necessary that a probate or administrative proceeding (if there was no will) be filed in the county where one died in New York, but also necessitates an ancillary probate or ancillary administration proceeding be started in the state where the second home is located. This will require that an executor or administrator be first appointed by the court in New York and receive letters of testamentary or letters of administration from the surrogate’s court here and then retain an attorney in the state where the second home is located to allow its sale.
The need for an ancillary probate or ancillary administration proceeding will result in additional legal fees, court filing fees, maintenance and upkeep for the second home as a result of delays in being able to sell the home after the owner’s demise. These delays and expenses can all be avoided if one’s primary residence and second home are owned by either a revocable living trust and/or an irrevocable trust, which is used for long-term care and Medicaid assets protection planning purposes.
If one’s primary residence and second home have been transferred to either trust during one’s life, then upon one’s demise there is no need to commence a probate proceeding for the primary residence or an ancillary probate proceeding for the second home in the state where the second home is located.
The trustee(s) named in either trust will be given the immediate ability to list and market for sale either the primary residence and/or second home, and if they believe it is appropriate to do so (after all bills and taxes have been paid) convey the homes to the named beneficiaries. There are no court filling fees required for either home and no court delays.
Having the ability to avoid the expensive and time-consuming proceedings by utilizing a trust to hold title to one’s home and other assets is invaluable. In spite of best efforts by attorneys and the courts to minimize the delays and complexities of a probate and/or administration proceeding, they are often inevitable.
For example, if one were to pass and is survived by a spouse, child and/or grandchild that is a beneficiary under a will or an heir at law in an administration proceeding that is a “person under a disability,” it would be necessary for said person to be listed as such in the court papers, thus, necessitating appointment of a guardian ad litem in the proceeding to represent and protect the disabled person’s interests in the proceeding. This results in additional court delays as the guardian ad litem needs to file his or her report with the court and will also be entitled to a fee for his or her services. Again, a cost and complexity that could have been easily avoided with the use of a revocable or irrevocable trust.
Anthony J. Enea is a member of the firm of Enea, Scanlan & Sirignano LLP of White Plains. He is the president of the Westchester Bar Foundation and a past president of the Westchester County Bar Association. He can be reached at 914-948-1500.