Why Your Vacation Property Needs a Trust

by Jenny Ling, Esq.

If you own out of state property, like a vacation home in Palm Springs, or your parents house in Arizona, it is essential that your estate plan is crafted to deal with those assets when the time comes.  The reality is that making no plan, or just having a Will, guarantees that your family will need to spend extra time and money to deal with those assets when you are gone.

Probate is the legal process of settling the estate of someone who has passed away.  If all you have is a Will, or if you did no planning at all, your estate will need to go through probate. However, you can make probate a much smaller and less costly process for your family by making some key decisions when creating your estate plan.  If you live in Washington state and own property in another state, your family will need to open probate in Washington as well as in that other state, thus doubling the time and expenses for your family.  This is known as Ancillary Probate.

When you consider the cost of hiring multiple attorneys for multiple probates, as well as the headaches to your loved ones in dealing with each state’s differing laws, a revocable living trust is likely to be much more cost-effective and easier for your family in the long run.

But what about titling the vacation property jointly with a right of survivorship?  This may seem like an easy way to avoid the process of Ancillary Probate and still ensure that the vacation home passes to the family member you choose.  However, that can have unanticipated risks.  No one can predict divorces or lawsuits, and it is best not to have your assets at risk in those cases.  For example, if you make your son co-owner of the vacation property, his share would be at risk if he were to get divorced.  Or your daughter’s share could be taken by creditors if she ends up being sued or garnished due to a failed business venture.

Contact Us today if you have a vacation property so we can help you draft a plan that offers the most protection for your family.

Jenny Ling is a partner at the Law Offices of Jenny Ling, PLLC.  She focuses her practices on estate planning, business succession planning, business and bankruptcy.