Revocable Living Trusts for Second Homes
Many residents of Colorado own real estate in other states. If you own a condo, townhome or other piece of real estate in such popular destinations as Florida, Arizona or California, you may want to consider holding the property in a Revocable Living Trust located here in Colorado. While many people will not opt for a Living Trust as their preferred estate planning vehicle for various reasons, if you own property in a different state, you should consider forming a Living Trust for the sole purpose of holding the real estate. The reason is to avoid the necessity of opening a probate proceeding in the different state.
While the Colorado probate system is fairly inexpensive and simple to navigate, other state systems can be more complicated and expensive, not to mention simply the need to hire an attorney and navigate a different state’s system.
When you die, someone must have the authority to sell your real property. In Colorado, opening a probate proceeding is required to Personal Representative (“P.R.”) being appointed. The P.R. is issued “Letters Testamentary” which provides them the authority to sell property from your estate. If you own property in another state, your estate’s P.R. will need to go to Arizona (as an example) and open what is called an “Ancillary Probate” to receive the authority to sell any real property in Arizona. However, if your Arizona property was owned by a Living Trust you established here in Colorado, your successor Trustee has the authority, without the need of opening a probate, to sell any property in the Living Trust – even in Arizona. If you already have a Living Trust as your primary estate planning vehicle, just transfer the property into it. If you do not currently have a Living Trust, but own property in another state, you may want to consider this option to ease administration of your estate after your death.
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