How to Plan Your Estate When You Own Property in Multiple States
Disclaimer:
The information provided in this blog is for general informational purposes only and is not intended as legal advice. Every individual’s situation is unique, and laws can vary by state and circumstance. You should not rely on this information as a substitute for personalized legal guidance. For advice tailored to your specific needs, please contact Yu & Yu Law directly to speak with a qualified estate planning attorney.
Owning property in more than one state can be exciting — a vacation home on the coast, a rental property in another city, or even land investments. But when it comes to estate planning, multiple properties in multiple states can create complex legal challenges that many homeowners don’t anticipate.
If you don’t plan carefully, your heirs may face multiple probate proceedings, higher costs, and significant delays in receiving their inheritance. Fortunately, with careful planning, you can protect your family, simplify the transfer of property, and ensure your wishes are carried out.
In this guide, we’ll break down how to plan your estate when you own property in multiple states, what you need to know about taxes and probate, and practical strategies to make the process smoother.
Why Owning Property in Multiple States Complicates Estate Planning
When you own property in different states, each state may have its own rules about probate, property transfer, and taxes. In California, probate can be long and expensive, and if you own property elsewhere, your heirs might have to go through additional probate proceedings in each state.
Key issues include:
Multiple probate processes: Each property may require its own probate in the state where it’s located.
Varying estate tax rules: Some states have their own estate or inheritance taxes, in addition to federal taxes.
Legal differences in transferring property: Rules for trusts, joint ownership, and wills can differ from state to state.
Without proper planning, these complications can create delays, added legal fees, and stress for your loved ones.
Step 1: Take Inventory of All Your Properties
Start by listing all the real estate you own. Include:
Your primary residence
Vacation homes
Rental or investment properties
Land or undeveloped property
Note the state, county, and current ownership structure (sole ownership, joint tenancy, etc.). This helps your estate planning attorney identify potential issues and recommend solutions for each property.
Step 2: Consider a Revocable Living Trust
A revocable living trust is one of the most effective tools for managing multiple properties across different states. Here’s why:
Avoids multiple probates: Property held in a trust typically does not go through probate, even if it’s in another state.
Maintains privacy: Trusts are private, unlike wills, which become public record during probate.
Provides continuity: A successor trustee can manage all your properties seamlessly if you become incapacitated or pass away.
For each property, your attorney can help ensure the trust is properly titled and recorded in the correct state.
Step 3: Understand State-Specific Rules
Each state has its own laws regarding probate, property ownership, and trusts. For example:
California: Probate is required for real estate not held in a trust, and estate taxes are generally not an issue for most estates under federal limits.
Other states: Some may have their own inheritance taxes or unique rules about transferring property to heirs.
A skilled estate planning attorney can help coordinate your estate plan so that all properties, regardless of location, are accounted for and your heirs avoid unnecessary complications.
Step 4: Update Your Deeds and Titles
To fully implement your estate plan:
Ensure each property is properly titled in the name of your trust (if using a revocable living trust).
Verify that joint tenancy or tenancy-in-common arrangements align with your estate planning goals.
Make sure any mortgages, liens, or agreements allow for smooth transfer to your trust or heirs.
This step prevents disputes or delays when your heirs attempt to take ownership.
Step 5: Coordinate Beneficiary Designations
For some assets tied to your property — such as life insurance policies, retirement accounts, or property held through LLCs — review and update beneficiary designations. This ensures your estate plan is consistent across all asset types.
Step 6: Plan for Taxes
Even if your properties are properly titled in a trust, estate or inheritance taxes may still apply, depending on the state. Your attorney can:
Estimate potential tax liabilities
Recommend strategies to reduce taxes
Help your heirs avoid unexpected surprises
California does not currently have a state estate tax, but other states may, so planning ahead is crucial.
Step 7: Work With Professionals Across States
If your properties span multiple states, it’s wise to:
Consult a California estate planning attorney for your primary residence and trust documents
Coordinate with attorneys in other states where you own property
Work with financial advisors or accountants familiar with multi-state estate planning
This ensures your plan is legally sound and fully optimized for your family’s benefit.
Final Thoughts: Protect Your Multi-State Real Estate Legacy
Owning property in multiple states can complicate estate planning, but with careful preparation, the right tools, and professional guidance, you can make the process smooth for your heirs. A revocable living trust, updated deeds, and coordinated multi-state planning are key steps to avoid probate headaches, minimize taxes, and keep your family’s inheritance secure.
At Yu & Yu Law, we help California families navigate complex estate planning, including multi-state property, trusts, and probate avoidance. If you own property in more than one state, our team can create a customized plan that protects your assets and provides peace of mind for you and your loved ones.