When a Massachusetts resident dies owning real estate in another state, that out-of-state property usually has to go through a second probate proceeding, called ancillary probate, in the state where the property is located. That means two court processes, two sets of fees, and two sets of delays for your family. The simplest way to avoid ancillary probate on out-of-state property is to hold it in a revocable living trust, which lets the property pass to your beneficiaries without probate in any state.
If you live in Massachusetts and own a condo in Florida, a cabin in New Hampshire, or a timeshare somewhere warm, this affects you.
What Is Ancillary Probate, and Why Does It Happen?
Ancillary probate is a secondary probate proceeding opened in a state other than where you lived, specifically to transfer real estate you owned there.
It happens because of a basic rule: real estate is governed by the law of the state where it sits, not the state where you live. So when you die as a Massachusetts resident, your main (or “domiciliary”) probate opens in Massachusetts. But your Massachusetts probate court has no authority over a house in another state. To transfer that out-of-state property, your family has to open a separate probate case where the property is located.
The costs add up quickly:
- A second attorney licensed in the other state.
- A second set of court and filing fees, sometimes calculated on the property’s full value.
- A second timeline, meaning your beneficiaries wait longer.
- Two public court records, eliminating privacy.
For families with property in more than one other state, this multiplies with each state.
Doesn’t My Will Cover Property in Every State?
People often assume a will covers everything, everywhere. It does not, and in fact a will guarantees probate rather than avoiding it.
A will has to be submitted to a court to be validated and carried out. If your will leaves out-of-state real estate to your family, that real estate still has to pass through the courts in each state where you owned property. Massachusetts will not accept another state’s probate order, and other states will not accept a Massachusetts one, so each parcel requires its own proceeding.
Massachusetts also does not allow transfer-on-death deeds for real estate, a tool some other states offer to pass property outside probate. That removes one of the simpler workarounds and makes trust-based planning the reliable option here.
How Does a Revocable Living Trust Avoid Ancillary Probate?
A revocable living trust is the cleanest fix. Instead of owning the out-of-state property in your own name, you transfer the title into your trust. You remain in full control during your lifetime as the trustee, and you can buy, sell, refinance, or change the trust however you like.
When you die, the property is already owned by the trust, so there is nothing for a probate court to transfer. Your successor trustee simply passes it to your beneficiaries according to the trust terms. One properly funded trust can hold real estate in Massachusetts, Florida, New Hampshire, and anywhere else, all avoiding probate:
- No Massachusetts probate for the trust assets.
- No ancillary probate in the other states.
- No court delay for your family to take title.
- Privacy, since the transfer never becomes a public record.
Two practical notes. First, the trust only works for property you actually retitle into it, so funding the trust is essential. Second, federal law under the Garn-St. Germain Act generally lets you transfer your primary residence into a revocable trust without triggering your mortgage’s due-on-sale clause.
We walk through the details in our related article on how to avoid probate when you own property in multiple states, and our trust planning practice handles the retitling correctly.
Does Massachusetts Tax My Out-of-State Property?
As of a 2023 change in the law, Massachusetts generally does not include real estate located in another state when calculating your Massachusetts estate tax.
Under the Massachusetts estate tax rules, a Massachusetts resident’s out-of-state real estate is excluded from the state’s taxable estate.
That can create a genuine planning opportunity. If part of your wealth is tied up in a vacation home in another state, that value may sit outside your Massachusetts taxable estate, which starts at $2 million. Coordinating where and how you hold property can meaningfully affect the state tax your family owes.
What If the Other State Has Its Own Estate Tax?
Excluding the property from Massachusetts tax does not mean it escapes tax everywhere. The state where the property sits may impose its own estate or inheritance tax.
A few examples make the point:
- Florida has no state estate tax, so a Florida condo triggers no state death tax there.
- Maine and Rhode Island have their own estate taxes with thresholds lower than the federal exemption, so property there can create a tax bill in that state.
- New Hampshire has no estate or inheritance tax, which is one reason it is a popular place for second homes.
The reverse is also true: if a resident of another state owns real estate in Massachusetts, Massachusetts can tax a proportionate share of that property at death if the total estate exceeds the state threshold. The upshot is that multi-state ownership calls for a plan that accounts for each state’s rules, not just Massachusetts law.
Are There Other Ways to Avoid Ancillary Probate?
A revocable trust is usually best, but there are alternatives, each with trade-offs:
- Joint ownership with right of survivorship. Property held jointly passes automatically to the surviving owner, avoiding probate. But adding a joint owner can create gift tax issues, expose the property to that person’s creditors, and cause you to lose a full step-up in basis.
- An LLC. Holding rental or investment property in an LLC can simplify transfer and add liability protection. Transferring a mortgaged property into an LLC, though, can trigger the lender’s due-on-sale clause and add ongoing filing costs.
For most families with a second home or two, a single revocable trust remains the simplest and most complete solution.
Frequently Asked Questions
What is ancillary probate?
It is a second probate proceeding opened in another state to transfer real estate you owned there. Because real estate follows the law of the state where it sits, your Massachusetts probate cannot handle out-of-state property on its own.
Will a revocable living trust avoid probate on my out-of-state home?
Yes. If the property is titled in your trust, it passes to your beneficiaries without probate in any state. One trust can hold property in multiple states, but you must retitle each property into the trust.
Does Massachusetts tax my out-of-state vacation home?
Generally no. Since 2023, Massachusetts excludes out-of-state real estate from its estate tax calculation for residents. The state where the property is located may impose its own estate or inheritance tax, however.
Can I use a transfer-on-death deed for my out-of-state property?
Massachusetts does not allow transfer-on-death deeds for real estate, though some other states do. A revocable living trust is the more reliable way to avoid probate across state lines.
Plan Before Your Family Faces Two Probate Courts
Out-of-state property is one of the most common reasons families end up in probate in more than one state, and it is one of the most avoidable. A revocable living trust, funded correctly, can spare your family the cost, delay, and lack of privacy that come with ancillary probate.
If you own a second home, rental, or timeshare outside Massachusetts, reach out through our contact page to schedule a consultation. We help families across the Merrimack Valley and North Shore, including Andover, North Andover, Reading, North Reading, Middleton, and Wilmington, plan for property in Massachusetts and beyond.