03 Nov How to Handle Estate Planning When You Own Property in Multiple States

Owning multiple properties can be a dream come true. Maybe you bought a vacation home in California and a ski cabin in Colorado, or you own rental properties in Florida. Property ownership can be an exciting venture, especially while you’re enjoying the benefits of your investments. But when it comes to transferring those properties to your heirs, matters can quickly get complicated.

Unless you plan ahead, your loved ones could end up facing extra court procedures, fees, and delays. Here’s what you need to know now to save them a headache later.

How Out-of-State Properties Can Get Complicated

Every state handles property ownership differently. Arizona is one of nine community property states, while all the others follow common-law rules. This means that the way your property is titled can affect ownership from state-to-state.

Each state also has its own rules for probate. So if you live in Arizona but own a vacation home in Colorado, your estate might have to go through two probate processes: one for each state. This is called “ancillary probate,” and it can take several months or even over a year to sort things out. Multiple probate processes not only cause delays and confusion, they also mean lots of extra court fees.

The Easiest Way to Avoid Probate Is to Set Up a Trust

The simplest way to avoid the mess of facing probate in more than one state is to put your real estate properties in a revocable living trust.

When a property is titled in the trust’s name instead of yours, it can skip probate no matter where it’s located. Your successor trustee can step in right away to manage, rent, or sell the property. 

If you already have a trust but haven’t added your properties, that’s easy to fix. Updating the title officially transfers ownership to the trust and saves your family from having to pay court fees. As an extra safety measure, you can also draft a pour-over will. This failsafe automatically gives the trust ownership of any assets that got left out.

If your out-of-state holdings are business investments or rental properties, an LLC might also be worth considering. An LLC separates your personal assets from the business side of your ventures. You can even take it one step further and place that LLC in an irrevocable trust, to keep your personal assets safe from lawsuits.

Keep Your Estate Plan Updated

If you’ve recently bought or sold any property or moved to another state, it’s time to review your estate plan. Make sure every property is properly titled and accounted for in your trust or LLC.

When you’re dealing with property in multiple states, small details matter more than most people realize. A quick check-in with your attorney can make adjustments to fit new local laws and prevent big issues later.

Here are a few things to double-check:

• Make sure your name and your trust’s name are written the same way on every deed.
• Verify that each property has the right beneficiaries and insurance coverage.
• Keep copies of every title and trust document in one easy-to-find place.

Customized Estate Plans for Property Owners

Owning property in multiple states doesn’t have to make your estate over-complicated. You can keep things organized, skip extra court filings, and protect your family from added stress with a little careful planning and some professional guidance.

At Phelps LaClair, we’ll help you create a sound estate plan that keeps things simple and secure, no matter how many properties you own. Get the personalized advice you need! Contact us today to schedule a consultation in Mesa, Chandler, Scottsdale, or one of our other Phoenix Valley locations. 

Images used under creative commons license – commercial use (10/30/2025). Photo by Pin Adventure Map on Unsplash