Do You Have a Deeded Time Share or Mineral Rights? There Might Be an Out of State Probate.

Meet Jack. Jack attended a time share seminar, so that he could go on a free vacation. He started his day with a free breakfast and jet skiing in Maui, followed by a half-day seminar on the wonders of owning a timeshare. Jack came home the proud owner of a new deeded time share. Six months later, Jack's grand-aunt passed away and she left Jack a 1/25th share of a mineral deed in Montana. Jack's story may not exactly be yours, but regardless of how you ended up with a time share or an interest in a mineral deed, you may have a hidden problem... A problem that would come into light after your death. In many cases, the value of these assets are not significant; but, without proper planning, time shares and mineral deeds can create big headaches and costs that exceed its value when you pass away.

In most states, any time you own deeded real property, such as a house or vacant land, a probate would be required to transfer that property to your beneficiaries when you pass away. This would also include deeded time shares and deeded mineral rights. What this means is that there may be a probate in every single state in which you own deeded property. Probate costs vary from state to state, but generally speaking, probates can cost your estate thousands of dollars.  Thus, owning property in multiple states will not only cause increased paperwork and headaches for your Personal Representative but also much higher expenses to administer your estate. So, if you, like Jack, have deeded property in multiple states, then your heirs will have to deal with a probate in each and every one of those states. Now, what seemed like a simple estate has suddenly turned into a complicated mess after you are gone.

Thankfully, proper planning can resolve this problem. One of the simplest ways to avoid this situation is to create a Revocable Living Trust here in Washington. Once you have created your Living Trust, you can transfer your time shares, mineral deeds, and any other real property in every state into your Living Trust and avoid probate in each state. Please refer to a previous newsletter article "I Have a Living Trust, What Documentation is Needed to Properly Fund My Trust?" for more information about funding your Living Trust. Another option that is available in some states (including Washington) is using a "Transfer on Death deed." A Transfer on Death deed allows you to designate who receives property when you pass away (a beneficiary) and it will avoid a probate for that property. However, a Transfer on Death deed will not give you as much control over the disposition of the property once the property has transferred to the beneficiary. Therefore, if you want to be able to control what happens to the property after you are gone, then a Living Trust would be a better option.

If you have deeded time shares, mineral deeds, or real property in other states, please call Rehberg Law Group at 206.246.8772 to schedule a meeting with one of our attorneys to find out if there is a potential problem for your Personal Representative in the future and to learn how you can solve that problem. With some simple planning now, you can get peace of mind that you have minimized the future potential mess when you are gone.