Can a will distribute outofstate property

I recently spoke with a client, David, who was distraught. He’d meticulously updated his will, believing he’d accounted for everything. But his daughter, living in Florida, discovered a signed codicil—a change to his will—was missing. Despite having a clear intention to leave her his condo in Sarasota, Florida, the absence of that codicil meant the property would default to his ex-wife under the older will terms. The legal fees and emotional toll of having to ancillary probate in Florida, just to correct this oversight, were substantial.

What Happens to Out-of-State Property After Your Death?

Yes, a will executed in California—or any state—can absolutely distribute property located in another state. However, it’s rarely a simple, straightforward process. While your California will directs how that property should be distributed, actually transferring ownership requires an additional legal proceeding in the state where the property is located. This is known as ancillary probate.

What is Ancillary Probate?

Ancillary probate is essentially a secondary probate proceeding, conducted in the state where the out-of-state property is situated. It’s a mini-probate, focused solely on transferring that specific asset. The goal is to have a local court—the one in the state where the property is located—validate the California will (or trust) as legally binding and authorize the transfer of ownership to the beneficiaries named within it. It’s similar to regular probate in that it involves court oversight, filing fees, and potentially, creditor claims. However, it’s typically less complex and less expensive than a full probate of your entire estate.

How Does it Differ From Regular Probate?

Regular probate, conducted in California where you reside, covers all probate assets in your estate—regardless of location. Ancillary probate, as we discussed, concentrates solely on the out-of-state property. For example, if you own a vacation home in Arizona, your California probate will address assets like your bank accounts, stocks, and California real estate. But to transfer the Arizona property, an ancillary probate case must be opened in Arizona.

I’ve practiced estate planning and served as a CPA for over 35 years, and I’ve seen firsthand how these distinctions trip up even well-intentioned clients. As a CPA, I also understand the importance of proper valuation and the potential impact on capital gains taxes—particularly when dealing with out-of-state property.

What About Real Estate and AB 2016?

California’s probate process has evolved. For deaths occurring on or after April 1, 2025, Assembly Bill 2016 (AB 2016) provides a streamlined process for transferring primary residences valued up to $750,000. However, this Petition for Succession under AB 2016, which requires a Judge’s Order, is specifically for California real property. It does not eliminate the need for ancillary probate for out-of-state assets. It’s crucial to remember that AB 2016 is a Petition, not an Affidavit – a vital distinction.

Furthermore, to qualify for the AB 2016 process, the decedent’s other non-real estate assets must generally remain below the separate $208,850 Small Estate limit. A property valued at $750,000 coupled with significant other assets will still necessitate full probate or, for out-of-state property, ancillary probate.

What About the Small Estate Affidavit?

The Small Estate Affidavit procedure in California is limited to personal property and real property with a value under $69,625. This is typically used for things like timeshares or vacant land, not a primary residence, and certainly not a significant out-of-state property. Trying to shoehorn a larger asset into this process will likely lead to legal challenges and delays.

What If I Have a Trust?

A properly funded trust can often bypass both probate and ancillary probate. If the out-of-state property is titled in the name of your trust, the successor trustee can typically transfer ownership directly to the beneficiaries, without court intervention. However, the trust must be valid and the funding complete—meaning the property’s deed has been officially transferred into the trust’s ownership during your lifetime.

What About Digital Assets and RUFADAA?

Don’t forget about digital assets! Without specific RUFADAA language (Probate Code § 870) in your Trust or Will, service providers like Coinbase and Google can legally deny your executor access to your digital assets, potentially leaving valuable accounts and data inaccessible.

What About Property Taxes and Prop 19?

Be mindful of property tax implications. Under Prop 19, heirs can only keep a parent’s low property tax base if they move into the home as their primary residence within one year and the home’s value is within specific limits.

What If I Have a Business?

If your estate includes a Limited Liability Company (LLC) registered outside of California, be aware of the FinCEN 2025 Exemption. As of March 2025, domestic U.S. LLCs are exempt from mandatory BOI reporting under the Corporate Transparency Act; however, executors managing foreign-registered entities must still file updates within 30 days to avoid fines of $500/day.

Planning Ahead: Minimizing Complexity

To avoid the headaches of ancillary probate, consider these steps:

• Titling: Hold out-of-state property jointly with rights of survivorship, or transfer it to a revocable living trust.
• Trust Funding: Ensure all your assets, including out-of-state property, are properly titled in the name of your trust.
• Coordination: Work with an attorney who understands the laws of multiple states.
• Documentation: Keep thorough records of all property ownership and estate planning documents.

David’s situation serves as a stark reminder: Estate planning isn’t just about having a will or trust; it’s about ensuring those documents are comprehensive, up-to-date, and effectively implemented. Failing to address out-of-state property can create significant legal and financial burdens for your loved ones.

What makes a California will legally enforceable when it matters most?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

• Preparation: Review future needs regularly.
• Validation: Check statutory rules.
• People: Update personal information.

When a will is drafted with California probate review in mind, it becomes a stabilizing roadmap rather than a source of conflict. Clear intent, proper authority, and compliant execution protect both families and estates.

Resources for Asset Management & Transfer

• Property Tax Reassessment: California State Board of Equalization (Prop 19)
  This page details the “Base Year Value Transfer” rules. It explains that heirs can only avoid a property tax reassessment if the inherited home becomes their primary residence and the Homeowners’ Exemption is filed within one year of the date of death.
• Real Estate Probate (AB 2016): California Probate Code § 13151 (Petition for Succession)
  The specific statute for the AB 2016 process. It outlines the requirements for using a court-approved “Petition” (not an affidavit) to transfer a primary residence worth $750,000 or less (gross value) for deaths occurring after April 1, 2025.
• Small Estate Affidavit: California Probate Code § 13100 (Personal Property)
  Access the statutory language for the “Small Estate Affidavit.” This procedure is strictly for Personal Property (cash, stocks, vehicles) and is limited to estates with a total value of $208,850 or less (effective April 1, 2025).
• Federal Estate Tax Exemption: IRS Estate Tax Guidelines
  The authoritative federal resource for estate valuation. It reflects the 2026 exemption increase to $15 million per person, which is critical for high-net-worth asset planning and determining if an IRS Form 706 is required.
• Unclaimed Assets: California State Controller – Unclaimed Property
  The primary portal for executors and heirs to search for “lost” assets—such as forgotten bank accounts, uncashed dividends, and insurance benefits—that have been remitted to the State of California for safekeeping.
• Business/LLC Compliance: FinCEN – Beneficial Ownership Information (BOI)
  The official portal for corporate transparency reporting. Most domestic and foreign entities (LLCs, Corps) must file a report. Executors must verify compliance, as failure to update control information within 30 days of death can result in federal civil penalties.