When More Than One Probate Becomes Necessary

Probate has a bad name. And most people don’t want one, much less two (or
more). But there are instances in which more than one probate proceeding can be necessary. If you die owning real property in a
state other than the state in which you are domiciled, a second ancillary probate
proceeding will be required in that state.

An ancillary probate is not a full probate. Rather, the ancillary probate serves only
to transfer the real property located in the second state. But, an attorney will still
need to be retained (and paid) to file and administer the ancillary probate

It is not uncommon for North Dakotans to own winter homes in Arizona, Texas or
Florida or lake cabins or hunting lodges in other states. These types of assets, if
held in probate form, will be subject to an ancillary probate proceeding.

An ancillary probate proceeding can be avoided for out-of-state real property if it is
transferred into a trust (revocable or otherwise). Alternatively, many states allow the use of a transfer on death
deed, which can serve as a non-probate means of designating who receives the
property on the death of the owner.

Other Reasons Why Having a Will is a Good Idea

There are additional reasons why having a Will is a good idea. Wills generally include
a guardianship clause when parents have minor children. This clause allows the parents
to name the person they want to serve as guardian should the parents die while their
children are still minors. Without a Will, it may be unclear who should serve as guardian,
and could result in family discord and possibly litigation if more than one person wants
to serve in that role.

In addition, Wills can be drafted so that the decedent’s assets are directed into a
testamentary children’s trust. Once the assets are transferred into the testamentary
children’s trust, the assets (and income from those assets) can be held and managed
for the benefit of the children. Assets can then be distributed to the children once
they attain the age of majority (or at later ages if desired).

Finally, having a Will can avoid potential litigation. All Wills include a clause that
names the person or persons who will serve as personal representatives or
executors of the estate. Without a Will, any interested person can apply to be the
personal representative or executor. Although an order of priority for appointment
as personal representative is provided by state statute, it is entirely possible for a
group of individuals (i.e., siblings) to have equal priority for appointment.

In most cases, whenever there are minor children, probate assets, or a history of
family discord, a Will is a good idea.

What is the Difference Between Probate and Non-Probate Assets?

Probate assets are any assets that require a probate proceeding in order to pass to
the intended heir or devisee (if the decedent had a will) or the individual entitled to
receive the property under the laws of intestacy (if the decedent had no will).
Probate assets include real property that is titled solely in the decedent’s name; but
also includes real property in which the decedent owned a tenants in common
interest at death. Tenancy in common means that each of the owners have an
undivided proportionate interest in the entire property. For example, it is common
for farmland to pass out of an estate to adult children as tenants in common. If a
child died owning that tenants in common interest, a probate proceeding would be
required for that child’s own estate.

Examples of other probate assets include – (1) personal property, such as jewelry,
furniture, and personal effects; (2) bank accounts or brokerage accounts solely in
the decedent’s name; (3) interests in partnerships, corporations, or limited liability
companies owned by the decedent; (4) life insurance policies that name the estate
as the beneficiary; (5) recreational vehicles and automobiles solely in the
decedent’s name.

Non-probate assets are those assets that already describe how the property will
pass at death. These assets bypass probate and go directly to the designated

Examples of non-probate assets include – (1) real property owned in joint tenancy
with rights of survivorship; (2) bank or brokerage accounts held jointly or with
payable on death (POD) or transfer on death (TOD) beneficiaries; (3) automobiles
and other vehicles held jointly; (4) any property held in the name of a trust; (5) life
insurance with designated beneficiaries (other than the estate); and (6) retirement
accounts with designated beneficiaries (other than the estate).

Revocable Living Trusts – A Good Idea?

A Revocable Living Trust can be a good estate planning option if the primary goal
of your estate plan is to avoid probate and to provide a means to manage your
assets should you become incapacitated. Transferring your property into a Trust,
including a Revocable Living Trust is also a good way to avoid the need for an
ancillary probate proceeding.

A Revocable Living Trust is a trust you set up during your lifetime. The person
who sets up the trust is called the grantor (or sometimes, the Settlor, Donor, or
Trustor). Once assets are transferred into the trust, the assets become non-probate
assets, which means that no probate will be required to distribute the assets in the
trust to the intended beneficiaries.

If a grantor transfers all of his or her assets into a Revocable Living Trust, there
will be no need for a probate proceeding because all of the assets will be in nonprobate form.

A Revocable Living Trust provides for the distribution of income and principal to the
grantor during the grantor’s lifetime. Once the grantor dies, the trust serves as a
“will substitute” because the trust itself describes how the assets in the trust will be

A Simplified Stand-Alone Revocable Living Trust can be used for the purpose of
holding out-of-state real property, such as lake cabins or vacation property owned
in another state, that would otherwise require an ancillary probate proceeding.

Do I Really Need a Will?

A question that is often asked in the estate planning context is whether a Last Will
and Testament (“Will”) is actually needed. The answer, like all things in life, is it
depends. It is possible, depending upon your assets, how those assets are owned,
and your family composition, to arrange the assets in your estate in such a way that
your assets will pass according to your wishes without having a will.

The reason this is possible, in part, is because of the distinction between probate
and non-probate assets. Non-probate assets, such as assets with a beneficiary
designation, a payable on death or transfer on death designation, or assets that are
jointly owned already designate the person or persons who will receive those assets
at your death. These non-probate assets pass outside of your will to the designated person without
requiring a probate proceeding. Probate assets are all assets that are not non-probate assets.
Consequently, if each of your assets is set up in non-probate form;
there will be no assets that will be subject to your will.

Another reason a person may not need a will is if they are satisfied with how their
assets will pass without one. If a person dies without a will owning assets that are
not set up in non-probate form, the assets will pass according to the laws of
intestacy in the state in which you were domiciled at your death.

Is Probate A Bad Thing?

Probate is the legal process by which assets are transferred out of a deceased
person’s estate to his or her heirs and devisees. Probate is required in any state
where real property is owned solely or as a tenant in common by the decedent. In
addition, in North Dakota, probate is required if the decedent died owning $50,000
or more in other probate assets in the decedent’s name.

As part of probate, a court appoints a personal representative or administrator to
gather the decedent’s probate assets and transfer those assets to the person or
persons entitled to receive them.

It is not unusual for clients to ask for their estate plans to be formulated with the
primary goal of avoiding probate. Clients may have heard horror stories about how expensive probate can be. And
in some states, where attorneys are allowed to charge legal fees based on the
percentage value of assets in the estate, the cost of probate can be prohibitive.

North Dakota is not one of the states that allows attorney fees for probate
proceedings to be based on the value of the estate; therefore, in North Dakota most
attorneys charge their regular hourly rate. The effect is that although a complex
probate can be expensive, a simple probate normally is not.

In addition, there are some reasons why a probate proceeding may be a good idea.
A probate proceeding can shorten the period of time in which creditors can submit
a claim against the assets in the estate. As part of probate proceedings, Notice to
Creditors is often published in the newspaper where the decedent lived. If Notice
to Creditors is published as part of a probate process, creditors must submit their
claims no later than 90 days after the date Notice to Creditors is published. If no
Notice to Creditors is published, creditors have three years after the decedent’s
death to submit claims. If assets have already been distributed, those assets may
need to be clawed back to pay any valid claims submitted during the three-year

What Happens When You Die Without a Will?

A concern many people have is whether they actually need a Last Will &
Testament (“Will”). In order to answer that question, it is important to understand
how your property would pass if you do not have a Will. If you die without a
Will, any probate assets you have will pass according to the laws of intestacy in the state you
were domiciled in at the time of your death.

If you died without a Will in North Dakota, all of your probate assets would pass to
your surviving spouse, but only if:

1. You died leaving no surviving children, grandchildren, etc. (“descendants”)
and no surviving parent; or
2. All of your surviving descendants are also descendants of your spouse AND
your spouse has no other surviving descendants.

In essence, this provision limits the ability of a surviving spouse who has children
not in common with the deceased spouse to receive the entirety of the deceased
spouse’s estate. If the above conditions are not met, the surviving spouse is
entitled to a reduced share of the probate assets. Consequently, if you want your
spouse to receive all of your probate assets or a percentage that differs from North
Dakota intestacy laws, you would need a Will to ensure that occurs.

If you died without a Will and left no surviving spouse, your probate assets would
be distributed as follows:

1. First to your descendants by right of representation, (by right of
representation means that children receive a deceased parent’s share); but if
you left no surviving descendants;
2. Then to your parents in equal shares, or to the survivor of them, but if you
left no surviving parent;
3. Then to your siblings by right of representation, but if no one is surviving in
this group;
4. Then to your grandparents and so on.

If none of the persons entitled to receive under the laws of intestacy exist or are
surviving at your death, your probate assets would pass to the state.
If the laws of intestacy are in line with how you would like your probate assets to
be distributed at your death, you may not need a will. But there may be other
reasons why having a Will is a good idea.