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What happens when a deceased person's estate owns out-of-state real property?

Out of state real property carries extra challenges in probate court when compared to other assets. Because such property cannot be transported across state lines, the state in which it resides has an interest in its administration, and a separate probate process is usually required to ensure that the proper parties receive title.

Typically, the administrator in the state where the deceased person died has to submit the Will to probate in the state where the real property is located. This is for the purpose of distributing all property located in that state. The Will would also be submitted to probate in the death state in order to transfer title of the real estate to the recipient. This process may be easy enough if no issues come up.

If no issues come up, the administrator would have the option to file copies of letters of appointment, as well as official bond, with the clerk of the probate court and then record the deed. The real estate would pass directly from the deceased person to the beneficiary.

In New Jersey, of course, the recipient would be required to pay inheritance tax if the value of the real property exceeds $25,000 and the recipient is not a Class A relative-a wife, parent, grandparent or grandchild. If the deceased person was not a resident of New Jersey at the time of death, their estate would not be required to pay New Jersey estate taxes.

It is important to work with a knowledgeable attorney when this issue comes up. Because some states do require inheritance taxes on property transfers, one should check with a local attorney.

Source: The Epoch Times, "Gifting Property Located in Another State," Arleen Richards, March 11, 2013

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