Second Home Issues

Physician's Money Digest, November15 2004, Volume 11, Issue 21

Note:

If you own a vacation home in anotherstate (about 20% of physicians do),your estate might have to go through probatein the state where the home is locatedas well as in your own state. Generally,when a second home goes through whatis known as ancillary probate, the courtin the second state will accept the willfiled in your home state and allow yourexecutor to dispose of the property. Oneway around this hassle is to create a revocableliving trust to own your assets,including the vacation home. Trust assetsdon't have to go through probate, butwill be passed on directly to your heirsaccording to the trust's terms. A livingtrust does not shield your assets fromestate taxes. If your estate, including thesummer home, is worth more than theestate tax threshold, the excess will besubject to estate taxes. This year, thethreshold is $1.5 million.