Owning property outside California can significantly increase the complexity of your estate plan. For residents of California, integrating an out-of-state home into your estate strategy triggers two important considerations: the risk of needing an ancillary probate, and ensuring proper deed, title and trust “funding” steps.
At California Living Trusts we guide you through each phase — covering ancillary probate, deed prep, title company practices, local counsel, property tax considerations and funding steps — so your out-of-state real estate becomes a seamless part of your living trust.
When the property is Out-of-State: Know the ancillary probate risk
When you hold real estate in another state while a resident in California, the laws of the state where that property is located govern transfers, title and probate. That means if you pass away, the asset may face a secondary probate process in the state of the property’s location — even if you set up a California trust.
The term ancillary probate refers to this secondary court proceeding, and the process does incur an additional cost to administer the decedent’s out-of-state property in the situs state on top of the primary probate in the deceased’s home state.
To avoid that risk, you’ll want to work with local counsel in the state where the property is located (to be certain title company practices there align with trust ownership) and verify how property tax considerations apply once the property is transferred into the trust.
The “funding steps” for the property should include updating the deed, coordinating with the local title company, and confirming that your California trust is accepted by that state’s recorder or county land office.
The deed preparation must reflect correct language and reference the trust; title insurance and property tax status must be verified before and after transfer.
How to transfer title
Transferring title of out-of-state real estate into your California living trust involves several key steps and decisions:
- Deed type (quitclaim/grant) – Most states permit either a grant deed or quitclaim deed (or state-specific equivalent) to move property into a trust. You’ll want to select the deed type accepted by the county recorder in that state and recommended by the title company.
- Legal description – The deed must include the full legal description of the property as it appears on the current recorded title, to execute the correct transfer and avoid potential encumbrance issues.
- Notarization & recording in other states – The deed must be notarized according to that state’s laws and then properly recorded in the county where the property is located. The title company practices there may require additional affidavits or successor trustee endorsements.
- Insurance updates – After recording, update the title insurance policy (or obtain a new one if required) to reflect that the property is held by the trust. Update homeowner’s insurance and property tax records to avoid potential lapses or unintended personal liability.
By promptly addressing each of these elements, you minimize the risk that the property will still be treated as individually owned — thereby triggering ancillary probate or complicating the successor trustee’s access.
Ongoing maintenance
After transfer, maintaining the out-of-state real estate as part of your trust requires ongoing vigilance. Here are the critical maintenance elements:
- Homestead/local rules – Some states and counties apply special local rules, homestead exemptions or elder-owner protections that may change once the property is held in a trust. It’s wise to review these rules annually.
- Property managers – If the property is a rental or vacation home, make sure that rent deposits go to the trust account (not a personal account) and that the property manager is aware the owner is a trust entity.
- Rent deposits to trust – For income-producing property, have the lease or property manager designate the trust as the recipient of rental income to preserve trust accounting and simplify successor access.
- Successor plan – Confirm that the successor trustee named in the trust is willing and able to oversee out-of-state property, including remote management or sale, and understands local counsel may be required.
- Keeping records current – Maintain updated copies of the trust instrument, deed, title insurance and property tax payment records, and keep contact details for the local attorney, title company, property manager and insurer.
When you purchase or already own property outside California, or if you have multiple jurisdictions involved, contact us at California Living Trusts to schedule a review of your out-of-state real estate and confirm your plan is properly funded — avoiding unintended ancillary probate or transfer delays.
As a result of tackling deed prep, title company practices, local counsel coordination, property tax considerations, and funding steps — then following through with diligent maintenance — you’ll integrate your out-of-state property into your California living trust cleanly. That gives you peace of mind and a clear roadmap for your successor.