Snowbirds With Property in Multiple States Need More Than a Basic Estate Plan

Arizona Residents Who Split Time Between States Face Estate Planning Risks That Most People Don't See Coming

Arizona draws retirees and snowbirds from across the country for good reason. The winters are mild, the cost of living is manageable, and communities across the Valley have built themselves around the lifestyle that people who spent decades working toward retirement actually want. But for the growing number of people who own property in Arizona and one or more other states, the estate plan that works perfectly for a single-state resident can create serious complications when it isn't designed with multi-state ownership in mind.

The problem isn't unusual. A couple from Minnesota owns a home in Scottsdale that they use from November through April and return to their primary residence up north for the rest of the year. When one of them dies, that Arizona property doesn't automatically pass to the survivor. It may be subject to Arizona probate, regardless of what any document signed in Minnesota says or how straightforward the couple believed their estate to be.

At the Law Firm of Brown & Jensen, our Arizona estate planning attorneys work with snowbirds and multi-state property owners throughout the Phoenix metro area and across Arizona to build coordinated estate plans that account for every state where a client holds real property. The goal is to make sure nothing falls through the cracks when it matters most.

Why Owning Property in Multiple States Creates Probate in Multiple States

The core issue for snowbirds with out-of-state property is a legal principle called ancillary probate. When a person dies owning real estate, that property must go through probate in the state where it's physically located, not necessarily in the state where the deceased person lived. That means a Minnesota resident who owns an Arizona vacation home could trigger two separate probate proceedings: one in Minnesota to handle everything there, and one in Arizona to address the property here.

Arizona probate is governed by the Arizona Uniform Probate Code, and it applies to real property located in Arizona regardless of where the property owner lived or where their primary estate documents were prepared. Ancillary probate in Arizona requires opening a separate case in Arizona's Superior Court, appointing a personal representative, and going through a process that takes time and money, often at exactly the moment when a surviving spouse or family members can least afford either.

The same principle works in reverse. An Arizona primary resident who owns a cabin in Colorado, a condo in Florida, or farmland in Iowa may have an estate plan that works perfectly under Arizona law but still requires separate probate proceedings in each of those states when they die.

What a Coordinated Multi-State Estate Plan Actually Looks Like

The good news is that ancillary probate is largely avoidable with the right planning. The most effective tool for multi-state property owners is a revocable living trust, which holds title to real property in every state and allows assets to pass to beneficiaries outside of probate entirely, regardless of how many states are involved.

When an Arizona vacation property is titled in the name of a properly funded trust rather than in an individual's name, it doesn't trigger probate in Arizona when the trust creator dies. The successor trustee handles the transfer according to the trust's terms, privately and without court involvement.

A well-designed estate plan for a multi-state property owner typically includes:

• A Revocable Living Trust as the Centerpiece: The trust holds title to real property in every state where the client owns real estate, eliminating the need for ancillary probate in each of those jurisdictions. The trust also provides continuity of management if the client becomes incapacitated, which is especially important for people who split time between states and whose primary support network may be hundreds of miles away.
• A Pour-Over Will: A will that directs any assets not already in the trust to flow into it at death, ensuring nothing is left outside the trust's protective structure by accident.
• Properly Updated Property Titles: A trust that isn't properly funded — meaning the property titles haven't actually been transferred into the trust's name — provides none of the probate-avoidance benefits it was designed to deliver. This is one of the most common and most costly estate planning mistakes, and it requires attention in every state where property is held.
• Durable Powers of Attorney and Healthcare Directives: For someone who spends significant time in Arizona, having Arizona-compliant documents that authorize a trusted person to act on their behalf here, rather than relying on documents drafted under another state's law, is an important safeguard.
• Coordination with Out-of-State Counsel When Needed: For clients with significant property in other states, a truly coordinated plan may require input from attorneys in those jurisdictions to ensure the Arizona plan works seamlessly with whatever documents govern property elsewhere.

The Domicile Question and Why It Matters for Taxes and Benefits

For snowbirds who spend significant time in Arizona each year, there's a related question that estate planning can't ignore: which state is actually your legal domicile? Domicile is the state you consider your permanent home, and it determines which state's laws govern your estate, which state can tax your income and estate, and which state's homestead exemptions and creditor protections apply to you.

Some snowbirds inadvertently maintain domicile in their original home state without realizing it, paying taxes they might not owe and missing out on Arizona's favorable tax environment. Others intend to establish Arizona domicile but haven't taken the concrete steps required to do so, leaving them exposed to claims from their former state.

Attorney Shad M. Brown helps clients think through the domicile question carefully and structure their plans to reflect where they actually intend to live and what tax treatment makes sense for their situation. A former IRS tax attorney who holds a Master of Laws in Taxation, Shad brings a level of tax insight to estate planning that most attorneys simply don't have.

Attorney Scott T. Jensen complements that with deep experience advising clients on the trust and estate planning side, having guided hundreds of clients through the process of building plans that hold up across complex family and property situations.

Together, their backgrounds mean that the tax implications of a multi-state estate plan, including federal estate tax exposure for larger estates and state income tax considerations for clients transitioning domicile, are addressed as part of the planning process rather than discovered afterward.

Common Mistakes Multi-State Property Owners Make

The snowbirds who end up in the most difficult situations are almost always people who had some estate planning in place but didn't account for the multi-state dimension. The most common problems include:

• Relying on a Will Alone: A will doesn't avoid probate. It goes through probate. For a multi-state property owner, a will-based plan almost guarantees multiple probate proceedings in multiple states.
• Failing to Update Beneficiary Designations: Retirement accounts, life insurance policies, and financial accounts pass by beneficiary designation outside of the will and trust, but only if those designations are current, consistent with the overall plan, and not in conflict with each other.
• Forgetting to Fund the Trust: As noted above, a trust that doesn't hold title to the property it was created to protect is a document, not a plan. Every time a property is purchased or refinanced, the title needs to be reviewed to confirm it's in the trust's name.
• Not Reviewing the Plan After a Major Life Change: A divorce, the death of a named trustee or beneficiary, a move from one primary state to another, or the purchase of new property in a different state can all render an existing plan inadequate without any obvious warning signs.
• Assuming One State's Documents Cover Everything: Documents prepared in another state may not be recognized in Arizona in the form they were drafted, and Arizona-specific documents may be needed for property located here.

Brown & Jensen Helps Arizona's Snowbird Community Plan With Confidence

The Law Firm of Brown & Jensen serves clients throughout Mesa, Scottsdale, Tucson, Chandler, Peoria, Goodyear, Payson, and Show Low, with attorneys who understand both the opportunities and the complications that come with owning property in multiple states.

Whether you're a longtime snowbird who has never had your out-of-state holdings fully addressed in your Arizona plan, or someone newly purchasing Arizona property who wants to get the structure right from the start, we can help.

Contact us today for a free consultation. There are no upfront costs to get started, and our attorneys will take the time to understand your full situation before recommending a plan.

"All of our needs were met by Scott, and we have every faith in his excellence. Scott was able to complete the Trust, Living Will, POA's as needed, very professional and personable." ─ Daniel, ⭐⭐⭐⭐⭐