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How to Handle Out-of-State Property in Your Maryland Estate Plan

Yollette Atkinson May 12, 2025

If you live in Maryland but own property in another state, estate planning can become more complex. Without the right strategy, your loved ones may face legal hurdles and additional costs when dealing with your estate. In this blog, we’ll explore the best ways to handle out-of-state property in your Maryland estate plan.

Understanding the Legal Challenge

Each state has its own laws regarding property ownership and probate—the legal process of distributing assets after death. If you own real estate in another state, that property does not automatically pass through Maryland's probate courts. Instead, it will likely go through ancillary probate, a secondary process in the state where the property is located.

This can lead to:

  • Delays – Your heirs may have to wait months or even years for multiple probate processes to conclude.

  • Additional Costs – Legal fees, court costs, and executor expenses increase when probate occurs in multiple states.

  • Complexity – Different states may have different tax laws, inheritance rules, and probate procedures.

Learn more about probate and estate administration in Maryland.

Estate Planning Strategies for Out-of-State Property

1. Establish a Revocable Living Trust

One effective method is to place out-of-state property into a revocable living trust. This allows the property to bypass probate entirely and pass directly to your beneficiaries.

For details on how trusts work and when to update them, read:
➡️ Q&A: Updating a Trust in Maryland

2. Use Joint Ownership with Rights of Survivorship

Joint tenancy or tenancy by the entirety allows property to pass automatically to the surviving owner without going through probate. This strategy is common among married couples but may not suit every situation.

Interested in other options? See our blog:
➡️ How to Protect Your Estate from Creditors in Maryland

3. Consider a Transfer-on-Death (TOD) Deed

Some states allow TOD deeds, which let you name a beneficiary who automatically inherits the property at your death—without probate. Maryland does not permit TOD deeds, but if your out-of-state property is in a state that does, this can be an easy fix.

For deed strategies, visit our page on deed services.

4. Sell or Gift the Property During Your Lifetime

Selling or gifting the property while you’re alive can avoid probate altogether. However, there may be tax implications. Consult both legal and tax professionals before moving forward.

Explore more about minimizing taxes in this guide:
➡️ Understanding Estate Taxes in Maryland Probate

5. Work with Attorneys in Both States

Because each state has unique probate and real estate laws, you should work with an estate planning attorney in Maryland and one in the state where your property is located. This ensures your estate plan is valid and optimized across jurisdictions.

Final Thoughts

Owning out-of-state property doesn’t have to complicate your Maryland estate plan. Whether through a will, trust, joint ownership, or deed strategy, planning ahead can help avoid unnecessary stress, delays, and costs for your loved ones.

At Atkinson Law, we listen to our clients, provide clear recommendations, and create tailored estate plans to protect what matters most. Call us at (410) 882-9595 or contact us online to get started.

Citations:

  • American Bar Association. (2023). "Understanding Probate and Estate Planning."

  • American College of Trust and Estate Counsel. (2023). "Revocable Living Trusts and Estate Planning."

  • Internal Revenue Service. (2023). "Estate and Gift Taxes."

  • Maryland Courts. (2023). "Probate and Estate Administration."

  • Maryland State Bar Association. (2023). "Maryland Estate Planning and Property Laws."

  • National Association of Estate Planners & Councils. (2022). "Estate Planning Considerations for Multi-State Property Owners."