The Probate Estate v. Non-Probate Transfers
First off, keep in mind that only the "probate estate" is probated at all. Assets held in joint tenancy with right of survivorship, assets held in trust, and assets with a death beneficiary, for example, pass by non-probate transfer. Some states also have a rebuttable presumption that all tangible personal property which is not part of a business owned by someone in a married couple that is not subject to a certificate of title is owned in joint tenancy by right of survivorship in favor of a surviving spouse.
The probate estate consists only of property held in the name of the decedent with no beneficiary designation and no joint tenants (although there could be tenant-in-common co-owners or co-owners as part of a general partnership).
The Primary Domicile Probate
The primary probate is generally conducted in the state and county in which the decedent was domiciled at death. Intangible property, including interests in entities, and the legal rights of the decedent are generally deemed to be located at that domicile for probate purposes.
The common law choice of law rule is to have moveable property also governed by the law of the state of domicile. While it doesn't have constitutional standing, it is widely adopted.
The unsecured claims (i.e. claims not secured by collateral) of third-parties against the decedent are deemed located at the decedent's domicile at death.
A will contest is almost always conducted solely in the primary domicile state, and that resolution has collateral estoppel and arguably full faith and credit clause binding effect in other ancillary probate cases. Almost every state, however, recognizes the validity of a will that was valid where executed at the time it was executed.
Estate plans of individuals with property in many states that would be subject to many ancillary probate proceedings are routinely devised so that the property subject to ancillary probate is either not subject to probate at all, because it is in a revocable trust or joint tenancy with right of survivorship or has transfer on death beneficiary, or it at least in an entity whose shares are handled in the primary probate rather than in an ancillary probate, when the decedent was represented by counsel (and it verges on malpractice not to recommend that this be done if estate planning counsel is aware of the facts).
Of course, not everyone hires a lawyer to do their estate plan before they die (even if they meant to do so), so ancillary probates still happen.
Ancillary Probate Proceedings
When there is real property in the estate owned outright by the decedent, and not subject to a joint tenancy or other non-probate transfer (such as a transfer on death deed) and not owned via a trust or entity, then an ancillary probate must be opened up in that state to probate that parcel of real property.
One if left in an ancillary probate dealing with real property and debts for which that property is collateral in the ancillary probate.
But the ancillary probate is largely a formality and mostly defers to the rulings of the court in the primary probate case.
Sometimes closely held business which is a sole proprietorship or general partnership (as opposed to an entity), with a state or local specific license, must be the subject of an ancillary probate.
But more often, the closely held business is an entity with a license and tangible personal property held in the entity. In those cases, the stock or membership interest is intangible property that can be probated at the domicile of the decedent, rather than in an ancillary probate where the business is located.
In other words, let's say a person lives in Maine, but has property in
20 different states. Various houses, boats, bank accounts, brokerage
accounts, you name it. Does the will have to then be probated in every
one of the states in which the various property resides?
The bank accounts, brokerage accounts, and most of the etc. that are part of the probate estate would be probated in Maine.
The houses outside of Maine and possible the cars and boats and sole proprietorship inventory, equipment and license transfers outside of Maine would be resolved in ancillary probate proceedings.
Conflicts Of Law Between Primary And Ancillary Probate Laws
What happens if the probate laws of the states conflict?
The procedural rules of the forum state govern the ancillary probate, rather than those of the primary probate case.
Every state adopted the general rule that the directions of a will are valid and enforceable subject to only a handful of exceptions, and in most cases, intestacy rules when there is no surviving spouse are likewise identical.
Almost all states would honor a will admitted to probate in the primary probate state (and are arguably required to do so under the full faith and credit clause), even if it would not have been admitted to probate in the ancillary probate state.
While it is theoretically possible to have a conflict of law regarding general partnership property, inheritance of general partnership property is largely governed by the Uniform Partnership Act and this model state law is, in fact, a law that has been adopted in every U.S. state and is uniform on this point in every U.S. state.
The main circumstances in which there could be conflicts between the state probate laws are:
- quirky intestate situations (differences between per stirpes and per capita at each generation, or differences between treatment of half-blood or multiple line of descent heirs),
- exemptions from creditors (e.g. homestead rights, tenancy-by-entirety rights, special legacy property rules in some Southern states),
- details of slayer statutes (e.g. does negligent homicide count?),
- divorce revocation laws (not every state revokes will provisions in favor a divorced spouse),
- community property rights in property,
- mandatory inheritance rights of disinherited spouses (dower, curtsy and force share laws, some states treat this as a creditor's claim, others don't), and
- provisions for what happens when a specific devise fails because an asset no longer exists if the will doesn't specifically state what happens.
It is fairly rare for this to come up in practice, however, since normally the ancillary probate forum state court defers to the primary state appointed executor's requests, and it is quite rare for that to be disputed by other parties to the estate in the ancillary proceeding. It happens, I've been there, but it is very uncommon.
In those cases, there is little formal guidance. The forum state's law is presumed to apply, but that presumption can be overcome by showing that some other state has the most significant connection to the legal issue over which there is a conflict. The analysis is handled by the forum state court on a case by case basis in the rare cases where it comes up.
The primary probate court can also sometimes make an end run around ancillary probate court rulings applying substantive ancillary probate forum probate laws to property in the ancillary probate state by ordering a compensatory adjustment in how property in its jurisdiction is distributed to conform to the laws of its state.
A recent case from New Hampshire discussed how choice of law works in probate cases:
We first address whether the New Hampshire probate division erred in
applying Massachusetts’ pretermitted heir statute, rather than New
Hampshire's RSA 551:10, to the testator's will. On appeal, the
petitioner argues that, despite the language of Article Ninth in his
mother's will, RSA 551:10 applies because his mother was domiciled in
New Hampshire at the time of her death and her estate consists of only
personal property. The respondent argues that “[t]he intent of Marie
G. Dow is clear,” (bolding and capitalization omitted), pursuant to
Article Ninth of her will, that Massachusetts law should apply and
asserts that New Hampshire “give[s] effect” to choice-of-law
provisions in wills. We agree with the petitioner.
The probate division's findings that the testator's estate consists of
only personal property and that she was domiciled in New Hampshire at
the time of her death are not challenged on appeal and need not be
disturbed. We review the probate division's application of law to
undisputed facts de novo.
Under New Hampshire law, personal property of a testator generally
passes according to the law of the state of domicile. Compare Eyre, 37
N.H. at 120 (“The general principle of the common law is, that the
right and disposition of movables is to be governed by the law of the
domicil of the owner.”), with Mass. Gen. Laws Ann. ch. 199, § 1 (West
2012) (stating that Massachusetts, when administering the will of a
non-inhabitant of the Commonwealth, will dispose of the estate
“according to his last will, if any; otherwise ... his personal
property shall be distributed and disposed of according to the laws of
the state or country of which he was an inhabitant”). Our law comports
with Section 263(1) of the Restatement (Second) Conflicts of Laws,
which provides:
Whether a will transfers an interest in movables and the nature of the
interest transferred are determined by the law that would be applied
by the courts of the state where the testator was domiciled at the
time of his death.
Restatement (Second) Conflicts of Laws § 263(1), at 121 (1971).
Compare id. (pertaining to transfers of personal property by will),
with id. § 239(1), at 48 (“Whether a will transfers an interest in
land and the nature of the interest transferred are determined by the
law that would be applied by the courts of the situs.”).
Because the testator's will disposes of only personal property, i.e.,
“movables,” the nature of the interests in this property will be
determined by the laws of New Hampshire — where she was domiciled at
death. Restatement (Second) Conflicts of Laws, supra § 263(1), at 121.
The law in New Hampshire is clear, and we are not persuaded that there
is a reason to deviate from it in the instant case.
The respondent relies upon our decisions in In re Farnsworth's Estate,
109 N.H. 15, 241 A.2d 204 (1968), and Royce v. Estate of Denby's, 117
N.H. 893, 379 A.2d 1256 (1977), in support of her position that
Massachusetts’ pretermitted heir statute applies to the will because
New Hampshire law honors the testator's intent, as expressed in
Article Ninth of Marie G. Dow's will, to have her estate “administered
and enforced according to the laws of the Commonwealth of
Massachusetts.” This reliance is misplaced.
The respondent emphasizes that the court, in In re Farnsworth Estate,
“gave effect to the choice of law provision in [the testator's] will.”
However, our review in that case was limited to the testator's
designation of New York law as the law to apply to her testamentary
trusts. In In re Farnsworth's Estate, the testator was a domiciliary
of New Hampshire at the time of her death though her will was “drawn
and executed in New York City.” The testator's will stated that it
shall be administered in the State of New York and shall be construed
and regulated by the laws of the State of New York.”
We noted that the administration and validity of a “ ‘trust of
movables ... created by will’ ” is generally governed by the law of
the state of the testator's domicile at death, but explained that
there are “ ‘two situations in which the law of another state may be
applied to the administration of the trust. The first is where the
testator has designated the law of another state as the governing law.
The second is where the testator has fixed the administration of the
trust in a state other than that of his domicile at death. We
determined that the will “created both of these situations” and, thus,
held that “these trusts were intended to be and should be administered
in the State of New York.”
Here, the testator did not establish a testamentary trust. The fact
that the will at issue in In re Farnsworth's Estate disposed of the
testator's property via testamentary trusts was essential to our
reasoning and our decision in that case. see also In re Lykes' Estate,
113 N.H. 282, 284, 305 A.2d 684 (1973) (holding provision of will that
testamentary trust be construed according to laws of Texas was “a
valid provision which must be respected by this court” (citing Scott,
supra §§ 574-75; Restatement (Second) Conflicts of Laws, supra §
268(1), at 143). The pertinent rules to apply to dispositions of
property via will are dependent upon the form of the disposition and
the form of the property. See, e.g., Haynes v. Carr, 70 N.H. 463, 463,
480, 49 A. 638 (1900) (“There is a wide distinction between a gift to
charity and a gift to a trustee to be by him applied to charity.”
(quotation and emphasis omitted)); Eyre, 37 N.H. at 120 (a decedent's
personal property passes according to the law of the state of
domicile, while real property passes according to the law of the state
where it lies). Therefore, in the instant case, In re Farnsworth
Estate does not support deviating from New Hampshire law as the law
governing the disposition of personal property in Marie G. Dow's will.
cf. Robbins v. Johnson, 147 N.H. 44, 45, 780 A.2d 1282 (2001) (“The
pretermitted heir statute, on its face, applies to ‘wills,’ not to
trusts.”).
Similarly, the fact that the testator in Royce became a domiciliary of
New Hampshire after she had become incapacitated and never regained
capacity before her death was essential to our reasoning and our
decision in that case. “The Royce holding was limited to the facts of
that case, which are distinguishable from those before us.” In Royce,
we recognized that, because the testator had no opportunity due to her
incapacity to change her will after her move to New Hampshire, it was
inequitable to apply the New Hampshire rule that the law of the
domicile controls the succession to personal property when the
testator had no opportunity to respond to New Hampshire law. Here, the
testator had an opportunity to change her will after relocating to New
Hampshire approximately a year before her death.3 Therefore, Royce
does not support deviating from New Hampshire law as the law governing
the disposition of personal property in Marie G. Dow's will.
We note that our prior case law, contemplating the applicability of
New Hampshire's pretermitted heir statute where the facts implicated
more than one jurisdiction, has not expressly dealt with a provision
like that of Article Ninth in Marie G. Dow's will, expressing her
intent to have her estate “administered and enforced according to the
laws” of another state — the Commonwealth of Massachusetts. See, e.g.,
In re Estate of Rubert, 139 N.H. at 276, 651 A.2d 937 (applying
Virginia law to determine whether the plaintiff was a pretermitted
heir entitled to an intestate share of the testator's personal
property where the testator was domiciled in Virginia). While it is
true that we attempt to give maximum effect to a testator's intent,
our law does not support the application here of another state's
pretermitted heir statute independent of the governing law of the
testator's domicile at death with respect to dispositions of personal
property.
Section 264 of the Restatement (Second) Conflicts of Laws supports a
testator's ability, in bequeathing interests in personal property, to
select the rules of construction of another state for use in
construing the language of her will. See Restatement (Second)
Conflicts of Laws, supra § 264(1), at 125 (“A will insofar as it
bequeaths an interest in movables is construed in accordance with the
local law of the state designated for this purpose in the will.”); id.
§ 264 cmt. e at 126-27 (“The forum will give effect to a provision in
the will that it should be construed in accordance with the rules of
construction of a particular state.”). We have not expressly adopted
this section of the Restatement, and we need not consider doing so
here because even assuming without deciding that Article Ninth
designated Massachusetts’ rules of construction for application to the
will, neither Massachusetts’ nor New Hampshire's pretermitted heir
statute constitutes a rule of construction. As will be discussed in
section III, not only is RSA 551:10 not a rule of construction, it is
a conclusive rule of law.
We, therefore, hold that New Hampshire's pretermitted heir statute
applies to Marie G. Dow's will because she was a domiciliary of New
Hampshire at the time of her death and her will disposes of only
personal property. Accordingly, the probate division erred in applying
Massachusetts law to determine that the petitioner is not a
pretermitted heir.
In re Est. of Dow, 2019-0752, 2021 WL 199619, at *2–5 (N.H. Jan. 20, 2021) (caselaw citations omitted).
The Role Of Federal Courts
Notwithstanding the fact that parties to probate cases are frequently diverse in citizenship, there is an obscure court created doctrine that provides that probate cases are a matter of state rather than federal court jurisdiction. (The "well pleaded complaint rule" largely prevents federal question jurisdiction from applying.)
Part of the legal justification for this is that probate cases are in rem proceedings that primarily adjudicate rights in a particular collection of property (everything owned by the decedent) rather than primarily providing in personam relief between citizens of different states or countries, the way that a lawsuit for breach of contract or a tort or an injunction might.
So, unless title to the real property arises under the conflicting claims of two different states (which almost never happens for obvious reasons in the modern era of accurate surveying of state boundaries), diversity jurisdiction is not implicated.
