By, Zois Manaris, Elder & Disability Law Clinic Student, Fall 2022
The best way to assure that one’s property passes as one would like is to execute a valid will.[1] If someone dies without a valid will, their estate will pass via intestacy, a one-size-fits-all approach written by the relevant state legislature.[2] And the state legislature’s approach (although intended to do so) may not line up with the specific decedent’s intent.[3]
But even if someone has written a will, there are quirks that may arise when that person’s estate stretches across state lines.[4] In such a situation, the will-writer will need to familiarize themselves with the principles of conflict of laws. Understanding conflicts principles can be important in avoiding unexpected––and unintended––outcomes in how one’s estate passes.
When a decedent’s property lies in multiple states, different states’ laws may apply to the passing of property depending on the circumstances.[5] The conflict of laws rules tell us which states’ laws matter: (1) real property (land) passes by the law of the situs (the state where the land is),[6] and (2) personal property (movable property) passes by the law of the state where the decedent dies domiciled.[7] Accordingly, the validity of a will trying to pass an interest in land is determined by the law of the state where the land is.[8] And the validity of a will trying to pass personal property is determined by the law of the state where the will-writer was domiciled at their death.[9]
These rules are important to know because they may not comport with what a person seeking to execute a single, all-encompassing will might expect. If unknown to the will-writer, these rules could lead to unwanted results. And one need not strain too hard to think about scenarios where such unwanted results could occur.
For example, consider a person domiciled in Virginia who owns personal property in another state––say, West Virginia. The Virginia domiciliary may (very reasonably, yet incorrectly[10]) think, because that personal property is located in West Virginia, that personal property would pass according to West Virginia law. The Virginia domiciliary may then needlessly spend time and money learning what West Virginia law requires in writing a will in the hopes of ensuring that their West Virginia-located personal property would pass according to their wishes. Simply knowing that the personal property in West Virginia would pass according to Virginia law (assuming the Virginia domiciliary is still so domiciled at their death)[11] avoids this headache. Fortunately for the Virginia domiciliary in this example, the conflicts issue here would amount to nothing more than time and energy lost.
Another example raises a worse potential outcome. Consider a person domiciled in Virginia who owns the following property: (1) a house in Virginia, (2) a plot of land in North Carolina, and (3) personal property in both Virginia and North Carolina. The person executes a will pursuant to the Virginia will formality requirements that disposes of all the property. But that will does not conform to the will formality requirements of North Carolina.
Virginia law controls the passing of the Virginia house[12] and the personal property in both states (assuming the person dies domiciled in Virginia).[13] So, that portion of the decedent’s estate will pass as laid out in the will.
But the North Carolina property would not pass according to the will. North Carolina law––and thus North Carolina’s will formalities requirements––controls how the North Carolina land passes.[14] Because this will does not conform to the North Carolina requirements, there would be no valid will to control how to dispose of the North Carolina land.[15] Accordingly, the portion of the will disposing of that land could not be admitted to probate.[16] Thus, the land would pass by North Carolina’s laws on intestacy, meaning the land could go to someone else than who the decedent intended.[17]
Such an outcome would be a shame––a person not versed in conflict of laws (a blissful existence) might very reasonably think that since they are a Virginia resident, Virginia law is all they need to follow in disposing of their property. One way to avoid this out-of-state land issue would be for the Virginia resident to create a revocable trust and put their North Carolina land in the trust.[18] Because the land is in a trust, it would not pass through probate (like it would if the land was disposed of via will).[19] And, to be valid, the trust would need only conform with the Virginia trust requirements.[20] By using a trust here, the conflicts issue arising from the will would be avoided.
Thankfully, a conflicts issue will not arise in every estate planning situation, but when one does, the results have the potential to be harsh. Once one knows how to play the conflicts game, these harsh results can easily be avoided, and people can do what they intended to do with their wills: pass along their property in the way they wish.
[1] Alexandra Wallach, Intent and Intestacy in Virginia, Wm. & Mary Elder and Disability Law Clinic Blog (Sept. 20, 2022), https://elderlawclinic.pages.wm.edu/2022/09/20/intent-and-intestacy-in-virginia/.
[2] Id.
[3] Id.
[4] See Laws Applicable to Wills, USLegal, https://conflictoflaws.uslegal.com/laws-applicable-to-wills/ (last visited Oct. 16, 2022); see also Robert M. Bozeman, The Conflict of Laws Relating to Wills, Probate Decrees and Estates, 49 A.B.A. J. 670 (1963).
[5] See, e.g., Laws Applicable to Wills, supra note 4.
[6] Restatement (First) of Conflict of Laws § 249 (1934) (“The validity and effect of a will of an interest in land are determined by the law of the state where the land is.”).
[7] Id. § 306 (“The validity and effect of a will of movables is determined by the law of the state in which the deceased died domiciled.”).
[8] Id. § 249.
[9] Id.§ 306.
[10] See id.
[11] See id.
[12] Id. § 249.
[13] Id. § 306.
[14] Id. § 249.
[15] See id.
[16] See Out-of-State Property and Probate: What You Need To Know, Czepiga Daly Pope & Perri (June 17, 2021), https://www.czepigalaw.com/blog/out-of-state-property-and-probate-what-you-need-to-know/. The probate process for the North Carolina land would take place in North Carolina and be an “ancillary probate” process, a probate process in addition to the one taking place in Virginia. See id.
[17] See Wallach, supra note 1 (focusing on the Virginia intestacy rules in particular).
[18] See Merrell Bailey, If You Own Out of State Property, Establish a Trust, Your Caring Law Firm, https://yourcaringlawfirm.com/if-you-own-out-of-state-property-establish-a-trust/ (last visited Oct. 16, 2022).
[19] Id.
[20] See, e.g., Unif. Trust Code § 403(1) (2000); N.C. Gen. Stat. Ann. § 36C-4-403(1) (2022). Alternatively, this hypothetical trust would also be valid if it conformed with North Carolina’s laws on trusts. See, e.g., Unif. Trust Code § 403(3) (2000). See generally Eugene F. Scoles, Choice of Law in Trusts: Uniform Trust Code, Sections 107 and 403, 67 Mo. L. Rev. 213 (2002).