When a person dies and leaves behind an estate, that estate often goes into probate court where the court accounts for all of the assets, handles debts, and coordinates the distribution of remaining assets. Most assets are accounted for in the probate proceedings, but some assets are not included. The specific assets that are exempt from probate court depend on the jurisdiction that the property is in and often change from state to state. These are the assets that may be exempt from probate court in Florida.
When Can All Assets Avoid Probate?
Under Florida probate law, there are two distinct situations where probate court can be avoided entirely for all assets. The biggest reason why assets end up in probate court is that there is no named beneficiary to whom they are supposed to pass to.
If you want to avoid having your assets go through probate court, name beneficiaries for specific assets that will otherwise end up in probate court.
Assets That Avoid Probate
For an asset to avoid probate court, it must fit into one of these categories.
Does it Have a Named Beneficiary?
If an asset has a named beneficiary, it may not have to go to probate court. It may just pass directly to the beneficiary. In some cases, the asset will still go to probate if there is a question of ownership or the estate has a large amount of debt and the asset can be used to pay a large portion of it back.
Is the Asset In a Trust?
If the asset is owned by a trust, then it is no longer owned by the individual. The trust continues to exist even if the individual dies. The trust owns the asset and maintains ownership of the asset and the property is distributed to an heir in accordance with the terms of the Trust. Therefore probate court isn’t needed to determine what happens to it.
Does the Asset Have Another Transfer Method?
Any asset that has a method of transfer of ownership attached to it before the owner dies may not have to go to probate. An example of this is financial accounts. Many accounts for high-wealth individuals have a clause that says who the account goes to upon their death. Essentially, the way to choose the beneficiary is built into the asset, which means that the court doesn’t need to be involved in the process.
Does the Asset Have More Than One Owner?
Assets that have more than one owner may not need to go to probate court. An example of this is a house with two spouses as co-owners. If one spouse dies, the other automatically becomes the sole owner of the house. In this case, the law already determines that there is an owner of the property, so the court does not need to determine who the property goes to. The only way that this changes is if both spouses die in the same situation (i.e. car accident, etc.) and there is no named beneficiary or several possible beneficiaries that it could pass to.
Homestead Exemptions
In Florida, your primary residence is considered a “homestead”. Florida has specific laws about homesteads, including how they are handled in cases when owners pass away.
In general, homesteads are exempt from creditor claims. When a person dies and leaves behind an estate, the homestead is usually included in that estate. Anyone that you owe money to (i.e. creditors) can file claims against the estate to have what is owed to them paid out of that estate. Your homestead is exempt from creditor claims under the Florida State Constitution so creditors cannot try to take the homestead.
This also includes your primary vehicle. As long as it was used as a normal transport and is not a collector vehicle or work vehicle over 15,000 lbs. Essentially, a vehicle that you drive every day is exempt.
What Assets Must Go Through Probate?
With so many assets that can be exempt from probate, which ones must go to probate? Any asset that is a financial asset or investment must go through probate. If you own it for the purposes of retaining or growing monetary value, the court will want to see it before it is transferred.
Some of the most common assets to go to probate include:
- Stocks
- Art owned for financial value
- Collector vehicles
- Boats not used for work
- Jewelry
- Real estate that is not your primary residence
- Investment accounts
- Bonds
- Gold and precious metals
- Business investments
- Personal property worth a lot of money
If you own something that is not a necessity and has monetary value, it will likely have to go to probate.
Your Will Must Go Through Probate
Every will must go through probate. Having a will with named beneficiaries will not keep everything out of probate, but it does make the process much faster. The will must be executed, in part, by the state, unlike a trust that is automatically activated upon its issuance. It is still worth having a will even if you want to avoid probate, to make the process easier for everyone. If you have a Will, your estate usually will need to go through the Probate process, and you get to tell the world who gets your earthly belongings upon your demise. If you do not have a Will, your estate must still go through Probate, but State statutes determine who gets your property upon your death.
Get Help With Estate Planning
Despite all of these general rules on what should and should not end up in probate, you should still seek estate planning help from a licensed Florida estate planning attorney. At Handin Law, we help clients every day who need help planning, managing, and protecting their estate. Call the Law Offices of Gary I. Handin, P.A., Probate & Real Estate Attorney at 877-815-4560 or contact us online to start planning and protecting your estate today.