A Trusted Probate Attorney’s Advice on Avoiding Probate
Probate is the legal process by which a deceased person’s estate is administered, including the settling of debts and the distribution of assets. All wills must be probated. However, even if a person dies without a Will, which is called dying intestate, if the deceased had assets in his or her own name, a Probate of the estate is still required. Since probate proceedings must take place before a court of law, a probate attorney is usually contracted to advise the executors (personal representatives) of the deceased’s estate. In Florida, the law requires that an attorney represent the personal representative of the estate, unless the personal representative is the sole interested person.
Why would you want to avoid probate?
Probate can be a costly, lengthy process, and while probate attorneys do their best to ensure that the financial affairs of the deceased are settled as quickly as possible, unforeseen difficulties and legal disputes may arise. Furthermore, because the deceased’s assets are tied up until the completion of probate, relatives or dependents who desperately need to access the finances of the deceased estate are unable to do so. Probate proceedings are also a matter of public record, so anybody’s probate file can be viewed in the records office. Thankfully, if you want to save your loved ones the hassle of the probate process upon your death, there are a number of ways in which you can avoid probate proceedings.
Living trusts are an incredibly useful tool for avoiding probate. Upon the creation of a living trust, your assets are transferred to the Grantor or Trustor of the Trust (the person creating the Trust) and you, as Trustor or Grantor will need to state how you the wish the trust property to be allocated to the trust beneficiaries upon your death, as well as appoint a successor trustee, who will be responsible for the administration of the trust on your death. It is vital to remember that a living trust will only avoid probate if you have legally transferred your assets to the trust by the time of death. This is known as “funding” the trust. If your assets are not titled in the name of your trust, they will remain part of your estate and will need to be probated.
If an asset is held in joint ownership which includes the right of survivorship, then upon the death of one owner, the surviving owner becomes the automatic sole owner of the asset, and no probate is necessary. In Florida, two forms of joint ownership are relevant: joint tenancy and tenancy by the entireties. Joint tenancy applies whenever two people acquire an asset together in equal shares – such as a house, vehicle, or bank account with a right of survivorship. Tenancy by the entireties applies ONLY to married couples, but works in a similar way to joint tenancy. Bear in mind that adding a joint owner to a bank account or real estate may be classified as a taxable gift which needs to be reported.
Payable-on-death (POD) and Transferrable-on-death (TOD) registrations
In Florida, you can add a POD designation to certain bank accounts, which will allow the POD beneficiary to claim the money from the account directly from the bank upon your death. Stocks and bonds may also be registered in TOD form, which allows you to appoint a beneficiary who may claim the stocks on your death. Florida law does not permit TOD registrations for real estate. However, an enhanced life estate deed or “Ladybird Deed” may be used. A Ladybird Deed allows you retain your real estate during your lifetime and then have it pass on automatically to an elected beneficiary upon your death, without needing to probate.
Avoiding probate can be complicated, and will depend on the nature of your assets. If you wish to avoid probate, consider consulting an estate planning or probate attorney for advice to ensure that your efforts to avoid probate do not result in any costly mistakes.