The probate court process can be a significant hassle for the beneficiaries of a deceased’s estate. The cost, time, and complexities associated with the legal requirements and procedures place additional burdens on grieving loved ones, which is why avoiding probate is at the forefront of many estate planning discussions. If you are looking ahead to the inevitable future and trying to create a plan that will suit your wishes and your family’s needs, consider implementing options to help your estate avoid probate.
Avoiding Florida Probate
The assets and belongings you’ve acquired or will acquire over your lifetime hold more than just monetary value. Sentimental value is also strong motivator for who you leave your assets to, and both of these elements usually factor into estate planning decisions. Understanding the options available to you and how each will impact your assets and loved ones down the road is crucial to successful estate planning.
The Florida statutes outline the requirements for probate and detail how the court process generally takes place. However, there are estate planning mechanisms that effectively prevent an estate from having to go through probate. To avoid the lengthy and costly Florida probate process, you must be strategic and intentional with your estate plan. Probate serves an essential purpose of transferring assets to your heirs, but the same or similar goals can often be accomplished in a better way. In Florida, you have a few choices for avoiding probate, all of which are suited for specific scenarios.
Joint Tenancy with Rights of Survivorship
If you own real or personal property and another person is named as a joint owner with rights of survivorship, the other person will automatically become the sole owner upon your death and probate is avoided. You can also have more than two people hold title jointly with rights of survivorship.
Spouses commonly hold title together, and this is a beneficial way for many marital assets to avoid probate in Florida. When a married couple has joint ownership, this is called a tenancy be the entirety. If either spouse dies, the surviving spouse becomes the 100% owner of the property without the need for probate. These assets are often exempt from creditor claims of the one spouse or person on title.
Joint tenancy with rights of survivorship is often used to pass property down to a specific beneficiary without going through the Florida probate process. Many people choose to list their adult children as joint owners with rights of survivorship so the property will automatically transfer to their chosen heirs when they pass away, and the estate can avoid probate.
The way to form a joint tenancy with rights of survivorship for Florida real estate is through a deed transfer. This should be done by an experienced Florida licensed real estate attorney so that all deed formalities are followed and the correct language to effectuate the joint tenancy is included.
Many financial institutions allow the designation of a beneficiary who will receive the assets contained in the account upon the death of the account holder. This avoids probate because the beneficiary has already been chosen and listed by the decedent before they passed, which means there is no reason for the probate court to consider this asset during estate administration. These types of accounts are called “payable on death” or “transfer on death.”
There are some drawbacks to this option, however. Beneficiary accounts are not generally protected from creditors. Additionally, the money in these types of accounts cannot be used to cover funeral or trust administration costs.
Retirement accounts, such as IRAs and 401(k)s, often include a payable on death beneficiary. Your bank or other financial institution likely offers this option as well. Having a joint account holder also often avoids probate.
Lady Bird Deeds
A lady bird deed, or enhanced life estate deed, transfers real estate upon your death while also allowing you to continue to control the property during your lifetime. This option is only available in five states, one of which is Florida. Utilizing a lady bird deed allows you to avoid probate in Florida because your beneficiary automatically inherits the property, making it exempt from probate proceedings.
Another benefit of the lady bird deed is that the life estate holder has full control of the property during their lifetime and can mortgage, lease, or sell the property without the consent of the future interest holders (as opposed to a regular life estate deed, which does require the consent of the future interest holders).
A deed transfer is required to create a lady bird deed (enhanced life estate deed). This type of deed should be prepared with the assistance of an experienced Florida real estate attorney, as there are many nuances involved.
One of the most well-known and universally beneficial options for avoiding probate is a living trust. You can establish a living trust to hold your assets and pass them on to your heirs or beneficiaries. Living trusts also offer privacy, as they are not filed with the court and do not become public record. Most assets can be placed in a trust, including real estate, vehicles, intellectual property, and financial accounts.
Contact Farshchian Law Today for Estate Planning Assistance
If you want to create a plan that avoids the Florida probate court process and the associated stress for your loved ones, we can help you accomplish your goals. To schedule a free consultation, call us at (305) 901-5628 or (239) 935-8599, or email us at Info@JFRealEstateLaw.com.