NON-PROBATE ASSETS VS. ESTATE ASSETS UNDER FLORIDA PROBATE LAW

“Probate” is how a recently deceased property owner’s assets are distributed to beneficiaries. Property subject to probate is generally distributed in accordance with the deceased’s last will and testament if a valid one exists; otherwise it is distributed according to Florida’s intestacy laws. In most cases, not all of a decedent’s property is subject to probate; and in some cases none of it is.

If you die with most of your assets in probate, your beneficiaries may have a long wait ahead of them, because they cannot receive their distributions until the probate court releases them — which could be years under a worst-case scenario. To create an effective estate plan, you need to understand the difference between probate and non-probate assets.

Probate Assets

Some typical examples of probate assets include:

• Real property that you own solely in your own name or as tenant in common;
• Personal property — furniture, automobiles, jewelry. etc.;
• Bank accounts in your name only;
• Shares in a corporation;
• Shares in a partnership or LLC;
• Copyrights or patents held in your own name; and
• A life insurance policy for which you or your estate is listed as sole beneficiary.

Non-Probate Assets

Non-probate assets are usually assets that can be transferred without the supervision of the probate court. Your last will and testament does not control the distribution of these assets — instead, these assets are distributed directly to your named beneficiaries shortly after you die and almost certainly before probate procedures have been completed. Following are some examples.:

• Property in joint tenancy or tenancy by the entirety (typically real estate);
• Bank accounts in joint tenancy or “payable on death” terms for the benefit of named beneficiaries.
• Trust assets, including the assets of a revocable living trust (since even a revocab;le living trust becomes irrevocable as soon as you die);
• Life insurance policies that name someone else (not you) as the primary beneficiary; and.
• Retirement accounts such as IRAs.

Unintended Consequences

It is generally a good idea to move as much of your property as you can outside of the jurisdiction of probate before you die. Nevertheless, there are certain risks in doing so — especially if you plan unwisely:

• Suppose you own a joint bank account with your son. You intend for your son to share these funds with your other children after you die. In this scenario, you are relying on trust — your son will have no legal obligation to share the money, regardless of the terms of your will.
• Creditors can seize certain types of joint assets, such as money in a joint bank account, to satisfy the debts of the other joint owner — even before you die.

Contact Lorenzo Law Today

Jose Lorenzo is a Florida estate planning and probate lawyer with a strong track record of success. Our firm maintains offices in Coral Gables and Ft. Lauderdale, and we serve clients throughout Florida. We can be reached by phone at (305) 999-5411, through our online intake form, by email at [email protected] or by visiting one of our offices.