When is Probate Not Necessary?
In the press, probate has been portrayed in a negative light. People have probably listened to stories about how arduous and costly it can be. Luckily, not all property must undergo this legal procedure prior to it passing to the individual’s heirs. Therefore, he or she asks, when is probate not required? Probate is required when there is no small estate, or the property is intended to pass outside of probate. It does not matter if the individual leaves a will.
How to Avoid Probate in Florida
Probate court proceedings can be long, expensive, and perplexing. It is no wonder that most individuals act to save their families the trouble. However, different states present different methods to avoid probate. The state of Florida has some alternatives.
A person in Florida can create a living trust to avoid probate for almost any asset he or she owns like real estate, bank accounts, and vehicles. The individual must generate a trust document, which is akin to a will, designating somebody to assume responsibility as a successor trustee, a trustee after the person dies. It is important that the individual transfer property to him or herself as the trust’s trustee. When that is done, the property will be regulated by the trust’s terms. At a person’s demise, his or her successor trustee could transfer it to the trust beneficiaries without going to probate court.
If an individual owns property jointly with somebody else, and this ownership consists of the right of survivorship, then the living owner consequentially possess the property upon the other owner’s death. No probate will be required to transfer property, even though, sure enough, it will require some paperwork to indicate that title to the property is held only by the living owner. In Florida, there are two available types of joint ownership:
- Joint tenancy: Property possessed in joint tenancy consequentially goes to the living owners upon one owner’s death. No probate is required. Joint tenancy frequently functions well when married or unmarried couples buy real estate, vehicles, bank accounts, or other expensive property together. Every owner in Florida is labelled a joint tenant and must possess an equal share.
- Tenancy by the entirety: This type of joint ownership is akin to joint tenancy but is permitted in Florida just for married couples.
If Florida was a community property state, then community property would apply here. Community property is a type of property ownership held by married couples that has the right of survivorship.
Payable-on-Death (POD) Designations for Bank Accounts
A person in Florida can include a payable-on-death (POD) designation to bank accounts like savings accounts or deposit certificates. The individual can still regulate all the money in the account—his or her POD beneficiary cannot touch the money, and he or she can spend it all if he or she wants. When a person dies, the beneficiary can obtain the money directly from the bank without going to probate court.
Transfer-on-Death (TOD) Registration
Florida allows an individual to catalog stocks and bonds in the form of transfer-on-death (TOD). People usually keep brokerage accounts this way. If a person registers an account in TOD, or beneficiary, form, the beneficiary that the individual names will receive automatically receive the account when he or she dies. The person does not have to go to probate court; the beneficiary will directly handle the brokerage company to sign over the account. Florida does not permit TOD registration of vehicles.
Transfer-on-Death (TOD) Deeds for Real Estate
Florida does not permit real estate to be signed over with TOD deeds. A “Lady Bird” deed is a kind of deed available in Florida recognized as a superior life-estate deed that acts like a TOD deed. This kind of deed is uncommon.
The designated beneficiary is the individual chosen to receive an asset like a bank account or the money from a life insurance policy. When a person dies, assets with a designated beneficiary will immediately sign over to the selected individual. Choosing a beneficiary to most of the individual’s accounts simply requires completing a short form. Assets that can have a chosen beneficiary consist of:
- Bank accounts declaring a POD beneficiary
- Investment accounts mentioning a TOD beneficiary
- Life insurance citing a beneficiary other than the deceased person’s estate
- Retirement accounts
- Cars or boats registered in TOD form
A charitable trust is made during the lifetime of the grantor. It is frequently a financial planning tool, frequently giving the trustmaker or his or her designated beneficiary with lifetime earnings with the rest being donated to charity.
Basic Probate Procedures for Small Estates
Florida has a basic probate procedure for small estates. To utilize it, an executor files a request on paper with the local probate court requesting to utilize the basic procedure. The court might permit the executor to issue assets without having to undergo the complexities of routine probate.
A person can utilize the basic small estate procedure in Florida if one of the following occurs:
- The individual has no real estate, and all property is released from the claims of creditors except amounts required to pay funeral and illness costs for the last two months. The court will permit property transfer to individuals given the right to it upon a straightforward letter or application to the court. (Fla. Stat. Ann. §735.301).
- The whole estate’s value bound by administration in Florida, excluding the worth of property that is excused from the claims of creditors, does not go over $75,000, OR the decedent has been dead over two years. A petition needs to be filed with the court. This procedure is known as summary administration. Fla. Stat. Ann. §§ 735.201.
Why Not Choose Probate?
Probate can be an economical burden a person’s estate and create unrequired stress for his or her loved ones. A skilled estate planning attorney can assist the individual in drafting an estate plan that signs over his or her property without all the troubles.