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Saving Your Loved Ones’ Time, Money and Stress: Four Important Asset Categories

On Behalf of | Oct 31, 2016 | Elder Law, Estate Planning |

When a person dies resident in Florida, there are four basic categories into which each of their assets or properties fall. Experienced estate and probate attorneys know that where an asset falls among these categories will determine what action must be taken to administer or dispose of that asset. The action which must be taken will in turn impact the time, expense and stress caused in administering and transferring each asset. If you do not mind significant time delays, paying lawyers and being stressed, then this blog entry is not for you.

First Category-Survivorship Property. These are assets owned jointly by the decedent and other parties as survivorship property. Such property will often have the phrase “Joint Tenants with Right of Survivorship” or “JTWROS” in the title. This type of property passes directly to the survivor by operation of law. In other words, it does not go through probate and it is not impacted by a trust. The only thing we recommend doing when this type of property is involved–if the property is real estate–is to record the death certificate of the decedent in the public records of the county where the property is located. Doing this will evidence the fact that survivor now owns the real property. If the asset is a bank account–which usually have a survivorship provision–then the survivor may want to present a death certificate to the bank.

Second Category-Beneficiary Named or Pay-on-Death Designated. Assets in this second category have a beneficiary named or a “pay on death” (“POD”) designation. These assets may include life insurance, IRA’s, 401K’s, or financial accounts if they have a POD designation. With assets in the second category, steps will need to be taken to fill out and submit beneficiary or POD claim forms.

Third Category-Assets Already in a Trust. Assets in the third category are already in a revocable or living trust. As a result, these assets are already under the control of the trustee and do not require probate. However, there are some administrative steps the trustee must take–particularly with financial accounts already in the Trust. One step involves getting the successor trustee added onto the account–since the decedent was likely the trustee and, now that he or she is deceased, is being replaced by a successor trustee. Also, the trustee must get a Tax Id. number for the Trust and associate that number with each financial account held in the Trust. This must be done since the deceased grantor’s Social Security number can no longer be used by the Trust.

Fourth Category-Assets Solely in Decedent’s Name. Assets in the fourth category are those titled only in a deceased person’s name with no beneficiary and no POD designation. For these assets, a probate will need to be opened in order to allow transfer (or sale) of these assets. Most people who’ve had dealings with Florida probate will agree that it should be avoided if at all possible. Probate is slow (often taking over a year), expensive (you have to hire and pay a lawyer!) and stressful (there are deadlines, filings, hearings, etc.).

As estate planning attorneys, we assist clients in structuring their property ownership and their estate documents so that as little as possible–and preferably NONE–of their assets fall into the fourth category requiring probate.


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