In Florida, probate is a court proceeding where the estate of a deceased person is administered and distributed to the decedent’s beneficiaries. Typically, filing probate involves hiring an attorney who prepares certain required paperwork which is then signed and filed with the probate court. Because an attorney is usually required and because a court oversees the administration of the probate, the process can be expensive and slow. It is bad enough that your loved ones have lost a family member but then they have to deal with an attorney, a court and the legal process. Probate can be stressful and frustrating. Understanding these realities of probate, most people agree that avoiding probate is a worthwhile objective when planning for the future. So how do you avoid probate?
One of the first steps is to assess what types of assets you own. This would include real property, financial and retirement accounts, life insurance, business interests, etc. After assessing what you own, you need to ask, how do these assets pass upon your death? In other words, how do they get transferred out of your name and into that of your beneficiaries? The answer will vary depending on the type of asset.
For example, with real property, whether it involves your primary residence or a rental or vacation home, the single best way to pass this property along is by establishing a revocable trust (also known as a living trust). Once the Trust is set up, your real property can be re-titled in the name of the Trust. While you’re alive, you own the property and can do anything you want with it. You can live in it, rent it, sell it, etc. However, when you die, because the property is already in the Trust, it does not have to go through probate. The Trustee of your Trust, who you select, will be able to sell or transfer the property according to your instructions. No probate court need be involved.
With assets other than real property, such as financial or retirement accounts or life insurance, you can avoid probate by naming a beneficiary or pay-on-death designee. So long as the beneficiary or designee is living at the time of your death, those assets pass without probate. Where most people run into a problem with these types of assets is that they either do not have a beneficiary named or they fail to list a contingent or “back-up” beneficiary. So, if the primary beneficiary dies first, the assets will end up in probate unless you name a contingent beneficiary.
In today’s age of “do-it-yourself” remedies, some people try to do their estate planning themselves. Doing so lacks the advice and counsel that an experienced estate planning attorney can give. The do-it-yourselfers often fail to set things up or if they do set them up, they unknowingly do it wrong. Seeking good estate planning counsel is worth the extra effort and cost. Your family and loved ones will appreciate your doing things the right way.