Estate Planning for Florida Residents: Avoiding Probate
The probate process can be expensive, time-consuming, and emotionally draining. Fortunately, estate planning involves setting up probate avoidance safeguards. Read on to learn what legal instruments can help your assets and heirs stay clear of probate.
What Is Probate?
Probate is a legal procedure that may take place after you pass away. During this process, a probate court will appoint someone to review your assets and distribute them among your heirs. If you owe any debts during your lifetime, the court will verify that your attorney has taken the necessary actions to notify your creditors, who will be able to file claims and recover the money owed from your probate estate.
Why Would You Want To Avoid Probate?
Depending on the size of your estate, the number of creditors, and any disagreements among your family members, the probate process can take months or even years. During that time, your heirs won’t be able to access their inheritance. Expenses such as attorney fees will also pile up.
Privacy can be a concern as well. Probate is a public process, meaning anyone can access the court records and find out details about your probate estate and related matters.
4 Ways To Avoid Probate in Florida
Any assets that you own solely in your name are subject to probate. To avoid probate, you must use legal instruments that allow you to own assets in alternative ways.
1. Revocable Living Trust
A popular way to avoid probate is to transfer the title to your assets to a living trust. You can name yourself as both the trustee responsible for managing the trust and the sole beneficiary while you are alive. If the trust is a revocable living trust, you can amend or revoke it during your lifetime.
The terms of the trust are laid out in a legal document called a trust agreement. In it, you must also name a successor trustee and successor beneficiaries after your death.
2. Enhanced Life Estate Deed
With an enhanced life estate deed, sometimes known as a lady bird deed, you can transfer the title to real estate to your future beneficiaries while reserving the right to occupy and control the property during your lifetime. While this has been a good tool for probate avoidance in certain cases, we have seen an increase in issues and problems with these deeds when clients sell their homes. It’s a popular (and seemingly inexpensive) method, but it’s no longer the best plan for many people.
3. Joint Tenants With Rights of Survivorship (JTWROS)
You and one more person — usually your spouse — can own real estate or personal property together as JTWROS. Both of you are on the legal title and share ownership while you are alive. After one of you passes away, the title automatically passes to the surviving spouse.
4. Beneficiary Accounts
Another way to avoid probate is to name one or more beneficiaries who will inherit your financial accounts after your death. You can do this by designating eligible accounts as “payable on death” (POD) or “transfer on death” (TOD). Examples include:
- Bank accounts
- Life insurance policies
- Retirement plans, such as IRAs and 401(K) retirement accounts.
Talk to a Florida Estate Planning Attorney
Estate planning shouldn’t be stressful. Our experienced team at the Law Office of Amy L. Phillips, PLLC, can assist you with all your estate planning needs, including probate avoidance. Contact us today for a confidential consultation.