Florida Probate Litigation Lawyer Blog
Understanding the difference between those assets which must pass through probate and those which pass outside the probate process is essential for the proper administration of a person’s estate. Probate is the legal process by which the court oversees the marshalling of a decedent’s assets, the distribution of those assets to the decedent’s beneficiaries or heirs-at-law, and payment of any valid debts and taxes of the decedent. When a person dies with a valid Last Will and Testament (i.e., a Will executed in conformity with Florida’s “Will Act Formalities”), the court “admits” the Will to probate and authorizes distribution of any assets subject to probate to the beneficiaries identified in the Will. When a person dies without a valid Last Will and Testament, the court follows Florida’s laws of intestate (i.e., without a Will) succession and authorizes distribution of any assets subject to probate to the decedent’s heirs-at-law, which, depending on various factors, may include a surviving spouse, children, parents, siblings, etc.
Whether a probate administration is testate or intestate, a key question is always: “What assets are actually subject to probate”? In other words, what assets must be disclosed to the court and ultimately administered by the court for distribution to either the beneficiaries or heirs-at-law? In simple terms, any assets that a person dies owning solely in their own name upon their death are considered “probate assets,” or assets that must be administered by the court for distribution to the beneficiaries or heirs. For example, if a person dies owning a bank account titled solely in their own name, that is not designated as payable on death to any other person, that account must go through probate. Similarly, if someone owns an investment property (i.e., a property that is not their homestead under Florida law) in their own name on their date of death, and there are no joint owners or other interest-holders on the deed, that property likewise must go through the probate process.
However, with a strong estate plan, it is often possible to bypass the need for probate entirely. Again, those assets owned by a person solely in their own name upon their date of death must go through the probate process. But there are ways to title assets, or otherwise designate beneficiaries on those assets, in order to keep those assets out of probate. For instance, assets owned jointly with a right of survivorship do not need to go through probate upon the death of the first-to-die co-owner. As an example, if brother and sister Steven and Linda are listed as cotenants with rights of survivorship on the deed to an investment property they own together, then upon the death of Steve, his interest in the property would automatically pass to Linda the moment he dies. His interest in the property would automatically transfer to Linda by operation of his death, and there would be no need for his interest in the property to go through probate. Similarly, it is possible to designate a pay-on-death beneficiary on many types of assets, such as bank accounts and retirement accounts, such that those assets immediately pass to the designated beneficiary or beneficiaries upon a person’s death without the need to go through probate. As an example, let’s say Steve has a checking account titled in his own name with $100,000 in it, with Linda designated on the account as Steve’s pay-on-death beneficiary. Immediately upon Steve’s death, Linda has a right to claim the funds, without the account going through probate. Had Steve not designated Linda on the account as a pay-on-death beneficiary, the account otherwise would have needed to go through probate. Another common method of keeping assets out of probate is by titling them in the name of a revocable or irrevocable trust. Again, only those assets owned in someone’s own name upon their death are subject to probate; any assets properly titled to someone’s trust upon their death do NOT need to go through probate, and instead will be administered in accordance with the terms of the applicable trust.
In short, it is important to understand the difference between probate assets and non-probate assets, and how a strong estate plan may be used to help avoid the need for probate. The Miami estate attorneys at Chepenik Trushin LLP are ready, willing, and able to assist you with all of your estate planning, probate, and trust administration needs. Please give us a call today at 305-981-8889.
