Probate in Florida:  Can You Avoid It?

Probate and gavel

For many of our clients, their number one goal is to avoid probate.  They may have had to go through it with a family member or heard horror stories about how long it takes and how expensive it is.   Or, they may just want to keep their affairs private and out of the court system.

When we meet with those clients, we thoroughly review their goals and options.  Our focus is always to accomplish the clients’ goals in the least complicated, most cost-effective way possible.  

1. Option One:  Avoiding Probate Through Living Trusts

One of the most common ways of avoiding probate is to establish a living trust. Most of the assets you own, including real estate, checking and savings accounts, and brokerage accounts, can be put into a living trust.

A living trust is called “living” because it can be amended by you at any point during your lifetime while you have the mental capacity to do so.  In the trust, you designate a trustee to take over upon your death or disability, and that trustee is charged with following the wishes you have outlined in your trust.  

The biggest drawback I have seen with people choosing this option is that they fail to properly fund their trust – meaning they fail or forget to retitle their assets into the name of the trust.  That means that when they die, their assets are typically administered TWICE:  once through the probate process to transfer them into the trust and AGAIN when the trust itself needs to be followed.

2. Option Two: Joint Ownership / Joint Tenancy

If you add a joint owner to a bank account or savings account or property deed, it will help you avoid probate in Florida, as long as it is apparent that the account or immovable property is owned as joint tenants with survival rights and not as common tenants.

If you are married, then in Florida, you and your spouse can own bank accounts, savings accounts, tangible personal property, and immovable property with survivor rights in a special form which is known as tenancy by the entirety.

I always caution clients when they are thinking about choosing this option, however.  Whomever you designate as joint owner has 100% rights to the money in the account.  Additionally, if that person is sued or files bankruptcy, the assets in the account may be in jeopardy.  

3. Option Three:  Transfer on Death (TOD) or Pay on Death (POD designations 

TOD and POD designations enable you to appoint one or more beneficiaries to whom your brokerage or bank account will pass on at death.  This is something you would do directly with your bank or the custodian of your brokerage/securities account.  Any assets that pass to a beneficiary as a result of a TOD or POD will be outside the probate estate and therefore avoid probate.  

If you choose this method, you must always ensure that you are keeping your beneficiary designations updated.  If a beneficiary dies before you and then you die without updating, that account will need to be probated.  When you sit down with us for your complimentary consultation, we discuss the limitations of this option thoroughly so that you can make an informed decision about your plan.

 4.  Option Four:  Enhanced Life Estate Deed – “LadyBird Deed”

For real property (such as a house or condo) you can use a special form of life estate deed called an enhanced life estate deed, also known as a “Ladybird Deed,” to maintain possession of Florida real estate throughout your lifetime and then transfer the property to the beneficiaries of your preference after you die without the need to probate the real estate property in Florida.  There are pros and cons to using this method of transfer, and we discuss these thoroughly with you in your complimentary consultation should you be interested in this tool.

For whatever option you choose, we want to make sure that you have a plan you can understand and implement.  For these options and more, call us today for a complimentary consultation.  We serve clients statewide for estate planning, probate and trust administration, and Medicaid planning.  

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