When is Probate in Florida Necessary? How to Avoid Probate

Whether or not you have an estate plan in place, you have likely heard the term “probate”. Probate is the legal process by which a deceased individual’s assets are distributed under the probate court's supervision. This process is necessary to distribute assets that are titled solely in the name of the deceased person. Probate is governed by state law. The Florida Probate Code is found in Chapter 731-735, Florida Statutes. In Florida, the personal representative ("executor") of a probate estate must hire a Florida probate lawyer to assist with the probate process, except in very rare situations.

One of the appealing aspects of putting together an estate plan is to avoid probate. One way to avoid the probate process is to ensure that no assets will be titled in the decedent’s name, or providing for an automatic transfer of title, at death. Ways to accomplish this include joint tenancy with rights of survivorship, transfer - on - death (TOD) or payable - on - death (POD) beneficiaries, or the use of a revocable living trust. You can also provide for the transfer of real property through the use of life estate deeds and enhanced life estate deeds.

Joint ownership is easy to create and transfer property; however, this solution provides its own set of concerns. TOD and POD accounts can be efficient because, upon the account owner’s death, they immediately transfer the account, outside of probate, to the named recipient. They are easy (and typically free) to set up. It is important to note; however, that in this case, the account is transferred to the beneficiary outright without any creditor protection, protection against divorcing spouses, or protection in the event the beneficiary is incapacitated.

Life estate deeds and enhanced life estate deeds also present potential pitfalls. With signing and delivery of a life estate deed, the remainder interest to the property has automatically been changed, and the person transferring the real property can not "undo" the transfer, without the consent and participation of the person to whom the remainder interest was transferred. The life estate deed is also considered a gift of a present interest, based on the value of the property and the age of the person transferring the real property. Potentially significant income tax issues and gift tax issues immediately arise.

The enhanced life estate deed doesn't create any tax issues, but similar to a life estate deed, there are no protections for the individual who is receiving the remainder interest. If the named beneficiaries in the life estate deeds fail to survive the person who is making the transfer, then determining who is to receive the real estate interest can get rather complicated and convulted.

Another popular and efficient way to avoid probate is the use of a revocable living trust. If you place your assets in a trust, the trust, not you, owns the assets although you can control these assets and benefit from them as if they were yours. Accordingly, the assets do not go through probate because only property owned by the decedent goes through the probate process.

Note:  If your estate planning consists of just a last will and testament, that will document must go through the probate process. However, by using a will, you have the ability to determine who will get your assets - as opposed to letting the Florida intestacy statute or the probate court decide for you.

While there are numerous estate planning tools that can be used to avoid probate, it is not always a bad thing. A probate court can ensure that your intentions and wishes listed in your will are carried out after your passing. Additionally, the probate process guarantees all presented debts are discharged as well as any outstanding taxes on the estate. This, in turn, results in finality to the affairs of the deceased - and surviving family members. Of note, if the deceased had  outstanding debt, the probate process gives creditors only a brief window to file a claim against the estate, which could result in more debt forgiveness if there is a concern about the estate being in solvent. If a creditor's claim is not filed within the time permitted by the Probate Code, then that claim is forever barred.

That being said, there are downsides to the probate process. One such downside is the cost. Due to the filing and inventory fees imposed by the probate courts, this is an additional expense eating away at the estate. Also, the probate process can be very time consuming.The probate must be open for a minimum period of time (in many states it is four months) to permit creditors to file claims against the estate. For most uncomplicated probate estates, it will take a minimum of one year to administer. Additionally, the lack of privacy can be a concern for some families. The contents of your will, and any other documents that have to be filed with the court, will be a matter of public record. Any disgruntled family member wondering how your estate was divided up, will have the ability to get access to the documents through the probate process. Lastly, the probate process takes control away from the deceased and the family. This is because, if you do not have a will, the probate process puts the disbursement of a deceased’s assets in the hands of the court and at the mercy of Florida intestacy law.