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One of the biggest assumptions that Florida residents make about their wills is that their loved ones won’t have to deal with probate court. Sadly, this is not accurate. A last will and testament serves one primary purpose: to direct the court on how to probate your assets. It accomplishes this by naming your beneficiaries and the representative you want to oversee your estate when you have died.
Because wills have to go through probate court, your loved ones will have to navigate this complex and costly process. This is not something anyone wants for their surviving family members to go through. Below are the best methods of avoiding probate altogether:
Living trusts are one of the more popular methods of avoiding a lengthy Florida probate process. This type of estate planning tool can cover any asset you own and names a trustee to manage your assets after you pass away. Their job will be to distribute your property to those you designated as beneficiaries. An experienced estate planning firm like the law offices of Marc Brown, P.A., can assist you in creating a living trust and ensure it complies with state law.
Another option to ensure your assets go directly to your loved ones and avoid probate court is to use payable-on-death clauses for your financial accounts. This is a popular method for getting bank accounts and certificates of deposits in the right hands when you die. Plus, you retain complete control over this money until then.
If you want to pass your real property (bank accounts, homes, cars, etc.) on to a designated beneficiary when you pass away, you can title these jointly. Known as Joint Title with Rights of Survivorship, the surviving owner will automatically own the asset and avoid going through probate to have ownership transferred to them.
Keep in mind that there are two types of joint ownership in Florida. The first we just described can be set up between anyone, regardless of their relationship. The other type is a joint title in entirety which is exclusive to married couples.
Much like payable-on-death clauses, using transfer-on-death designations for stocks, mutual funds, and other brokerage accounts will transfer ownership to a designated beneficiary when the original owner dies.
While you can do many of these options on your own, there are consequences to consider before doing so. For instance, if you decide to roll your 401(k) into a new IRA, your current beneficiary designations won’t go with it automatically. Instead, you’ll need to set them up all over again.
It would help if you also considered what happens to your assets should one of your heirs dies before you do. Should their share be split evenly among your other designations, or do you want a clause in place to pass their portion to their own children?
Also, never leave an inheritance directly to minors. This will trigger a lengthy process where the court will need to appoint a guardian to manage these assets until the child(ren) turn 18 years old. Instead, consider creating trusts that can payout to them when they are of legal age or after certain milestones have been reached in their lives (graduated college, had their first child, etc.).
Finally, if you have a loved one with special needs, don’t transfer property to them directly. For many individuals with disabilities, government benefit programs help sustain their care, and any direct influx of money or other valuable assets can disrupt their eligibility. Work with a knowledgeable attorney who can set up a supplemental or special needs trust to protect their benefits.
Because probate is a court process, it takes time to settle and close an estate. So even though a will can designate beneficiaries and how your assets will get distributed, your loved ones will have to go through this lengthy process. Plus, state law requires families to hire a probate lawyer to help them manage their case, which puts a financial burden on their lives.
The law offices of Marc Brown, P.A., in southern Florida can provide you with reputable estate planning advice to help you and your family avoid probate altogether when you die. Contact our office today to schedule a free consultation to discuss your estate goals and what options would best suit your needs.
