How to Avoid Probate
In Florida there are many ways to avoid probate, such as joint ownership of assets with rights of survivorship, beneficiary account designations such as transfer on death or payable on death designations, lady bird deeds, and living trusts. Each method has it owns pros and cons so you should consult an attorney for estate planning.
Owning property (whether it be a bank account or real property) with another person or multiple people can avoid probate if the property owners have a right of survivorship. Thus, if A, B, and C own property together with a right of survivorship and A dies, the property will automatically go to B and C. No Court process is necessary for this to happen. However, if the property is not owned with a right of survivorship, then a probate of the deceased property owner would be necessary. Thus, if A, B and C own property but do not have a right of survivorship, and A dies; A’s share of the property will need to be probated. This can cause potential problems with unintended owners, for instance, B and C might not want to own property with the heirs of A. Additionally, owning property with other people can expose that property to the creditors of those joint owners. Thus, if A owes a creditor, its possible that A’s creditors can look to A’s share in the joint property. Jointly owned property as a married couple, formally referred to as tenancy by the entirety, can add an additional layer of protection, but only a married couple can utilize this type of ownership. Thus, if A and B are married, a creditor of A cannot seek to attach to the property of A and B if they own that property as tenants by the entirety.
Beneficiary Accounts, Pay of Death Accounts, and Transfer on Death Accounts
Most financial accounts, such as checking accounts, saving accounts, brokerage accounts, individual retirement accounts, certificates of deposit and even treasury bond accounts, will allow the owner to designate an individual or entity to inherit the account upon the account holder’s death. The financial institution typically will have an internal form that you can fill out stating where you want the funds to go upon your death. Upon your death the financial institution will transfer the assets to the person or entity you chose. One should be careful about designating a minor or someone who receives public assistance benefits. Additionally, there could be potential problem if your designated beneficiary dies before you.
Lady Bird Deeds of Enhanced Life Estate Deeds
This type of deed acts as a transfer on death designation for real property. This type of deed transfers real property to a beneficiary but reserves onto the grantor the right to control the property during the grantor’s lifetime. Not all states recognize this type of conveyance. This can be an effective to transfer real property at your death and avoid probate. However, you should be careful if your intended beneficiary is a minor. Additionally, you may want to designate more then one person which could lead to potential issues should one or more your intended recipients dies before you.
Living Trusts, Revocable Trusts, and Grantor Trusts
Living trusts, revocable trusts, and grantor trusts are all synonymous and are often used to avoid probate. This type of trust is setup during the settlor’s lifetime by establishing and executing a trust agreement. Usually, the settlor is the sole beneficiary while the settlor is alive and upon death the settlor can designate where his or her property should go. Assets of the trust will automatically pass to the named beneficiaries upon the death of the settlor subject any limitations set up by the settlor. This is considered a private contract and the assets of a trust are not subject to probate. You should make sure your trust is properly funded, otherwise, your family might still have to go through probate.
The probate and estate planning division of Phillip’s, Hunt, Walker & Hanna is able to help you with probate.
The law offices of Phillip’s, Hunt, Walker & Hanna are located at 212 North Laura Street, Jacksonville, Florida 32202. You can submit a free case evaluation online at Floridajustice.com or over the phone at (904) 444-4444.
This blog post published by Phillips, Hunt, Walker & Hanna is for informational purposes only and is not considered legal advice on any subject matter. For legal advice, please contact a licensed attorney.