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What Assets Are Exempt from Probate?

One of the most common questions we’re asked when creating estate plans is how to avoid probate. Probate can be time-consuming, complex, and expensive, so it’s reasonable that you want to do everything you can to avoid having your property, financial accounts, and personal possessions go through this process after you pass away. Fortunately, only certain types of possessions need to go through probate. Here are the types of assets that are exempt from Florida probate:

Accounts with Beneficiary Designations 

Accounts with beneficiary designations allow you to name a successor for the account’s ownership. Beneficiaries on these accounts are automatically given ownership after you pass away without going through probate. Beneficiary designations are prioritized over what’s listed in your will, so it’s important to ensure they match. Examples of assets with beneficiary designations include: 

  • Life insurance policies
  • IRAs
  • CDs
  • Savings bonds
  • Investment accounts
  • Checking and savings accounts
  • Annuities
  • 401(k) plans

Jointly Owned Bank Accounts 

Bank accounts, real property, or other assets co-owned with another person won’t go through probate. The other person listed as the co-owner will take full ownership of the asset (as long as they’re still alive). One common example is a joint savings bank account with multiple people listed on the account. The surviving owner becomes the sole owner of the asset if one owner passes away. 

Assets with Rights of Survivorship Clauses 

Assets with rights of survivorship clauses don’t go through probate. These assets are jointly owned by someone else and have “payable upon death” or “transfer upon death” clauses. The asset’s ownership is automatically transferred to the next owner when you pass away.  

Homestead Property 

Your familial home won’t need to go through probate if your surviving spouse or minor children still live there. According to Florida Statute 732.402, household appliances, furniture, and other home-related items totaling up to $20,000 in value are also exempt from probate. Up to two vehicles the family owns and uses regularly are also exempt from probate. 

Trusts 

One effective way to avoid probate is to create a living trust. With a living trust, assets transfer automatically from the trustor to named beneficiaries upon death. Assets placed in a trust don’t go through probate. Instead, a trustee is responsible for distributing the assets to named beneficiaries directly. Many types of assets can be placed in a trust, including stocks, bonds, safe deposit boxes, and bank accounts. If you create a revocable trust, you can change the items in it during your lifetime. If the trust is irrevocable, it cannot be modified after it is created. Another benefit to creating a trust is that it cannot be contested in probate court. 

Gifts 

Gifts to family members before you pass away are no longer part of your estate and won’t be part of probate proceedings. For this reason, you may choose to give a gift before passing away to avoid probate. You can also lower the total value of your estate this way, which may allow you to file for summary administration if other conditions are met. You must pay a gift tax if you give more than $18,000 in a single year. Seek the guidance of an Orlando estate planning attorney to avoid tax implications and determine your Medicaid eligibility.

Peppler Law: Orlando Estate Planning Attorney

Probate is complicated and complex. An Orlando estate planning attorney like Thomas R. Peppler can help you develop your estate plan and use specific tools to avoid probate. Our office can assist you with all your estate planning needs, including creating an estate plan that avoids probate. Contact us today to get started.

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