Probate is the legal process of executing your will and distributing your possessions to your intended beneficiaries after you pass away. Probate can be a time-consuming, lengthy, and expensive process where your estate is valued, creditors make claims for payment, and the remaining assets are distributed to beneficiaries. Probate can take a few months to a few years to complete and non-exempt assets will be subject to the claims of your creditors. In the meantime, your beneficiaries don’t have access to their inheritance until probate has concluded. For this reason, many people want to know how to create an estate plan that avoids probate. With the help of an experienced Florida estate planning attorney, you can create an estate plan that avoids probate while allowing your possessions to be divided the way you desire. Learn more about these methods below:
Beneficiary Designations and Assets with “Transfer Upon Death” Clauses
One of the practical uses of a probate proceeding is to change the legal ownership of the asset from the name of the decedent to the name of the beneficiary. Assets titled in the name of the decedent on death require a court order to change the legal ownership.
Designating beneficiaries on financial assets is one of the simplest ways to pass an asset to another person without probate. These assets may be jointly titled with specified rights of survivorship or with designated beneficiaries, where the account specifies that the asset is payable or transferred on death to a specific individual, or individuals. These designations allow you to name a beneficiary or successor directly on the account. When you pass away, ownership is automatically transferred to the beneficiary you list—even if you list someone different to receive the asset in your will. No probate is needed and the assets pass free of creditors in probate. Until then, you have complete control over the asset while you’re alive, spending or saving money as desired. That’s why reviewing and updating your beneficiary designations is important to ensure your intended beneficiary receives them.
Enhanced Life Estate Deeds
Commonly called a “Lady Bird” deed, these types of real estate property deeds allow you to retain complete control over the property while you’re alive and transfer it to a designated individual after you pass away without going through probate or refinancing the home. While alive, you have complete control over the property to maintain, refinance, or sell it if desired. Florida is only one of five states that allow this type of real estate property deed.
Revocable Living Trusts
Placing your possessions in a living trust is another common way to avoid probate. When you place assets in a living trust, you designate a trustee to distribute assets to beneficiaries after you pass away. This happens automatically, without going through probate. Many types of assets can be placed inside a living trust, from the value of savings accounts to personal possessions like jewelry or artwork. You can change or modify the assets within a revocable living trust while you’re alive. You can also add or remove assets from the trust at any time.
Homestead Property
If you pass away with your home titled in your name alone, a probate order will be required to change the title to the appropriate beneficiary. However, under Florida law, your home is exempt creditors’ claims in probate. If your home is titled in your name and your spouse’s name, no probate is required. The home belongs to the widow, or widower, by operation of law. Personal belongings valued up to $20,000, such as appliances, furniture, as well as two vehicles that are regularly used, are also exempt from probate.
Gifts
A gift is the most direct way to pass assets to your beneficiaries without a will or going through probate. These assets are eliminated from your estate, so they don’t need to be included in your estate plan. Giving a financial gift to a beneficiary also reduces the overall value of your estate, which can lower probate and court costs after you pass away. You can give up to $18,000 per person a year without incurring a gift tax.
Create an Estate Plan to Avoid Probate with Peppler Law, P.A.
There are many ways to avoid probate when creating a comprehensive estate plan. Our team at Peppler Law, P.A. can help you determine what tools are best to use and help you formulate an estate plan that avoids probate. Contact us today to discuss how we can help you create an estate plan.
