There are certain situations where probate is necessary in Florida. One example is when a person dies without a will, called “intestate.” When a person passes away without a named beneficiary or a will, the probate process helps determine who should inherit their assets. However, probate proceedings can be time-consuming and complicated, so it is beneficial to develop a comprehensive estate plan to avoid probate. Here are the top estate planning tools you can use to avoid probate.
Create a will
One of the best ways to avoid probate is to have a will. If you die without a will, Florida’s intestacy laws will determine who will inherit your assets. Having a will is the best way to communicate your final wishes to your family about how you would like your estate to be handled. If you have a will, it may cut down on your family’s time in probate. A will also creates less confusion over how your assets will be divided.
Name beneficiaries on assets
Assets with a named beneficiary or successor do not need to go through probate. Once you pass away, these assets will transfer ownership to the person named on the asset. The most common examples include 401k plans, life insurance policies, bank accounts, real property, and IRAs. These types of assets are referred to as “payable on death” (POD) or “transfer on death” (TOD) accounts. If you can add a beneficiary or successor on any of your assets, it is wise to name one to avoid probate.
Joint ownership with rights of survivorship
Assets you jointly own with someone else do not go through the probate process, such as a home or other real property where two people are named on the deed. Once you pass away, the other person named on the paperwork will be entitled to the asset. You will need to ensure that the asset includes a “rights of survivorship” clause, which means that when one party dies, the asset will go to the other person on the account. Marital assets, such as homes and joint bank accounts, often fall into this category.
Lady Bird deeds
An enhanced life estate deed, or “Lady Bird deed,” is another way to transfer real property after you pass away that avoids probate. With a Lady Bird deed, an owner controls property until their passing. Then the deed is transferred to a designated person upon death. This type of deed will ensure that some of your most significant assets do not need to go through probate.
Living trusts
One of the most common tools to avoid probate is a living trust. With a living trust, assets automatically transfer from the trustor to the beneficiary upon death. Items placed within a trust do not need to go through probate. Instead, a trustee is in charge of distributing the assets. Many assets can be placed in a trust, such as funds for funeral expenses, stocks, bonds, safe deposit boxes, and bank accounts. If you choose to create a revocable trust, you can change or modify the items within the trust throughout your life. If the trust is irrevocable, it cannot be modified after creation.
Gifts
Gifts are another tool that can be used to avoid probate. Gifts are entirely removed from your estate, so they will not be part of probate. You can gift assets to a family member, individual, or organization. Gifting your assets lowers your estate worth, possibly reducing the time and cost of probate proceedings. Note that if you gift an amount over $16,000 in any given year, you will be subject to pay a gift tax and must file a form with the IRS.
Estate planning with Brian W. Hurd
The Law Office of Brian W. Hurd helps residents throughout Merritt Island with all their estate planning needs. We will discuss the factors of your estate to determine which tools are best for your situation to avoid probate. Call our office at 321-453-5007 to set up a consultation with our team to discuss your estate.
