Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own - your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, and personal possessions. No matter how large or how modest, everyone has an estate and something in common - you can’t take it with you when you die.
When that happens - and it is a “when” and not an “if” - you probably want to control how those things are given to the people or organizations you care most about. To ensure your wishes are carried out, you need to provide instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs.
That is estate planning in a nutshell and here we’ll discuss a few scenarios that you could encounter.
Uh Oh - No Will
Intestate refers to someone who has passed away without a legal will. When a person dies in intestacy, determining the distribution of the deceased’s assets then becomes the responsibility of a probate court. When an individual dies, his or her assets are divided among the beneficiaries listed in his or her will. In some cases, the deceased might not leave a will behand that contains instructions on how their assets should be distributed after death. When this happens, a court-appointed administrator will compile a list of the deceased person’s assets, pay any liabilities, and distribute the remaining assets to those parties deemed as beneficiaries - and some of those parties could be creditors.
A simple probate can take, in Orange County, Florida, approximately 6 months to a year and will cost approximately 5% of the total estate (this is for reasonable compensation paid to appraiser(s), accountant(s), personal representative(s), lawyer(s), etc.).
Key Takeaways
When a person’s death is intestate, it means there is no legal will.
If there is no will, the probate court determines how the assets are distributed.
An administer is appointed to manage the probate process.
A simple probate takes approximately 6 months to a year.
So, There Is A Will!
A will is a legal document created to provide instruction son how an individual’s property and custody of minor children, if any, should be handled after death. The individual expresses their wishes through the document and names a trustee or executor that they trust to fulfill their stated intentions. Depending on the estate owner’s intentions, a trust can go into effect during their lifetime (living trust) or after their death (testamentary trust).
The authenticity of a will is determined through a legal process known as probate. Probate is the first step taken in administering the estate of a deceased individual and distributing assets to the beneficiaries.
Key Takeaways
The process is similar to the above with the exception that the court will take in to consideration who you have designated as an executor or personal representative.
A simple probate will still take approximately 6 months to a year.
How Do I Avoid Probate
The role of the probate court is to make sure that the deceased person’s debts are paid and the assets are allocated to the correct beneficiaries. This process can be long, costly, and confusing to say the least. Aside from this, Florida probate records are public court records that anyone can read! So how can you avoid the probate process?
Revocable Living Trust
A Revocable Living Trust is a written agreement which covers three phases of your life:
While you’re alive and well;
If you become mentally incapacitated; and
After your death.
A Revocable Living Trust is a document created by you to manage your assets during your lifetime and to distribute the remaining assets after your death. You can make a living trust to avoid probate for virtually any asset you own - real estate, bank accounts, vehicles, and so on. You create a trust document (similar to a will), naming someone to take over as a trustee after your death (called a successor trustee), and you name your beneficiaries.
During your lifetime, the trustee (you) invests and manages the trust property. Most trust agreements allow you to withdraw money or assets from the trust at any time, and in any amount.
If you become incapacitated, the successor trustee is authorized to continue to manage your trust assets, pay your bills, and make investment decisions (this may avoid the need for a court-appointed guardian of your property).
After your death, the successor trustee is responsible for paying all claims and taxes, and then they distribute the assets to your beneficiaries as described in your trust agreement.
Then - and this is the crucial part - you must fund the trust! Think of your trust as a little red wagon, when you “fund the trust”, this means that you need to fill your little red wagon with your assets in order to insure that the assets will avoid probate after your death. You will need to transfer ownership of your property - including real estate, antiques, vehicles, investments, bank accounts, and so on - into the trust under the terms of the trust document. If any of your assets our sitting outside of your little red wagon at the time of your death, then those assets will need to go through the probate process unless they have a beneficiary designation or are owned with the rights of survivorship with someone who survives you.
There are only a limited number of ways to avoid probate in Florida. What will actually work the best for you and your family will depend on your own unique situation and should be discussed with an estate planning attorney.
Remember, estate planning is not for you - it is a gift for your loved ones so they will have peace of mind during a difficult time. Suzan Pruter of Pruter Law Group, PLLC, can provide you with the guidance for a fulfilling future. Contact them today for a quote!
Suzan L. Pruter
Suzan, whose father was a lawyer and an active member of the American Trial Lawyers Association, grew up in an environment that included lawyers, judges, and even Supreme Court Justices in California - so becoming a lawyer was in her nature. She earned her Bachelor of Arts in Communications from the University of Arizona and graduated cum laude from Florida Agricultural & Mechanical University College of Law. While in law school, Suzan was recognized by the Central Florida Bankruptcy Lawyers Association for her academic excellence in Bankruptcy Law, was the recipient of numerous book awards, and participated in Moot Court. Before finding her passion in Estate Planning, Suzan practiced as a certified legal intern in the Criminal Defense Clinic and Children’s Legal Services, however it was her own personal experience of dealing with inadequate estate planning that fueled her passion to where she is today.
