Estate Planning 101 – Avoiding Probate
by: Christian Fahrig, Esquire
Many clients want to avoid the probate process and ask us to assist with creating an estate plan that passes property to desired heirs outside of the probate process, without the need for court action. Depending upon the client’s wishes and the assets owned, this can frequently be accomplished. However, there are instances when going through the probate process is desired and necessary. Below are some of the strategies that are commonly implemented to avoid probate:
Joint ownership is one strategy that achieves this goal. Under joint tenancy, once one owner of the property passes away, the property passes automatically to the surviving co-owner(s). All that is usually necessary to perfect title is to provide proper notice and documentation of the death of the deceased co-owner. It is commonly known that real property can be held in joint tenancy, but Florida law also provides that financial accounts held in the name two or more people are presumed to be held with right of survivorship. (§ 655.79, Fla. Stat.)
Another option for transferring title to real property in Florida is an Enhanced Life Estate Deed, also known as a ‘Lady Bird Deed.” The Lady Bird Deed received its nickname because President Lyndon B. Johnson used this strategy to transfer property to his wife, Lady Bird Johnson. An Enhanced Life Estate deed gives the owner continued control over the property until his or her death. Once the owner dies, the property is transferred automatically to remainder beneficiaries named in the deed, without the need for probate.
Making beneficiary designations is another common strategy. Financial accounts, life insurance policies, and retirement accounts can all have named beneficiaries (commonly called Payable on Death (POD) or Transfer on Death (TOD) accounts). When a beneficiary is designated, once the institution is notified of the account holder’s death, the institution holding the account will transfer the account or distribute the account assets to the named beneficiary or beneficiaries, outside of and without the need for probate.
A final, more complex estate planning option to avoid probate is a trust. A trust is a legal agreement where one party transfers property to a second party, to be held for the benefit of one or more third parties. In a trust, the first party is called the “Grantor” or “Settlor,” the second party is called the “Trustee,” and the third party is the beneficiary. For estate planning purposes, it is possible, and common, for an individual to be the Grantor, Trustee, and a beneficiary of their trust during life. After the Grantor dies, the trust property passes to the remaining beneficiaries of the trust, outside of probate. For a trust to properly serve this function, it is important that a trust be funded; in other words, that the property be properly transferred to the Trustee to be held by and in the name of the trust.
Avoiding probate is often part of a good estate plan, but it can be complicated, and there are many options, strategies, and products to consider. The attorneys at the Elder Law Center of Kirson & Fuller can help you structure your estate plan to avoid probate, regardless of how simple or complex your estate planning needs or desires may be. We are happy to assist you. Contact the Elder Law Center of Kirson & Fuller today at 407-422-3017 and one of our experienced estate planning attorneys will assist you.