5 Strategies for Minimizing or Avoiding Probate in Florida
Can You Avoid or Reduce the Time Spent in Probate in Florida?
When a person dies in Florida, their assets usually need to go through something called probate before they can be distributed to beneficiaries. You can click here to learn more about the basics of the process. Probate comes with both financial and emotional burdens and can take months or longer to complete. Probate courts are broken down by county. For example, individuals who die in St. Petersburg, Florida, would have their cases opened in the Pinellas County Circuit Court.
Each strategy below has its own strengths and weaknesses. Different combinations can be used to maximize coverage and minimize the time and money your loved ones will spend in probate. However, because of the complexities involved, it’s best to enlist a lawyer’s help when doing so.
1. Give Gifts Directly to Beneficiaries
One of the less complicated methods for avoiding probate is to give away your assets as gifts to your beneficiaries while you’re still alive. There are multiple benefits to doing so, especially when it comes to taxes. Not only can this reduce the federal estate tax burden, but so long as the gifted asset is valued under $15,000, there’s no need to file a gift tax return, either. Utilizing your annual gift exclusion or lifetime exemption on behalf of your beneficiaries does have its drawbacks, however. Somewhat obviously, you lose control over any assets that you give away, so it’s not always the best method for every situation. Gifting assets also won’t do anything to protect against creditors or angry ex-spouses with claims to the estate, either.
2. Use Transferable or Payable-on-Death Accounts
Transferable and payable-on-death accounts are another useful tool for avoiding Florida’s notorious probate courts. Transferable-on-death is the terminology used for property, while payable-on-death refers to things like bank accounts. In either case, these arrangements allow you to retain control over your assets while you’re still alive, which is especially useful when it comes to real estate. Unfortunately, this strategy isn’t ideal when planning for certain contingencies, such as divorce or an early death, that can strike when least expected.
3. Consider a Joint Tenancy
Joint tenancy with a right of survivorship is another avenue available to those planning their estates with probate in mind. However, it’s a riskier proposition than some other items on this list. In a joint tenancy, two or more parties share equal ownership in a piece of property. Because it belongs just as much to the other tenants as it does to you, that asset won’t be subject to probate proceedings when you die. This arrangement can be something of a double-edged sword because you will be held liable for any loans taken against the property, which will itself be left vulnerable to creditors.
4. Establish a Living Trust
Living trusts are perhaps your best chance at avoiding Florida’s probate courts altogether, but they are also much more complicated to set up versus a traditional will. There are many ways to structure a trust, but the two primary categories to know about are revocable living trusts and irrevocable living trusts. At their most basic, a living trust is a separate entity that you create to own assets on your behalf. Because assets placed into the trust are no longer in your name, they won’t necessarily need to go through Florida’s probate process to reach your beneficiaries. However, they must be fully funded for best results. You can learn more by checking out our Insight article here.
5. Talk to Your Family About Your Estate Plan
Finally, while not a legally enforceable strategy, it’s still important to make your end-of-life wishes known to your loved ones before you die. Talking with your friends and family about this kind of thing can be difficult. However, it cuts down on the potential for disputes and bad blood down the line. While this won’t offer you anything in the way of protection under the law, discussing your estate with your beneficiaries while you’re still alive is essential to any comprehensive estate planning strategy.
Now that you know more about how to avoid Florida’s probate process, it’s time to contact a lawyer to draft up your estate plan for optimum protection. Schedule a consultation with our St. Petersburg-based attorney by visiting our online calendar, or by calling (727) 279-5037.