What is Probate All About?
Probate is a word that scares people. In general, probate is necessary in Florida when a person dies owning any type of property (real estate, stocks, bank accounts, etc.) in his or her name alone without any named beneficiaries. For example, if a husband and wife have a joint bank account and one of them passes away, there will be no probate necessary because the survivor still owns the 1account. However, if the survivor then passes away and has not named a beneficiary on the account, that asset would have to be probated. A bank will allow you to designate beneficiaries with a form called “payable on death,” “transfer on death,” or “in trust for.” Similarly, if a person has a brokerage account either in joint names or with a named beneficiary, that account will not have to be probated but will go automatically to the beneficiary upon the death of the account holder. Therefore, it is possible to avoid probate on most assets by simply designating beneficiaries.
However, with real estate, it is not so easy. It is generally not advisable (for legal and tax reasons) to add children’s names to a Deed. If a home is owned jointly by a husband and wife and they both die, their heirs will most likely need to go through the probate process. This can be avoided if the property is owned through a Revocable Living Trust.
Probate in Florida takes about six to nine months. It involves filing the original Will and preparing initial pleadings requesting that the Court appoint the Personal Representative designated in the Will in a court Order called “Letters of Administration.” Once the Letters of Administration are issued, it is required that there be a publication in the newspaper, primarily so that any creditors can put in a claim against the Estate. This would include credit card debt, unpaid hospital and doctor bills, unpaid funeral expenses, etc. Florida law requires that no assets can be distributed for the first ninety days from the date of first publication. If the only asset that is being probated is the home of the deceased, the Court can be petitioned to declare the property homestead, thereby exempting it from claims of creditors.
Florida Law entitles an attorney to charge up to 3% of the gross value of the assets that are being probated. A lawyer can charge less than the 3% but not more if the fee is based on a percentage. Lawyers can also charge an hourly rate if the client (the Personal Representative of the Estate) agrees to substitute the hourly rate for the percentage. However, it is definitely preferable under most circumstances to agree to a specific percentage, which may be negotiated below the 3%, so that there is a flat fee as opposed to an unlimited ceiling for an hourly rate.
The entire probate process can be avoided by creating a Revocable Trust and transferring via a Quit Claim Deed any real estate owned in Florida (or other states) to the person as Trustee of the Trust.
This article summarizes some of the general aspects of the probate process and avoiding it with a Revocable Living Trust. I offer a free consultation for all matters regarding Wills, Trusts, Probate and Estates. Please feel free to contact me at 954-569-4878 or 954-977-4878.
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