What on Earth is Probate, Really?
Probate is a court-supervised process for identifying and gathering the assets of a deceased person (the “decedent”), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries. But what does this mean in plain English?
Many people looking to create an estate plan believe that a will is enough to ensure that all of their assets are protected upon their death and that their assets will be distributed in strict compliance with the wishes they outline in their will. Unfortunately, in Florida, this simply is usually not the case and even scarier, some individuals pass away without any estate plan at all.
If an individual dies with assets titled solely in their name (a bank account, life insurance, non-homestead real estate), and that asset does not have a provision stating how it should be distributed, court intervention will be necessary to determine how to distribute those assets and a probate case will be opened. Further, if the decedent has creditors who have claims to the decedent’s assets, probate may be necessary to determine how much, if any, of the assets of the decedent’s estate the creditor can reach.
Some assets are exempt from probate in Florida. Those assets include:
- Revocable Trusts
- Transfer on Death Accounts (Stocks, Bonds, and Others)
- Joint Tenancy with Rights of Survivorship
- Tenancy By Entireties (Married Couples)
- Florida Homestead
There are two types of probate in Florida. Summary administration is a shortened version of probate for smaller estates valued under $75,000.00 when the decedent has been dead for more than two years; formal administration is used when probate is necessary, the estate of the decedent is valued over $75,000.00, and the decedent has been dead for less than two years.
Probate is not the worst process for those left behind, and sometimes it is very useful for sorting out the decedent’s assets and alleviating confusion of a decedent’s heirs regarding how to handle their estate. However, probate can be a long and expensive process, as the court and attorney’s fees are paid out of the assets of the decedent’s estate, which the decedent usually wants to go directly to family or friends. Probate can severely deplete the assets of the estate. There are ways to create an estate plan that minimize the need for probate; stay tuned to the next blog!