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Probate and Trust Administration
"Probate” is a term
commonly used to refer to estate administration, which is the legal procedure
that may be required to retitle assets from a deceased person to that person’s
beneficiaries. It is also an optional
procedure to clear creditors’ claims where no estate administration is
otherwise necessary.
Technically, the term
“probate” refers to only one of several available options for the administration
of a deceased person’s estate. However,
before we consider the available options, the first step is to determine if an
estate administration is necessary.
Generally, in Florida an
estate administration of some sort will be required to transfer any asset
titled solely to a deceased Florida resident (or to transfer Florida real
property titled to a deceased person regardless of state of residence), which
does not have an automatic death beneficiary.
Assets that will not be subject to an estate administration, because
they either were no longer titled to the deceased person, or were automatically
retitled upon the person’s death, can include but are not limited to the
following:
- Assets
titled to a living trust
- Assets
with a TOD (Transfer on Death) or POD (Pay on Death) beneficiary
designation
- Other
assets with an individual beneficiary designation, such as retirement
accounts or life insurance policies
- Assets
titled as joint tenants with right of survivorship
- Assets
titled as tenants by the entireties (husband and wife)
- Homestead,
where the property is left to natural heirs
Some assets with beneficiary
designations must still be transferred in an estate administration, because the
beneficiary is actually the decedent’s estate instead of another individual or
individuals. This can occur because the
decedent designated his or her estate as the beneficiary specifically (not
uncommon for example with older life insurance policies, e.g. “Estate of John
Doe”), or unintentionally (for example, by failing to make a beneficiary
designation for a retirement account).
In these cases the beneficiary is the estate itself, so in order to
transfer the assets to the ultimate beneficiaries an estate administration must
be conducted.
Even if all of a decedent’s
assets pass automatically upon death to individual beneficiaries, it may still
be advisable to “probate” the estate because in a formal probate, creditors’
claims can be cut off after 90 days.
This may be desirable for estates of professionals who may have unknown
liabilities, such a physicians with potential medical malpractice claims. Without a probate, claims can be asserted
against an estate or its beneficiaries for up to two years after death.
For more information on
probate and how to avoid it, visit our blog at http://blog.profacilaw.com/profacilaw-primer-probate-in-florida/
Probate Resources:
Probate - A Process, Not a Problem
The Nightmare of Living Probate
Trust Administration - Prior Planning Prevents Problems
Self-Help Forms:
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