Probate is the process by which a court settles the estate of a decedent. Unfortunately, a probate case can be time-consuming and expensive. Below are some strategies to help you plan your estate to avoid the need for a probate.
Assets that are included in the probate estate:
-All the decedent’s personal and real property which he individually owns at the time of death,
- for which there is no provision for succession of ownership at death.
"Ladybird" Deed
The enhanced life estate deed, colloquially known as a “ladybird deed,” is a type of deed in which the grantor designates a beneficiary to take ownership of his property at the time of his death. Since the ownership succession takes place automatically, the property never goes through probate. Another advantage of the ladybird deed is its flexibility – the grantor can change his mind at any time and sell or convey the property to another party without the beneficiary’s consent.
Life Insurance
After the insured dies, the proceeds of a life insurance policy flow directly to the named beneficiary, thus avoiding the probate process (as long as the beneficiary is not the decedent’s estate).
Pay on Death Bank or Investment Account (aka “Totten Trust”)
The owner of the account can avoid it passing into his probate estate by providing advance written instructions to the financial institution to transfer ownership of the account to his beneficiary upon his death. The pay on death bank account was traditionally known as a Totten trust, as the bank acts as a trustee, taking on the duty to convey the owner’s wealth to his beneficiary at his death.
Property Held as Joint Tenants with Right of Survivorship
The owner of an asset can avoid the asset falling into the probate estate by making the beneficiary a joint owner of the asset while he is alive. In order to accomplish this purpose, the conveying deed would have to state that each owner takes title as a joint tenant with the right of survivorship. When the grantor dies, the joint tenant will automatically take a 100% ownership interest in the property. It is important to note that when a married couple in Florida takes title to real property, the law presumes that they are “tenants by the entireties”, which gives each spouse survivorship rights upon the death of the other spouse.
As you can see, there are many ways to title assets so that they are not subject to the probate process when the owner dies. Keep in mind that there are other considerations involved in estate planning, such as asset protection and tax planning. If you would like assistance in planning your estate, contact Clarke Law today. I offer a free twenty- minute consultation to assist you in planning for the future.