Tips to Understand Probate in Florida
Any asset owned by a deceased person can be a Probate Asset especially if a particular asset has no way of passing ownership to a living beneficiary automatically. If an asset doesn’t pass automatically – usually done with a beneficiary designation such as with Life Insurance – is can’t be passed without the court’s Probate process. Other examples of assets that may pass without or outside of probate include: Life insurance proceeds, bank accounts with payable-on-death (POD) designations, IRAs and some real estate. Passing automatically is commonly stated as “passing by operation of law”. All the other assets of a decedent are part of the decedent’s probate estate and becoming probate assets. The probate estate is subject to a court supervised proceeding to transfer ownership from the decedent to his or her rightful heirs and beneficiaries.
Here is a list of four common types of probate assets.
1) INDIVIDUAL ASSETS
This group of assets includes all property, real or personal, titled in the decedent’s sole name without co-owners or POD (payable-on-death) and all types of beneficiary designations. Such as: checking/savings bank accounts, investor accounts, stocks, futures, bonds, businesses, vehicles, boats, airplanes, some dogs/horses/birds, and real estate. This list may also include personal assets such as art, jewelry, furnishings, figurines, photographs, and historical items.
2) REAL PROPERTY HELD AS TENANTS-IN-COMMON
Real estate/Real property can be owned as a tenant-in-common asset. This category includes any property with the title listing the decedent’s name using “tenant in common” along with one or more other persons. With this type of ownership interest each of the owners owns a particular percentage in the property. (i.e. 60 percent and 40 percent, or 50/50 equal shares). Real estate is often titled as tenants in common for unmarried owners. Other assets are held this way such as investment accounts, stocks/bonds, cars, RVs, checking/savings accounts and others. Do not confuse tenants in common with “joint tenants”, “tenants by the entirety”, or other ownership arrangements providing for a right of survivorship. (Note: Property held with a “right of survivorship” will pass directly to the surviving owner(s) when one owner passes away. This property does not require probate and is not part of a decedent’s probate estate.)
3) ASSETS ASSIGNED A BENEFICIARY BUT NO LIVING BENEFICIARIES OR NO BENEFICIARY DESIGNATION AT ALL
Assets that were assigned a beneficiary or POD/payable-on-death designation can become part of a probate estate –IF- all of the beneficiaries predecease. Different assets can fall into this category such as life estates (in real property), life insurance, IRA/401k style accounts and health savings or medical savings accounts. If all the named beneficiaries pass away before the account owner that particular asset will pay into the probate. This is also true when the asset has no beneficiary designation at all.
4) NON-TRUST ASSETS (or “Ooops, I forgot to change the title!”)
Sometimes a very conscientious person will go to great lengths to create a trust but fail to properly transfer or assign the assets to the trust. In a worst case scenario, the trust might be void if it is empty. Maybe there are just a few assets that were not transferred to the trust like a car or an expensive watch. Those assets are subject to probate. Review your trust and your assets each year to ensure all the assets you acquired recently have been titled for ownership in the manner which you need it to be titled.
Call one of the experienced Florida Probate Attorneys at Mario, Gunde, Peters, Rhoden & Kelley, LLC. for a complimentary consultation by phone or in person to discuss your questions about the Florida Probate Process or Trusts in Florida. 321-631-0506 offices in Melbourne and Cocoa.