Comprehensive estate planning encompasses much more than simply deciding who will receive which assets when you die and then reducing those decisions to writing in the form of a Last Will and Testament. For most people, estate planning involves a number of additional, yet related, goals and objectives as well. One of the most common of those goals is probate avoidance. Avoiding probate, however, requires careful planning. By incorporating probate avoidance strategies into your estate plan though, you will save your loved ones a considerable amount of time and frustration as well as likely save your estate a significant amount of money – money that can be better used providing for your loved ones after you are gone.
Understanding the Probate Process in Florida
In order to understand why avoiding probate is such a common goal, you must first have at least a basic understanding of the Florida probate process. Probate is the legal process that is required to follow the death of an individual. Probate serves several purposes related to estate assets and the payment of estate debts. Although the probate process is never exactly the same, given the unique nature of an estate, there are a number of steps that are common to almost every probate, including:
- Opening probate – the Executor of the estate usually begins the probate process by submitting the original Will to the appropriate court and petitioning to open the probate of the estate.
- Identifying and locating assets – all assets owned by the decedent at the time of death must first be identified and then located and secured by the Executor of the estate. The larger the estate, and the more complex the assets are, the more time consuming this can be.
- Valuing assets – a Date of Death value must be obtained for all estate assets. This may require the assistance of professional appraisers for real property or valuable assets.
- Notifying creditors – known creditors of the estate are usually personally notified while unknown creditors must receive notice via publication.
- Paying claims – creditors have a specific amount of time within which to file a claim against the estate. Claims are reviewed and approved claims paid out of estate assets.
- Defending the estate – if a Will contest is filed, for example, the Executor of the estate must defend the Will submitted for probate. The entire probate process effectively comes to a halt until the litigation reaches a conclusion.
- Payment of taxes – any personal or estate taxes must be paid before the probate process can come to an end.
- Transfer of assets – all remaining assets are transferred to the intended beneficiaries or heirs of the estate.
The Costs of Probate
Even a relatively small estate typically takes months to probate. A large and/or complex estate can take years to probate. All the while, assets that were intended for loved ones are inaccessible because they are tied up in the probate process. In addition, probate itself can be expensive. Everyone involved in the process is entitled to be compensated for his/her time. The Executor receives a fee as do appraisers, accountants, real estate agents, and the estate planning attorney hired to assist the Executor. By the time probate is over the estate assets can be significantly diminished, leaving loved ones with less than intended.
How Can Probate Be Avoided?
It isn’t always possible to completely avoid probate; however, you can significantly reduce your estate’s exposure to probate with careful planning. The key is to leave behind as many non-probate assets as possible, including, but not limited to:
- Trust assets
- Proceeds from a life insurance policy
- Certain types of jointly held property
- Accounts designated as “Payable on Death (POD)” or “Transfer on Death (TOD)”
- Certain retirement accounts
By structuring your estate in a way that converts as many probate assets as possible to non-probate assets you can dramatically reduce the amount of time and money your estate will spend on probate. Consequently, you are saving your loved ones time and frustration, ensuring that they have access to assets much sooner, and leaving more assets in the estate for them overall.
If you have additional questions about how to include probate avoidance strategies in your Florida estate plan, please contact the experienced estate planning attorneys at Kulas & Crawford P.A. by calling 772-398-0720 to schedule an appointment.