Although your estate plan may start out focusing entirely on the distribution of your estate assets, you will likely find that that your estate planning goals expand as your plan grows. One aspect of estate planning that may become important to you is avoiding probate. A Vero Beach probate lawyer at Kulas & Crawford explains how it’s possible to decrease your estate’s exposure to probate through careful estate planning.
What Is Probate and Why Is It Often Necessary?
an estate that consists of all the assets you owned or had an ownership interest in at the time of death. This includes both real and personal property as well as both tangible and intangible assets. Probate is the legal process that many of those assets must go through before eventually being transferred to the intended beneficiaries or legal heirs of the estate. Probate also ensures that all estate assets will be identified, located, secured, and valued as well as all creditors notified and provided with the opportunity to file claims against the estate. Federal and/or state gift and estate taxes are also paid as part of the probate process. If there is a Last Will and Testament, probate also authenticates the Will, or in the alternative, provides the legal forum for contesting the authenticity of the Will.
Must Every Estate Go through Probate?
It is possible for an estate to avoid formal probate in most states. Typically, the key is to reduce the value of probate assets left behind. If the value of non-probate assets is below a specific dollar amount in many states, the estate will qualify for a small estate alternative to formal probate. The rules for small estate administration vary by state so make sure that your estate qualifies in the state wherein you are considered a legal a resident. Some tips that may help your estate avoid the need for formal probate include:
- Make lifetime gifts. Only assets owned by you at the time of your death are potentially subject to going through probate. With that in mind, gifting assets while you are still alive instead of waiting until your death is an excellent probate avoidance strategy. There are often tax advantages to lifetime gifting that may further benefit your estate. Plus, you get the benefit of being alive to watch the beneficiary enjoy the gift.
- Use a trust to distribute assets. Assets held in a trust are non-probate assets and can be distributed immediately if the trust terms provide for that. Most assets, including your home, can be held in a trust. Using a trust as your primary method for distribution of your estate assets can dramatically reduce the size and value of the estate that must go through probate.
- Titling assets jointly with rights of survivorship. Certain types of jointly held property will bypass probate because the decedent’s interest passes automatically to the co-owner(s). The key is that the property must be held jointly with rights of survivorship. Your interest in jointly held property with rights of survivorship will pass directly to the co-owner upon your death which is why many married couples title real property this way.
- Designating accounts as POD or TOD accounts. The manner in which assets are titled can also be used to avoid probate. Certain accounts can be designated as “Payable on Death (POD)” or “Transfer on Death (TOD)” accounts which allows you to designate a beneficiary who will automatically become the owner of the assets held in the account upon your death. Unlike jointly held assets, however, a beneficiary of a POD or TOD account has no ownership interest in the asset while you are alive.
Contact a Vero Beach Probate Lawyer
To learn more, please join us for an upcoming FREE seminar. If you have additional questions or concerns about probating an estate in Florida, please contact an experienced Vero Beach probate lawyer at Kulas & Crawford by calling (772) 398-0720 to discuss your legal options.