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5 Tips to Help Avoid Probate

5 Tips to Help Avoid Probate
Elder Law
February 4, 2021

At some point in your life, you will need to take the steps to execute a plan to manage your assets after you die. If you have specific ideas about who should receive your real property, cash, and other assets, you must formalize them and make them legally binding.  As death is often unpredictable, you should consider establishing a financial plan while you're still healthy enough to make these important decisions. When you fail to take action, your assets ultimately end up being managed and distributed through probate. Luckily, there are ways you can prepare for your death in order to avoid probate.

Why Should You Avoid Florida Probate?

Whether you die with or without a will, your assets enter probate. A court official must review and approve everything. Before your executor can perform any fiduciary duty, they must obtain the court's permission. Not everyone realizes that wills are a one-way ticket to court!

After creditors are given an opportunity to submit their claims, your heirs eventually receive their inheritance but until then, the court controls your assets. A court official decides when it's appropriate to sell or dispose of your real and personal property. As with other courts, probate officials charge fees for their services. The court usually collects a fee that's based on a percentage of your estate's dollar value. The fees are often significant enough to reduce the overall value of an estate.

You Can Avoid Probate

Probate is often a harsh reality that penalizes your heirs by controlling your estate and diminishing its value. When you plan ahead of time, you can avoid the financial penalties. Here are 5 methods to consider. 

1. Work With a Florida Estate Planning Attorney

Estate planning attorneys understand the best available methods for retaining and protecting your assets. As each person's financial situation is unique, they never present a one size fits all strategy. Estate planning attorneys discuss your personal goals and financial requirements. They protect your assets by recommending and implementing appropriate solutions. 

2. Establish A Living Trust  

A living trust, also called a “revocable trust,” is a simple method for avoiding probate. Your attorney establishes a living trust while you're still alive. Trust documents include instructions for asset distribution to your heirs after your death. A trustee makes decisions about your assets, including buying, transferring, or selling. To maintain control, you can name yourself and your spouse as trustees. 

As long as your trust remains intact, your property doesn't have to go through probate. This helps your heirs avoid unnecessary fees. Unlike a will, a trust is a private document. It never becomes a public record unless an heir contests its provisions. 

3. Give Your Assets as a Gift

When you gift assets to a family member or a charity, they avoid the probate process. Gifting allows you to pass assets to your heirs without creating a will or a living trust. 

You must follow IRS rules and guidelines and comply with any modifications or rule changes. Currently, you must report gifted assets on Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return.  As of 2020, the IRS requires you to complete Form 709 only if you give a gift to someone other than your wife and the value exceeds $15,000. The Taxpayer First Act provisions have further simplified the process by adding Form 709 to the catalog of IRS forms you may now file online. 

However, there are some very negative tax consequences with assets that are gifted while the original owner is alive vs. transferring assets through Will or Revocable Living Trust.

Also, gifting naturally involves the loss of control and benefit of the assets. These assets are now subject to the creditors/divorce of the recipient. Living Trusts allow your heirs to benefit from creditor protection. 

4. Title Your Assets Jointly 

When you establish joint property ownership with a spouse or a partner, you can avoid the probate process. Your title must properly designate the ownership structure. 

  • Joint Tenancy with Rights of Survivorship: When one owner dies, the property passes to the joint owner. 
  • Tenancy by the Entirety: This conveys a similar right of ownership to legally married couples. 

These ownership rights apply to real property as well as other titled personal property such as vehicles and boats. 

5. Designate Account Beneficiaries 

Just as you do with life insurance policies, you can name beneficiaries for retirement, savings, investment, and other financial accounts. Your beneficiary will receive the proceeds and the accounts won't have to go through probate. You can usually accomplish this by completing a beneficiary form. 

Contact an Estate Planning Attorney

Estate planning isn't an easy process but it helps you gain peace of mind. It requires a time commitment from both you and your estate planning attorney. Once you complete the planning and implementation processes, you review them periodically and implement changes to keep pace with your current with your needs.

Contact us today to discuss your estate planning needs.

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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