Why You Want To Avoid Probate
Almost all of our clients at The Miller Elder Law Firm want to know how to pass assets, including property, to their children (or other beneficiaries) without the expense or delay of a formal probate process in Court. The goal is to avoid probate. We often recommend the use of an enhanced life estate deed, which is unique to Florida. A Florida Enhanced Life Estate Deed can avoid probate for your real property, speed up the transfer of a property to loved ones upon your death, maintain your continued ownership of the asset until you die, and maintain your potential Medicaid eligibility. No interest in the property transfers to your loved ones until you die or you and your spouse die, if you are married.
A Typical Scenario Using Enhanced Life Estate Deed
A husband and wife have homestead property and want to leave the property to their two children in equal shares. By executing an enhanced life estate deed, husband and wife maintain ownership of the property during their lifetimes, but when the second spouse dies, the property passes to the two children named on the deed. They can sell or rent the property the next day! While living, both spouses retain the right to sell, mortgage, rent, do a reverse mortgage on the property or anything else that they would normally be able to do with the property. The death of the second is when the interest in the property springs to the named children on the deed.
Homestead in Florida
Homestead in Florida is protected from the claims of creditors. There is some debate as to whether placing homestead into trust will subject your homestead to the claims of creditors. We do know, however, that having an enhanced life estate deed on your homestead property does not subject your home to creditor’s claims as there is no transfer of the property interest until the second spouse dies (or if single, upon death of the original owner).
Probate can be expensive, and take up to a year or more to conduct. If your homestead must be probated, that means your loved ones will not be able to sell it right away – they will have to maintain the property, mow the grass, pay all the bills and property taxes, and obtain a homeowners insurance policy, which can be difficult if no one lives on the property. These are more reasons to avoid probate.
When To Use An Enhanced Life Estate Deed
There are a few words of caution when using an enhanced life estate deed:
- If you have a mortgage, check with your lender to be sure retitling the property into an enhanced life estate deed will not “call the note” or make the balance owed immediately due. We often suggest speaking to the legal department of the lender and then getting assurance in writing that this will not happen when the deed is recorded. Sometimes out of state lenders are unfamiliar with these deeds and simply need educating.
- If one of your named remaindermen on the deed (the 2 children in the above mentioned scenario) dies, you will need to engage in a 2 step process to fix the problem in order to avoid your home passing to their estate instead of their children when you die. That means if one of your children dies, you should then do a special warranty deed of the property back to yourself making yourself whole, then do a new enhanced life estate deed to your grandchildren, being sure that they are not
We believe enhanced life estate deeds are an affordable and flexible addition to your estate planning and can be another tool to avoid probate.
The Next Step To Avoid Probate
We have guided thousands of clients through the estate planning process so their asset distribution and end of life wishes are carried out. We take care of every step, every document, and every submission of your plan so you know it’s done right.
Call our office at 352.379.1900 to set up an appointment to talk about your estate plan or complete the form below and we will contact you.
The Miller Elder Law Firm
Shannon Miller, founder of The Miller Elder Law Firm, is a Florida Bar Board Certified Elder Law Attorney practicing in Gainesville, Florida. Ms. Miller is a member of the Florida Bar Elder Law Section’s Legislative Committee, a Past President of the Academy of Florida Elder Law Attorneys (AFELA), and is a frequent speaker on elder law issues. She is highly specialized in handling financial exploitation cases and recovering assets for its victims. Other practice areas include guardianship, wills and trusts, probate, estate planning, special needs planning, medicare planning and asset freeze litigation. Ms. Miller also serves as an expert for exploitation legislation impacting the state of Florida by protecting vulnerable adults.