Please click a question below to learn answers to frequently asked questions about Probate.
How can I avoid probate?
Almost all of my estate planning clients have one thing in common: they want to avoid probate, or limit it as much as possible.
Probate is a court-supervised legal process for transferring the assets of a deceased person to his or her heirs. Probate is required any time a person dies with assets in his or her name, regardless of whether or not the person has a valid will. Because of the expense, delays and hassle of probate, many people prefer to avoid probate if possible.
So how do you avoid probate?
There are several ways to avoid probate, but all of them are based on the same principle: Probate can only be avoided by titling your assets so that they pass to someone else at your death. If you die owning any assets that do not pass to someone else at your death, probate will be required to transfer those assets.
Why Joint Accounts Are a Bad Idea
One of the biggest pitfalls in correctly titling your assets is joint accounts. For example, you may want your daughter to have access to your bank account to help manage your finances especially when you are not feeling well. You add her as a joint account holder based on the advice of your banker. This is very common advice from the banker since it’s easiest for the bank, but may not be best for you. Here’s why. When you die, regardless of the fact that your will directs your property to pass in equal shares to all of your children, all of the money in the account goes to your daughter. She alone has the authority to decide whether to pass it along to her siblings, or whether to use the funds for your final expenses, like a funeral or unpaid bills. A common rationalization for daughter keeping the money is compensation for taking care of you, and the misguided belief that it’s what you wanted. As you can imagine, it creates great family conflict and doesn’t comply with your wishes.
A Better Way To Title Bank Accounts
Title all accounts with a durable power of attorney. This agent can access bank accounts, pay your bills, sign contracts, handle financial transactions or sign legal documents for you, so long as their actions are consistent with your best interest. An elder law or estate planning attorney will be able to assist you in drafting an effective durable power of attorney. In addition to adding your agent to your account, you should also title your account with Pay On Death beneficiaries, being all your heirs. This will allow your daughter to help you with your finances while you are alive, but the funds in your account will pass to those you wish to inherit upon your death. A word of caution, be very careful who you pick as your agent. Even though Florida’s exploitation laws make it a crime to abuse powers under a durable power of attorney, it is very difficult to recover funds after they have been stolen!
Consider an Enhanced Life Estate Deed
Only available in a few states, a Florida Enhanced Life Estate Deed can help avoid probate for your real property, speed up the transfer of a property upon death, maintain the ability to use the fair market value of the property at the time of death as a cost basis (lowers capital gains taxes upon sale), and maintain Medicaid eligibility. You deed your house back to yourself and upon your death, it goes to your designated beneficiaries and does not pass through probate. If you have a mortgage on your property, get approval from the mortgage company prior to completing an enhanced deed. A good elder law attorney or real estate attorney will be able to help you with this deed.
Using Designated Beneficiaries on Other Assets
A way to avoid probate for investment accounts, individual retirement accounts, and life insurance is to designate beneficiaries and contingent beneficiaries on these assets. Investment accounts sometimes use the term, Transfer On Death beneficiary designation. Contact your investment broker or insurance professional to be sure you have designated a beneficiary, and then add a contingent beneficiary. If you have more than 1 person to designate, simply add all their names. You retain complete control of your property while you are alive, and you can change the beneficiary at any time. At your death, the property is transferred directly to the beneficiary, outside of probate. Speak with your elder law attorney or estate planning attorney to learn more about the advantages of such designations.
We have helped hundreds of clients’ families avoid probate while making sure inheritance monies are distributed according to client instructions. It creates an easier end-of-life situation with families focusing on what’s important-celebrating the life of a loved one.
How do I find the right elder law and special needs law attorney?
Most attorneys do not specialize in every one of these areas. So when an attorney says he or she practices Elder and Special Needs Law, find out which of these matters the attorney handles. You will want to hire the attorney who regularly handles matters in the area of law of concern to your particular case and who will know enough about the other fields to question whether the action being taken might be affected by laws in any of the other areas of law.
Finding an Elder And Special Needs Law Attorney
Before making the effort, step back a moment and try to determine whether you actually have a legal problem in which an attorney needs to be involved. If you’re not sure, ask your clergy, your financial advisor, a social worker, or a trusted friend to help you decide whether this is a legal issue rather than a medical or a social services issue.
There are many places to find an attorney in your city or state who specializes in elder and special needs law. Check with local agencies to obtain good quality local referrals such as the Alzheimer’s Association, AARP, Area Agency (or Council) on Aging, Children of Aging Parents, State or local bar association, AND National Academy of Elder Law Attorneys. If you know any attorneys, ask them for a referral to an Elder and Special Needs Law attorney. An attorney is in a good position to know who handles such issues and whether that person is a good attorney.
Ask Questions First
Ask lots of questions before selecting an Elder and Special Needs Law attorney. Start with the initial phone call with the receptionist:
- How long has the attorney been in practice?
- Does his or her practice emphasize a particular area of law?
- How long has he or she been in this field?
- What percentage of his or her practice is devoted to Elder and Special Needs Law?
- Is there a fee for the first consultation, and if so how much is it?
- Given the nature of your problem, what information should you bring with you to the initial consultation?
Once You Have Found an Elder and Special Needs Law Attorney
When you have found an appropriate attorney, make an appointment to see him or her. During the initial consultation, you will be asked to give the attorney an overview of the reason you are seeking assistance, so be sure to organize and bring all the information pertinent to your situation. After you have explained your situation, ask:
- What will it take to resolve it?
- Are there any alternate courses of action
- What are the advantages and disadvantages of each possibility?
- How many attorneys are in the office?
- Who will handle your case?
- Has that attorney handled matters of this kind in the past?
- If a trial may be involved, does the attorney do trial work? If not, who does the trial work? If so, how many trials has he or she handled?
- Is that attorney a member of the local bar association, a health advocacy committee, or trust and estates committee?
- How are fees computed?
- What is the estimate of the cost to resolve your problem and how long will it take?
Some attorneys bill weekly, some bill monthly, some bill upon completion of work. Ask about these matters at the initial conference, so there will be no surprises. If you don’t understand, ask again. It is very important that you feel comfortable in this area.
In addition to fees, most attorneys will charge you out-of-pocket expenses. Out-of-pocket expenses typically include charges for copies, postage, messenger fees, court fees, deposition fees, long-distance telephone calls, and other such costs.
The attorney may ask for a retainer. This is money paid before the attorney starts working on your case. It is usually placed in a trust account and each time the attorney bills you, he or she is paid out of that account. Expenses may be paid directly from the trust account. The size of the retainer may range from a small percentage of the estimated cost to the full amount. In many cases, the total fee will be higher than the retainer.
Get It In Writing
Once you decide to hire the attorney, ask that your arrangement be put in writing. The writing can be a letter or a formal contract. It should spell out what services the attorney will perform for you and what the fee and expense arrangement will be.
Make It A Good Experience
Use the questions and answers above as a guide not only to the attorney’s qualifications, but also as a way of determining whether you can comfortably work with this person. Only if you are satisfied with the attorney you have hired from the very start will you trust him or her to do the best job for you.
About the National Academy of Elder Law Attorneys (NAELA)
This informational brochure is provided as a public service by NAELA and is not intended as legal advice. Such advice should be obtained from a qualified Elder and Special Needs Law attorney.
NAELA, founded in 1987, is a national association of Elder and Special Needs Law attorneys devoted to the education and training of attorneys who can meet the needs of seniors and people with special needs, and who advocate for the needs of such individuals.
Shannon Miller of Miller Elder Law Firm is a board certified Elder Law attorney and Past President of the Academy of Florida Elder Law Attorneys, the state chapter of NAELA. The attorneys at Miller Elder Law Firm have helped hundreds of clients requiring elder law and special needs law expertise.
How do I prepare for probate?
Probate is often misunderstood with a reputation of being expensive, lengthy, and confusing. At the Miller Elder Law Firm, our commitment to the community is an education to help you understand the basics of the legal process. This allows you to make informed, sound decisions with all of the facts.
Enjoy our series about probate and what you need to know.
What is Probate?
It is a court-supervised process for identifying and gathering the assets of a deceased person (decedent), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries. In general, the decedent’s assets are used first to pay the cost of the probate proceeding, then are used to pay the decedent’s outstanding debts, and the remainder is distributed to the decedent’s beneficiaries. Probate administration applies only to probate assets; these are assets that the decedent owned in his or her sole name at death, or that were owned by the decedent and one or more co-owners and lacked a provision for automatic succession of ownership at death. Probate is required to transfer those assets. This requires a personal representative (PR) who is either named in the will or by the court if there is not a will. See our blog on the duties of a personal representative.
What are Probate Assets?
The decedent’s assets in his /her sole name at death or assets with co-owners and no provision for automatic succession are considered probate assets and require the court-supervised process.
A bank account or investment account in the sole name of a decedent is a probate asset, but a bank account or investment account owned by the decedent and payable on death or transferable on death to another, or held jointly with rights of survivorship with another, is not.
A life insurance policy, annuity contract or individual retirement account that is payable to a specific beneficiary is not a probate asset, but a life insurance policy, annuity contract or individual retirement account payable to the decedent’s estate is a probate asset.
Real estate titled in the sole name of the decedent, or in the name of the decedent and another person as tenants in common, is a probate asset (unless it is homestead property), but real estate titled in the name of the decedent and one or more other persons as joint tenants with rights of survivorship is not a probate asset.
Property owned by husband and wife as tenants by the entirety is not a probate asset on the death of the first spouse but goes automatically to the surviving spouse.
Probate is necessary to pass ownership of assets from the decedent to the beneficiaries, provide closure to the estate, and to make sure creditors are paid.
Everyone should prepare for this process so decisions are made ahead of time. This usually results in less family conflict and a simpler legal process for the disbursement of all assets. We can help you plan for probate.
Is homestead property a probate asset?
Preparing for Probate: Is Homestead Property A Probate Asset?
The answer is “yes” and “no”
If a homestead property is established and meets Florida eligibility requirements, the property can be distributed to the beneficiaries of the decedent free of creditor’s claims. If the property still has a mortgage, owes money for repairs or homeowners association liens, the homestead protection does not apply in full and those creditors can seek to reclaim that debt.
If an Enhanced Life Estate Deed or Lady Bird Deed is in place, the property will pass directly to the beneficiaries of the Deed and not go through probate. Follow our blog series for an article dedicated to this topic.
Definition of Homestead Property
Let’s start at the beginning with the definition of homestead property.
Homestead property is defined as the home and attached land of an individual or family serving as the primary residence. Florida courts have liberally expanded definitions of homestead property to include more than just a single-family house. Condominiums, manufactured homes, and mobile homes are also afforded homestead protection. The Constitution defines homestead as one’s principal place of residence up to one-half acre within a municipality and up to 160 contiguous acres in any county in Florida.
Homestead property is protected from creditors upon death if you are a permanent Florida resident, and the homestead property is your primary place of residence. This means that a creditor cannot force the sale of your homestead to satisfy a judgment.
In order to maintain this post-death exemption, the homestead must pass to a person or persons who are declared the deceased owner’s “heirs at law.” If this is the case, the court should be made aware of this through a specific petition in order to preserve the homestead protection. Like many such exemptions or protections, if you don’t ask for this protection from the court, you don’t get it. This is one of the biggest dangers of trying to take an estate through probate without an attorney.
What Is Not Considered Homestead Property?
These properties are not protected by the Homestead law and may be considered a probate asset.
1. Property purchased as a future residence is unprotected until the property is occupied as a principal residence.
2. A second home or investment property cannot be considered a Florida homestead.
3. Only “natural persons” qualify for homestead protection, so properties titled in the name of irrevocable trusts, corporations, limited liability companies, or partnerships will not qualify. Property owned by a living trust can be homestead property.
What makes Florida’s homestead protection such a powerful asset protection tool is its unlimited monetary protection. A Florida resident can invest millions of dollars in large estate homes and farms and protect the full value of these luxury residences under Florida’s homestead law. The provision is written into the Florida Constitution, Article X, section 4, so it cannot be removed without a constitutional amendment.
As with any law, there are exceptions. Four types of creditors can still force the sale of a homestead to collect debts owed to them. These are:
1. The State of Florida and its counties or municipalities, to collect past due property taxes.
2. Parties to whom the property was specifically pledged as credit for a mortgage.
3. Mechanics who are owed money for work performed in repairing or improving the property.
4. Any creditor with a lien that pre-dates the establishment of homestead. This usually includes condominium and mandatory homeowner association liens, depending on the language and age of the covenants.
5. Co-ownership of a homestead can jeopardize the homestead exemption when one of the co-owners does not reside on the property. A judgment creditor of the non-resident co-owner can force the property to be sold.
The homestead property law in regards to probate can be complicated requiring the expertise of an attorney with a specialty in this practice area. We have helped many clients through the probate process involving real estate. We can help you.
How can I use an enhanced life estate deed 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.