How To Update Estate Plans To Avoid Probate Challenges

Estate plans are a vital part of anyone’s future planning. Whether you have just relocated to Florida, need to create a plan for the first time, or update one you created years or even decades ago, keeping estate plans current is a key part of ensuring that your family does not have to deal with frustrating probate challenges later. Florida probate can be complex and confusing, but with the proper updates to your estate plan, you may be able to avoid probate and the challenges that can come with it. A knowledgeable estate planning attorney with Loughlin Law, P.A. may be able to assist you with updating or creating your plan and ensuring that it reduces or eliminates the need to probate your estate. Call (561) 677-8384 to learn more about estate planning and probate avoidance.

What Is Probate and Why Would Someone Want to Avoid It?

Florida probate is a legal process through which a deceased person’s assets are distributed to other beneficiaries, and any debts the deceased owed are paid or otherwise resolved. This court-supervised process identifies and gathers all of the deceased individual’s assets. Florida Courts Help states that there are two types of probate: formal administration and summary administration. Most probated estates go through formal administration, which is the longer and more complicated process. Summary administration is limited to smaller estates valued at $75,000 or less, is a quicker process, and does not require a personal representative.

Probate can be a bit intimidating and many people would like to avoid it. There are many reasons someone might want to avoid probate, including but not limited to:

• It takes a long time for beneficiaries to get possession of inherited assets.
• Probate is a cumbersome court process they do not understand or want to learn about.
• Avoiding probate saves money.
• Keeping their assets out of probate court maintains their privacy.
• Skipping probate prevents unwanted delays in distributing the estate.
• It avoids conflict or disputes among their family members.

While there may be other ways to avoid probate, the most common way is with a comprehensive estate plan that takes advantage of various tools to keep assets out of probate.

What Is an Estate Plan?

An estate plan is a collection of legal documents that dictate the distribution of someone’s assets upon their death, as well as offers instructions regarding what to do if that person is incapacitated. The documents that can be included in an estate plan are:

• Wills and trusts
• Beneficiary designations on life insurance or annuity policies
• Charitable planning
• Asset protection
• Guardianships or conservatorships
• Living wills, powers of attorney, and other incapacity planning documents
• Business succession planning
• Lady bird deeds (also known as enhanced life estate deeds)

Not every estate will need to use every document in the list, but individuals will want to explore the potential benefits each document offers before deciding whether to include it. Except for wills, many of these documents can aid a person’s desire to avoid probate.

What Does Not Pass Through Probate?

Per FL §732.101, any part of a deceased person’s estate that is not distributed by a will passes to their heirs through intestate succession, or to next of kin based on Florida law. However, as simple as that makes it sound, it is more complicated than that. There are several methods by which an individual can distribute parts of their estate to heirs that are not a will and many of those methods also allow the individual to avoid probate. A carefully crafted estate plan can allow an individual’s estate to completely bypass probate or strictly limit what must be probated.

FL §732.402 provides a list of exempt property. This exempt property comprises specific assets the individual may have owned at the time of their death that do not go through probate and are not used to pay debts to creditors. Exempt property that does not typically go through probate includes:

• Homestead property
• Joint tenancy property (property that has a second named owner)
• Beneficiary-designated accounts, such as life insurance or pay-on-death accounts
• Trusts and any assets in those trusts
• Enhanced life estate deeds
• Joint accounts
• College tuition savings
• Household furnishings up to a net value of $20,000 on the date the deceased died
• Up to two motor vehicles in the deceased’s name, used regularly by the deceased or a member of their immediate family, and weighing no more than 15,000 pounds each

While these assets are exempt from probate by state law, individuals may wish to consult with an attorney at Loughlin Law, P.A. to ensure that their assets meet the legal requirements. An attorney may also be able to assist the individual in protecting those assets with their estate plan to avoid probate, if those assets do not meet the legal requirements to be exempt.

Potential Probate Challenges

While probate may seem like a simple, straightforward process, it can be challenging. Careful estate planning can avoid many of these challenges, but some may be unavoidable, such as if the executor refuses the role. Some potential probate challenges that can lead people to want to avoid probate include conflicts over or challenges to the will, contesting the will, disputes between family members, improper execution, assets in multiple states, an executor refusing the role, the absence of a will, lack of testamentary capacity, and fraud or undue influence.

How to Avoid Probate and Its Challenges

Depending on the specific assets an individual owns and how they want to distribute them, it may not be possible to avoid probate entirely. However, a well-crafted estate plan may significantly minimize what needs to be probated and reduce the chances of any challenges arising.

Send Gifts to Heirs While You Are Still Alive

One way to avoid probate is to give heirs their inheritance as a gift while the asset owner is still alive. Anything an individual gifts to their loved ones while still alive is no longer theirs, so it does not need to be probated when they die. This also allows the gifter to see their loved ones enjoy those gifts.

However, it is worth noting that this also means the individual must give up ownership of the asset, which may not be what they want in some cases, such as a primary home or an automobile. Additionally, the Internal Revenue Service (IRS) excludes up to $19,000 in gifts per recipient in 2025. Anything over that threshold is subject to gift taxes.

Set Up Joint Ownership of Assets When Possible

Joint ownership, or joint tenancy with right of survivorship, allows the asset to become wholly owned by the surviving owner when one owner dies. This type of ownership can be applied to real estate, bank accounts, and other assets. While married couples most commonly use it, the other owner does not have to be a spouse. The other owner can be an adult child, parent, sibling, relative, friend, or other individual.

Another form of joint ownership, tenancy by the entirety, is very similar to joint tenancy with the right of survivorship. However, it can only be used by married couples in Florida. Tenancy by the entirety offers some protections against creditors and treats the spouses as one legal entity, requiring both to participate in any dealings with the property.

Designate Checking and Savings Accounts as Pay-On-Death

Most banks and credit unions offer the option for account owners to name a pay-on-death beneficiary for their checking and savings accounts. This designation means that when the account owner (or both owners, if the account is jointly owned) has died, the pay-on-death named beneficiary gains access to the account. They will typically be required to close the account and place the remaining funds into their own account. The beneficiary will likely be required to show a death certificate and may need to leave the account funds available for creditor claims for some time.

Another option is a transfer-on-death beneficiary designation for securities such as stocks and bonds. This works in the same way that the pay-on-death designation does for checking and savings accounts. This includes allowing creditor claims against the securities.

Create Revocable Trusts

One of the most flexible and powerful strategies for estate planning is the revocable trust. Revocable trusts remove the assets from the grantor’s estate while still allowing the grantor to control and possess them (if they name themselves as trustee and structure the terms of the trust properly).

The grantor or settlor (the individual creating the trust) funds the trust with the assets they want to put in the trust. The trustee then assumes control of the trust and its assets. If the trustee is the grantor, or if the named trustee passes away, a successor trustee takes over after the grantor’s death and distributes the assets in the trust according to the trust’s terms and schedule, which were set by the grantor when the trust was created.

Use a Lady Bird Deed to Pass Property to Heirs

A lady bird deed, also called an enhanced life estate deed, is a way that a property owner can sign the deed over to the beneficiaries they want to give the home to. The property owner retains all rights to the property during their lifetime, including the right to rent out the property, mortgage or sell it. This preserves tax exemptions, offers creditor protection, and protects Medicaid eligibility, while also allowing the property to avoid probate.

A lady bird deed can ensure a seamless transfer of ownership to the beneficiary, who only needs to provide the property owner’s death certificate to the county clerk to transfer the deed into their name. However, lady bird deeds can be complicated and may cause title issues or be overridden by a will. Individuals may want to consult with an attorney to ensure that they are opting for the right choice for their specific needs.

Keep Estate Plan Current

Keeping their estate plan current can be critical for avoiding probate. If a component of the estate plan is outdated, it can create questions about the entire plan. Individuals should review and make any necessary updates to their estate plan after any significant life change, such as relocating to Florida, marrying, divorcing, birthing or adopting a child, acquiring or selling substantial assets, or retiring. Additionally, even if there are no major life events, individuals should review their estate plan every three to five years to ensure it is current.

Plan for Incapacity

While it may not directly impact probate, planning for incapacity is an integral part of estate planning. Without the appropriate healthcare directives or a durable power of attorney, family members may argue over who should have decision-making authority. They may also be forced to go to court to have the court appoint someone to make decisions on the incapacitated individual’s behalf. These disputes can breed resentment and frustration that may cause more conflict when the incapacitated individual passes away and their estate goes through probate, causing more arguments and delays.

Manage Family Dynamics

Another layer of complexity in estate planning is family dynamics. A parent in a blended family may want to divide their estate equally between children from two or more marriages, or between their biological children and their stepchildren from a previous marriage. Still, without clear instructions, those children may accuse each other of trying to get a larger share of the estate. Individuals should use precise language to ensure their wishes are clear, and in some cases, may want to consult with an attorney to ensure that their intent is not only legal, but made clear with the appropriate language.

Choose the Right Trustee and/or Personal Representative

Along with precise language, another way to manage family dynamics and avoid probate challenges is to choose the right trustee and/or personal representative. Many believe they must select a family member, such as their spouse, an adult child, or a sibling. However, the law does not require this. The individual must only meet the legal requirements of FL §733.302 for personal representatives and the Florida Bar for trustees.

If an individual knows that choosing a relative as personal representative or trustee is likely to cause friction between their heirs, they may consider asking a friend instead. Alternatively, they could also have an attorney act as either a personal representative or trustee, and there are banks and other financial institutions that also offer trustee services for a fee. By hiring a professional, individuals can eliminate any arguments of favoritism or caused by jealousy among their loved ones.

Address Special Needs Beneficiaries Properly

Whether it is their child, a sibling, or someone else they care about, many people are financially responsible for an individual with special needs. These needs often mean the individual is eligible for government benefits such as food benefits, housing assistance, Medicaid, or Supplemental Security Income. A well-intentioned inheritance could cause the beneficiary to become ineligible for these much-needed benefits.

However, a special needs trust is one way that an individual can ensure their special needs loved one receives the inheritance they want to give them, while also protecting their eligibility for government benefits they need. This type of trust can include a house, a motor vehicle, stocks, bonds, or securities, as well as cash or life insurance policies. The trust cannot duplicate or supplant Medicaid’s needs assistance or the trust’s distributions could still render the beneficiary ineligible for aid. Individuals who want to create a special needs trust may wish to consult with an attorney to ensure that the terms and distributions of the trust do not create the potential for the beneficiary to become ineligible for the government assistance they need.

Include Digital and Other Modern Assets and Liabilities

If an individual has digital assets, such as cryptocurrency, it is essential to not only include it in their estate plan but to provide detailed information on where and how to access those assets. This may also include any bank accounts, investment or retirement accounts only accessible online. When beginning the estate planning process, or preparing to update an estate plan, individuals should take some time to thoroughly review their assets to ensure they are not forgetting anything.

Additionally, other modern assets such as online businesses or intellectual property, and modern liabilities such as reverse mortgages (which could require the heirs to sell the property to pay the debt) should also be included in an estate plan. Again, individuals should take some time to ensure they have noted all assets and liabilities when preparing to establish or update an estate plan. They may also want to consult with an attorney to determine whether there are specific steps they may need to take to address how those assets or liabilities should be handled by their beneficiaries.

Use Life Insurance and Annuity Policies to Pass Cash to Heirs

Sometimes, people want to leave a cash inheritance to their loved ones. A trust is one way an individual could leave cash to a beneficiary, but the most common way people think to do this is with their will. However, the will must be probated, which delays the beneficiary receiving the cash. If the deceased has a lot of debt, the money may be used to pay creditors rather than going to the beneficiary as intended.

Life insurance and annuity policies are other ways to avoid probate. Both allow the individual to name a beneficiary to whom the funds are distributed upon the individual’s death. These funds can be released much more quickly than cash going through probate, and can provide greater flexibility for the use of the funds than a trust. Life insurance or annuity policies can provide money for paying bills while the family adjusts to life without their loved one, college tuition, or other needs.

How a Florida Estate Planning Attorney Can Assist in Creating Your Estate Plan

Whether you have just moved to Florida or had another significant life change that warrants updating estate plans, this is a good time to ensure that you have taken all the steps you can to avoid probate with your estate plan. An experienced Florida estate planning attorney with Loughlin Law, P.A. may be able to assist you with establishing or updating estate plans, protecting your assets from going through probate, and setting up all the necessary components for your needs, such as trusts, healthcare directives, and exploring asset ownership options. Call (561) 677-8384 to schedule a consultation and review your estate planning needs.