Types Of Non-Probate Property

Too many people avoid the estate planning process because it means that they must discuss what might happen to their loved ones, assets, and other belongings when they are gone. However, others want to be sure that their families can receive their distributions as soon as possible while avoiding the probate process altogether. To do this, it helps to know the types of non-probate property and how they transfer to beneficiaries upon the owner’s death. If you are a Florida resident ready to take steps to keep some or all of your assets out of probate after you die, consider contacting a knowledgeable estate planning and probate lawyer with Loughlin Law, P.A. Call (561) 677-8384 to learn more about your options.

What Is Probate?

According to The Florida Bar, probate is a process during which the court supervises the transfer of ownership of a decedent’s assets. The process involves taking inventory of the deceased person’s assets and debts, paying those debts, and then distributing the remaining assets to the decedent’s heirs or beneficiaries. In addition to the deceased’s debts, the estate generally also pays the probate costs and funeral expenses.

If a person dies with a Last Will and Testament (will), it must be admitted to probate so the court can oversee the distribution of the probate assets to the decedent’s named beneficiaries. This legal transfer of property occurs according to the decedent’s wishes in his or her will if there are no disputes from interested parties filed with the court. If a person dies without a will, the probate process allows the distribution of assets to the decedent’s heirs according to Florida law.

Reasons To Avoid Probate

Regardless of the size of a person’s estate, there are several reasons to help loved ones avoid the probate process through careful estate planning. Some of the main reasons include:

• Time: Depending on the size of the estate and other factors, the probate process may take up to three years
• Cost: Probate fees and other related expenses can put a financial strain on a person’s beneficiaries, as these are covered by the estate, thus reducing the overall value of any distributions
• Privacy: Because probate filings are public record, there is no expectation of privacy for details regarding assets, debts, or beneficiaries
• Emotions: The probate process can create emotional distress for a person’s loved ones, especially if it takes longer due to disputes or other issues
• Conflict: When a person’s will goes to probate, family conflict may follow if there are discrepancies in expectations versus what is in the will

What Types of Property Are Exempt From Probate in Florida?

According to the 2024 Florida Statutes, some property is exempt from being included in a decedent’s estate. Because creditors have no legal claim against these assets, they can transfer to the decedent’s spouse or children without being added to the total value of the estate. This property includes the following:

• The decedent’s homestead, as defined by The Florida Constitution
• The decedent’s household furnishings and appliances valued up to $20,000 net upon the date of death
• Two personal motor vehicles in the decedent’s name, each not weighing more than 15,000 pounds and each regularly used by the deceased or his or her immediate family members
• A qualified tuition program, including advance payment contracts for the Florida Prepaid College Trust Fund and participation agreements for the Florida Prepaid College Trust Fund, authorized by the Internal Revenue Code of 1986, as amended
• Death benefits for teachers and school administrators pursuant to section 112.1915 of the 2024 Florida Statutes

Other Non-Probate Property

A skilled estate planning attorney from Loughlin Law, P.A., may be able to help determine whether your assets are exempt or qualify as non-probate property. To keep an estate out of probate, it is important to ensure that all non-exempt assets fall into one of the following categories:

• Property held in a trust: Revocable Living Trusts allow the grantor continued access and control over the assets added to the trust. Because the assets belong to the trust rather than the grantor, they will be protected from the probate process, passing to the beneficiaries as directed in the trust documents.
• Accounts with beneficiary designations: These can include bank accounts or investment accounts. If the bank has either a transfer-on-death or payable-on-death policy, the account can automatically pass directly to a named beneficiary upon the death of the account owner. However, if no designation is made or if the bank does not have beneficiary designations for its accounts, these assets will have to go through probate.
• Retirement benefits: Employer-sponsored pension plans, IRAs, 401(k)s, and retirement savings accounts typically also require beneficiary designations so they can pass easily to loved ones. This is especially helpful for families who rely on the decedent’s income to help them overcome the sudden loss and subsequent financial strain.
• Life insurance policies: A key part of purchasing a life insurance policy is naming one or more beneficiaries, thus making these policies non-probate property. As long as the designations are up to date, these assets should be distributed outside the probate process.
• Jointly owned property: When property is co-owned by two or more people, the portion owned by the deceased is typically transferred to the other owner or owners. Joint tenancy with the right of survivorship is the most common form of having equal shares in a property. Upon the death of one owner, the other owner automatically inherits the decedent’s share. In Florida, the Lady Bird deed, also called an enhanced life estate deed, allows the property to pass directly to the beneficiary upon the owner’s death. Tenancy in common, on the other hand, requires each co-owner to name a beneficiary in a will or trust to inherit ownership.

Contact an Experienced Florida Estate Planning Attorney Today

Carefully planning an estate is important for protecting assets from creditors and taxes and ensuring that loved ones receive the most value from those assets, including probate and non-probate property. Are you ready to start the estate planning process or update your existing documents? Consider contacting a Florida estate planning and probate lawyer at Loughlin Law, P.A., by calling (561) 677-8384 to schedule a consultation today.