Estate planning attorneys frequently handle probate cases. While many people have heard of it, few know what it actually entails — until they have to go through it following the death of a loved on. Families and individuals who are planning ahead would do well to know what probate is, what to expect when an estate goes into probate, how much it can cost, and steps that can be taken before a person dies to avoid probate altogether.
What is an estate?
In estate planning, an estate refers to the total sum of an individual’s assets and property at the time of their death. It can include real estate, personal property, bank accounts, investments, retirement accounts and any other assets that the person owns.
When someone dies, their estate will be managed and distributed according to their wishes, as outlined in their will or trust. If the person did not have a will or trust, the estate will be distributed according to state law.
Estate planning is the process of creating a plan for the distribution of a person’s assets after they die. This includes creating a will or trust, naming beneficiaries for life insurance policies and retirement accounts, and appointing someone to manage the estate, known as an executor or trustee.
Effective estate planning can help ensure that a person’s assets are distributed according to their wishes, that their loved ones are taken care of, and that unnecessary taxes and fees are avoided. It is important to regularly review and update estate plans as circumstances change, such as the birth of a child, marriage or divorce.
What Is Probate?
Probate is a legal process that takes place after a person dies. It involves a court of law overseeing the distribution of the deceased person’s assets to their beneficiaries. This process is necessary to ensure that the deceased person’s debts are paid and that their assets are distributed according to their wishes.
What Can People Expect When an Estate Goes Into Probate?
When an estate goes into probate, the court will appoint an executor to manage the deceased person’s assets. The executor is responsible for paying off any outstanding debts and distributing the remaining assets to the beneficiaries. This process can take several months to complete, and it can be costly. The exact cost of probate depends on the size of the estate and the complexity of the case.
How Much Does Probate Cost?
Probate can be expensive. The costs can include court fees, attorney fees, executor fees, and appraisal fees. In some cases, the total cost of probate can be as high as 5% of the estate’s total value. For example, if an estate is worth $1 million, the cost of probate could be as high as $50,000.
“[Probate] is necessary to ensure that the deceased person’s debts are paid and that their assets are distributed according to their wishes.”
How Can Probate Be Avoided?
There are several steps that can be taken before a person dies to avoid probate altogether. One common way to avoid probate is to create a living trust. A living trust is a legal document that allows a person to transfer their assets to a trust during their lifetime. The assets in the trust can be managed by a trustee, who will distribute them according to the person’s wishes after they die.
Another way to avoid probate is to own assets jointly with someone else. When a person owns a real estate asset jointly with another person, the property can automatically transfer to the surviving owner when one of them dies. This is known as joint tenancy with right of survivorship.
Lastly, naming beneficiaries for assets like life insurance policies and retirement accounts can also avoid probate. When a person names beneficiaries for these assets, the assets will transfer directly to the beneficiaries after the person dies.
Probate Considerations Particular to Florida
There are specific estate planning statutes in the state of Florida that affect the probate process.
Some of the key considerations of these statutes include:
- Homestead protection: In Florida, a person’s primary residence may be protected from creditors and may also have special rules for transfer upon death.
- Elective share: Spouses have the right to claim an elective share of the estate, even if they are not included in the will or trust.
- No state estate tax: Florida does not currently have a state estate tax, although federal estate taxes may still apply in cases where the decedent was a high-net-worth individual.
- Limited family allowance: In Florida, a spouse and minor children may be entitled to a limited family allowance for support during the probate process.
- Formal administration: For estates valued at over $75,000, formal administration is required, which involves court supervision.
- Simplified administration: For estates valued at less than $75,000, simplified administration may be used, which is a simpler and less expensive probate process.
It’s important to note that applying these legal concepts can be complex and they may change over time. Therefore, it is always advisable to consult with an experienced Florida-licensed estate planning attorney to ensure that your estate plan is in compliance with all relevant laws and regulations. An attorney can help you understand the specific laws that apply to your situation and help you create an effective estate plan that meets your needs and goals.
South Florida Law
Probate is a legal process that can be costly and time-consuming. However, there are steps that can be taken before a person dies to avoid probate altogether. South Florida Law has the experience and local knowledge to answer your questions about probate and can help you review your estate planning options. When you work with the attorneys of South Florida Law you benefit from the attention to detail and partner-level involvement of a boutique firm while getting access to the resources of a lawyer law firm. The best time to plan your estate is as early as possible in order to ensure you have the prior planning in place to help your family manage your estate when you pass away. Contact South Florida Law today either via our contact form or on (954) 900-8885.