Probate, explained quite simply, is the legal process by which the Court oversees the appointment of a personal representative who is responsible for gathering the deceased person’s assets and distributing them to pay creditors and administration expenses before final distribution to the beneficiaries or heirs. (See What is Probate?) Contrary to popular belief, however, not all Florida estates require probate. Generally, if a person dies owning property in his or her individual name alone, then probate is required. However, there are many forms of estate planning that can be implemented to avoid the unnecessary costs and complications involved in many formal probate proceedings
Having a Will does not eliminate the need for probate proceedings, nor does the lack of a Will always require probate. Additionally, not all property owned by a person at death is subject to the probate process. Florida has a less formal summary administration process for estates having a value less than $75,000.00 without real estate, or if there is only a small amount of personal property valued at less than $2,500.00 it can be distributed without any administration. The determination as to when probate is necessary, usually starts with the type of ownership the decedent had over the property. The three most common types of ownership, other than sole ownership, include: tenancy by the entireties, joint tenancy, and tenancy in common.
Only spouses can own property as tenancy by the entireties. When property is owned as tenancy by the entireties, as is generally assumed when property is owned by a husband and wife, then when one spouse dies the other surviving spouse becomes the sole owner. The property does not need to go through probate. Recording a certified death certificate with the local clerk of court is sufficient to show the property is then owned by the surviving spouse. It may also be necessary to record an affidavit of continuous marriage to confirm that the marriage was continuous through the date of the spouse’s death.
When two or more unmarried persons own property together, it can be held as joint tenants with right of survivorship, or as tenants in common. Whereas a tenancy by the entireties is assumed in the case of a married couple, a tenancy in common is assumed between unmarried owners unless title to the property specifically states it is held with rights of survivorship.
As joint tenants with right of survivorship, the surviving owner will own the property upon the death of the joint owner. Again, all that is required to show the change from joint to sole ownership is the recording of a certified death certificate.
As joint tenants in common, each joint tenant leaves his or her share of the property to his or her heirs or beneficiaries, and the death of a joint owner in common does not eliminate that decedent’s ownership interest.
These forms of ownership can occur with bank accounts, automobiles, real property, and various other assets. In the case of bank accounts, including but not limited to savings accounts, checking accounts, stocks, bonds and various other financial assets, the form of ownership is generally determined at the time the account is opened, or upon submitting the necessary documents required by the financial institution to make changes to the account ownership. In many instances, accounts can be designated “pay on death” or “transfer on death” to a specific person or entity. Again, this is usually designated at the time the account is opened or via change in ownership or beneficiary forms. Upon the death of the primary account owner, the account would then transfer to the designated pay on death or transfer on death beneficiary. Accounts can also be set up as co-ownership accounts where again, upon the death of a co-owner, the surviving owner would become the primary account holder. Generally, all that is required to transfer ownership of a joint or pay on death account is to provide the bank or financial institution with a certified copy of a death certificate, again making probate unnecessary.
Property held in a Revocable or Irrevocable Trust would also not be subject to probate. Technically, when a person transfers assets or property to a Trust, they relinquish title ownership, not necessarily control. The Trust is the entity which holds legal title to the property, and upon the Grantor’s death, the property remains held in Trust and is distributed pursuant to the terms of the Trust. Generally, this does not require court involvement and allows for a more private and confidential transfer of assets upon death.
If a decedent owns property in his sole name alone at the time of death, then unless otherwise indicated above, probate is necessary and will require the appointment of a personal representative to administer the estate and transfer property to the heirs. If probate becomes necessary, then typically the personal representative will be required to hire a licensed Florida attorney. Florida Probate Rule 5.030 requires that a personal representative be represented by an attorney, unless the personal representative is an attorney or the sole interested person as decided by the Court. Good probate attorneys don’t typically come cheap and while it certainly won’t help my probate practice, I would always recommend establishing an estate plan designed to avoid probate.
If you are having trouble determining whether a formal probate administration is necessary, or have questions about the type of estate planning that can be done to avoid probate, contact an experienced Florida estate planning and probate attorney at the Law Offices of Christopher P. Taylor. The first consultation is always free.