Probate and Trust Administration
Probate is the court process by which ownership of a deceased person's assets are transferred to their beneficiaries. Only assets titled in the sole name of the decedent are subject to a probate proceeding. Assets with joint owners and those with a named beneficiary are not considered estate assets and a probate proceeding is not necessary to pass ownership to the surviving joint owner or beneficiary.
Probate can be a lengthy, and sometimes expensive, process because of the formalities that must be followed to protect the rights of estate beneficiaries and creditors. Typically, the probate process lasts 6-12 months, and possibly longer in more complicated estates. Court delays and uncooperative parties can also slow probate proceedings, and it can take months to even appoint a personal representative (i.e., executor) who has the authority to gather and distribute estate assets.
Given the above, we often assist our clients with structuring their assets to "avoid probate," which can drastically reduce the time and expense of passing their estate to the intended beneficiaries, as well as potentially thwart many creditors (who can only make a claim against estate assets). However, there are a number of important reasons why probate is sometimes necessary and even advisable:
If assets are not titled with a named beneficiary or joint owner (for any number of reasons) then a probate proceeding is the only way to pass title to the proper beneficiary.
A person may pass away under circumstances that require opening a probate proceeding to handle wrongful death, medical malpractice, or other such claims on behalf of the deceased person's estate.
Sometimes an individual places their assets in a revocable living trust during their lifetime in order to avoid the need to probate those assets. However, if the trust is not fully funded, and there are assets (such as a forgotten-about bank account) not titled in the trust at death, a probate proceeding is necessary to have those assets placed into the trust for distribution (usually via a "pour over" type of will).
In Florida, most creditors have 2 years from the date of the decedent's death to make claims against an estate or trust. It is sometimes advisable to open a probate proceeding for the purpose of shortening the timeframe in which creditors have to file such a claim. Depending upon the type of creditor, this 2 year claims period can be shortened to only 90 days or sometimes just 30 days. Even if the decedent had all of their assets in a trust at the time of death, and there are no estate assets, a trustee who distributes assets without the creditor-clearing benefits of a probate proceeding risks being personally liable for any creditor claims that may arise within 2 years of death.
Avoiding probate can be catastrophic to beneficiaries or joint owners who have special needs or who receive public benefits (e..g, Medicaid or VA benefits), as inheriting an asset directly can cause them to lose their benefits entirely. Establishing a trust for the beneficiary can ensure they receive the benefit of their inheritance but do not lose their benefits. It is sometimes better to establish such a trust under a decedent's will (as opposed to funding the trust during the decedent's lifetime), even though it will require a probate proceeding in order to set up the trust.
Seeking the advice of an attorney is critical to ensure your estate is structured to maximize the benefit to your intended beneficiaries; and if you are a beneficiary, nominated personal representative, or trustee, you should consult with an attorney who can properly advise you of your rights and responsibilities.
We encourage you to schedule an initial consultation by calling our office at 954-227-7320 or using our online contact form (we will follow up with you within one business day).