There is a misconception that when a person dies, all their assets are immediately divided among the heirs named in the will. This is far from the truth.
Instead, the estate passes into probate, the legal process of managing the assets. Depending on the size and complexity of the estate, it could take months, or even years, before the estate is settled. It is such a time-consuming affair that many people wonder if there is a way to avoid probate and ensure their loved ones receive their inheritance in a timely manner.
The probate process
Florida’s probate process involves many steps:
- The will is filed with the probate court where the deceased lived. For Miami residents, that would be the Miami-Dade Clerk of Courts.
- Once the will is determined to be valid, they will officially appoint an executor (typically named in the will).
- The executor notifies the creditors and beneficiaries
- The estate’s assets are inventoried
- Outstanding creditor claims are settled, along with final expenses and the final tax return.
- After settling all of the financial obligations, the remaining assets can be distributed to the beneficiaries.
In addition to the expense and length of time, the estate becomes a public record, making everyone privy to the deceased’s financial situation.
However, through strategic planning, you keep your estate out of probate:
- Real estate and bank accounts can be held in joint tenancy. Upon one person’s death, everything is automatically transferred to the survivor.
- Life insurance policies, 401(k)s and other investment accounts allow the account holder to name a beneficiary using payable-on-death (POD) instructions to pass assets directly to the named beneficiaries.
- Living trusts allow the grantor to place assets in the trust to be managed and distributed to the beneficiaries upon death, depending on the trust’s terms.
Avoiding probate requires a lot of thought and planning. To ensure you have all your bases covered and your plan is compliant, you will want to work with someone who understands the legalities surrounding the probate process.