Your estate doesn’t necessarily have to go through probate. In simplified terms, if you pass away without a will or trust in place and have assets solely in your name or have no beneficiary listed, your estate likely will have to go through probate. On the other hand, if you engage in some simple estate planning, you likely will be able to structure your estate so that there is no need for your estate to go through probate after your death.
Different types of assets or property are structured so that they don’t have to go through probate. If your estate is composed of these non-probate assets, then your estate won’t need to go through probate. Therefore, if you want to avoid probate, your objective should be to own all non-probate assets to the extent possible.
Life Insurance Policies
When purchasing a life insurance policy, you typically name a beneficiary or multiple beneficiaries. Your beneficiary is the person you designate to receive the life insurance policy proceeds after your death. Since your life insurance policy already has a named beneficiary, it doesn’t need to go through probate.
401(k) Plans, IRAs, Pension Plans, and Other Retirement Accounts
Like life insurance policies, 401(k) plans and other retirement accounts require you to name one or more beneficiaries when you open them. You also can change these beneficiaries at any point during your life. Since retirement accounts have named beneficiaries, they also pass outside of the probate process to your beneficiaries.
Depending on the situation, bank accounts may or may not be probate assets. For example, if you own a bank account at your death solely in your name, then it typically must go through probate for your heirs to inherit the money in that account. However, in some cases, a bank account can be a non-probate asset, such as if:
- It is a joint account with one or more other persons.
- It is an account with a payable-on-death or beneficiary designation.
If your home or other real estate is titled solely in your name, it must go through probate upon your death. However, if you hold the real estate jointly with one or more other people, the real estate is a non-probate asset, and the title will automatically pass to the joint owner or owners upon your death.
One way to ensure that your assets don’t go through probate is to create a living trust. A trust allows you to transfer all your property to a third party on behalf of your designated beneficiaries. You can designate a trustee to take over the trust upon your incapacity and/or death. The trustee then will disburse the trust assets to your beneficiaries as per the terms of your trustee without having to go through probate.
Intestacy, or Dying Without a Will
When you own probate assets and die with a will in place, your will determines how your assets are distributed. The probate process ensures that your assets are distributed according to the terms of your will.
However, if you die without a will or trust in place, then you die “intestate.” Florida’s laws of intestate succession found at Florida Statutes §§732.101 et seq., set forth how a person’s assets are distributed to their heirs upon death in the absence of a valid will or trust. While these laws can be complex, assets are generally distributed to the deceased’s closest relative first. For instance, the deceased’s spouse may receive one-half or the entire intestate estate, depending on the circumstances.
Call Us Today for Assistance with Your Estate Planning Needs
At Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A., we offer comprehensive estate planning services so that we can minimize the need for probate proceedings in your estate. However, we also offer the full range of estate, probate, and related services when your loved one passes away. We are here to help your family navigate the complex legal problems that often arise after the loss of a family member in the most efficient manner possible. Call us at (954) 966-2112 or find out more about our legal services online. Set up a time to talk to us about your legal needs today.