If you intend to leave assets to your loved ones, then you probably want a smooth transition of wealth so that your named heirs and beneficiaries can enjoy those assets as soon as possible. Ensuring a smooth transfer can also reduce costs that will otherwise be accumulated during the probate process. Therefore, as you engage in estate planning, you might be wondering what you can do to keep your estate out of probate court.
How to avoid probate when dealing with an estate plan in Florida
Not all estate assets have to pass through probate. On the contrary, there are several estate planning vehicles that you can use to bypass the probate process altogether. Here are some of the ways you can skip probate court and ensure a smooth transfer of assets:
- Pay on death accounts: In insurance policies, bank accounts, and retirement accounts, you can specify to whom assets are to be distributed to upon your passing. While this allows those assets to bypass the probate process, they have some disadvantages. One of the biggest is that some of these accounts may still be subjected to claims made by the initial owner’s creditors, and relying solely on these kinds of accounts can leave the management of your estate, such as paying taxes and wrapping up your final affairs, up in the air.
- Living trust: This type of trust is established during your lifetime, and you can retain control over it to amend or revoke it as you see fit, depending on what type of trust you create. When you pass away, the assets in the living trust automatically transfer to your named beneficiaries. Creditors might still be able to reach these assets when you’re alive, and you might have to retitle property to give ownership of them over to the trust, but this is still an effective way to avoid probate and the costs associated with it.
- Joint tenancy with right of survivorship: When you own property, one way to avoid probate is to ensure that there’s joint ownership of the property with the surviving owner taking full ownership upon the passing of the other owner. This is a quick transfer of ownership, and it may allow the other owner to avoid creditor claims. This will be dependent upon the facts at hand. There are several types of property that can be subjected to this type of ownership arrangement.
- Gifts: The IRS allows you to give several thousands of dollars a year to individuals without incurring a tax penalty. These gifts also aren’t subjected to the probate process, which makes it a quick and effective way to transfer wealth during your lifetime. Many find giving gifts to be beneficial if for no other reason than that they can to see their loved ones enjoy what’s been given to them.
There are other options that you can use to avoid probate. You just need to educate yourself about your options so that you can pick those that are most suitable to your set of circumstances. Don’t be scared of the intricacies and complications involved with these options. Your attorney can help you better understand what you need to do to protect your interests.
Don’t wait to create your estate plan
All too often, Floridians put off estate planning until it’s too late. This puts you, your interests, your assets, and your family at risk. Without strong estate planning, your estate is bound to head into the probate process, which can be costly and highly contentious. To avoid that from happening, you should start your estate planning journey now.