Not Every Asset Goes Through Probate

You may know that, at a very basic level, all assets of a deceased person go through the probate court, as part of the deceased’s estate and are eventually distributed in accordance with a will, estate plan, or in the absence of any of those, pursuant to Florida’s intestacy statutes.

But when we say “all assets,” that isn’t exactly true. There are some assets that the probate court never touches, and which never become part of the estate of the deceased. Because they don’t go through probate, they also don’t count towards the value of the estate, for the purposes of figuring out what kind of probate case (standard or summary administration) you might need.

Non-probated assets fall into three major categories.

Trusts

One benefit of establishing a trust is that assets in a trust, don’t go through probate, so long as the trust is established and funded before death.

These assets are technically not in the deceased’s name, they are owned by the trust, and there are already instructions in the trust, as to who gets those assets and how they’re distributed.

Because assets in a trust aren’t handled by a probate court, family or friends left out of the trust, may have a hard time challenging your estate in the probate court, although it can be done.

Automatic Transfers

Any asset that is titled in more than one person’s name, and which has an automatic transfer to them, will avoid probate court.

Some assets automatically, by operation of law and without having to do anything, automatically become the property of a co-owner when one owner dies. Think of a home where two people own it as tenants in common with a right of survivorship, or a bank account titled in two names.

These accounts generally will transfer to the other owner immediately upon death–that means that they cannot also be part of the probated estate.

This is actually a mistake that many people make–they will leave co-owned property to someone else in a will, not knowing that the property will automatically transfer to the other owner immediately, even if it is in opposition with something to the contrary written into a will.

Property with a Previously Designated Beneficiary

Some property specifically allows you to designate who gets the property on your death. You may have, for example, opened a payable on death account at a bank, or you may have a life insurance policy with a named beneficiary.

Death of a Beneficiary

In many of these situations, where these assets are not subject to the probate court, they can be, if the beneficiary, co-owner, or designated person who is supposed to get the property, were to pre-decease you or suffers from some kind of incapacity at the time of death.

Questions about your probate case? Call the West Palm Beach probate law attorneys at The Law Offices of Larry E. Bray today.

Source:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0732/Sections/0732.402.html