When your loved-one dies, you have a million things to do and it may not even dawn on you to ask the question, “Do I need to open a Probate Estate?” That is, until you go to close a bank account, sell a car, or sell a home.
The reality is this: unless your loved one owned everything in joint name with someone else, there is probably some asset that cannot be passed to someone else without going through some sort of probate process.
What does it mean to be jointly owned?
For example, a husband and wife are both listed on the deed to their home or other real estate located in Florida. Regardless of whether it says “joint tenants with right of survivorship” or “tenants by the entities”, real property titled in the name of a husband and wife passes, upon death, to the surviving spouse.
The same is true of personal property like bank or stock accounts.
Here in Florida, it is a common occurrence to have older people list one or more children on their bank accounts with them. Those assets also pass upon death to the survivors named on the account.
A lot of older Floridians have taken these steps to include their children on their assets. For reasons that are not addressed in this blog, there are tax implications about why this might not be the best estate planning method available, but at least it is some sort of estate planning which takes into account the avoidance of probate.
What is Probate?
Probate is a court proceeding that gives the surviving heirs and/or beneficiaries the right to distribute assets.
Does this include all assets?
Theoretically, all of a decedent’s assets belonged to him/her and they have to be transferred to heirs and/or beneficiaries through probate. However, when we are talking about tangible assets with no titled or deed, there is really no incentive to do so through probate. However, in order to transfer title to a vehicle, someone has to sign the title and, accordingly, a probate has to be opened to either appoint a Personal Representative to sign the title, or a summary administration or lesser probate has to be opened for the court to order who gets title to the vehicle. The same goes for real property. Finally, any bank or stock accounts that are not left “payable on death” to a beneficiary also have to be transferred in some manner, either through formal probate or summary administration.
What is the difference between the various types of probate?
I will write a blog next time which explores the various types of probate in depth, but for now, let it suffice to say that if there are not a lot of assets, summary administration, which is cheaper and less time consuming than formal administration, may be an option. If, however, there are assets more than $75,0000 (exclusive of the homestead), this option is not available and a formal probate administration, which could take 6 months to a year to complete, will be required.
Clear as mud?
If you don’t understand all this, don’t feel alone or stupid. It is complex and not necessarily easy to navigate or understand without a lawyer to help you. Call me if I can help answer your questions. The first consultation is always free!