Probate is the legal process of transferring property of a deceased person, called a decedent, to their heirs or beneficiaries. Whether the decedent had a will or not, probate is still necessary if the decedent dies with “probate assets.”
The length of the probate process may vary. On average, probate takes between six and twelve months to complete if no Federal estate tax return must be filed.
Attorney Samantha J. Fitzgerald specializes in Florida Probate and Estate Law. Her team can help your family navigate this difficult process with care and compassion. Call us today at (954) 580-3690 with any questions, or complete the easy form below and we’ll call you to set an initial consultation.
All assets are subject to probate unless they name a designated beneficiary (such as POD or TOD accounts), are jointly owned with rights of survivorship or are titled in a trust. Assets that pas outside of probate are not controlled by a will or Florida’s intestate statutes.
The personal representative, also known as the executor, is appointed by the courts to oversee the probate process of the decedent. It is their duty to gather the decedent’s assets, pay creditors, and distribute the property amongst the heirs/beneficiaries.
Among other duties, the personal representative must notify any ‘known or reasonably ascertainable’ creditors of the probate proceeding. Once this has been sent, creditors will have three months to file a claim with the probate court.
Although probates can cut off creditor claims sooner, a probate can be expensive and time consuming, especially if the decendent owned property in multiple states. Having a revocable trust in place is a faster and cheaper alternative than a probate. Also, having your assets go through the probate process may cause disputes amongst your heirs.
A revocable trust, also commonly referred to as a living trust or trust agreement, is a document that explains how your assets should be managed during your lifetime and after your death. The creator of this document, which is usually you, is known as the “grantor” or “settlor.” The trust is “revocable” because you may modify or terminate the trust agreement at any time during your lifetime, provided you are not incapacitated. “Irrevocable” trusts are sometimes used, but for very specific purposes. Revocable trusts are more common for traditional estate planning.
The person who carries out the terms of the trust and manages the trust assets is known as the “trustee.” You can serve as the initial trustee, or you can appoint another person, bank, or trust company to do this for you.
Upon your death, the trustee (or your successor if you served as trustee) is responsible for paying certain claims and taxes, and then distributing the assets to your beneficiaries according to the terms of the trust agreement.
During the grantor’s lifetime, there are usually no federal income taxes for a revocable trust. The trust will use your social security number as its tax identification number, which will report the income and deductions directly on your individual income tax return.
Once a revocable trust does not report income under your social security number, it will become a separate entity for federal income tax purposes. If this happens, the trustee must file an annual fiduciary income tax return. The terms of the trust will determine who is responsible for paying income tax on the trust income.
It is a common misconception that revocable trusts save estate taxes. All assets which the decedent had an interest in at death are subject to the federal estate tax. However, there are ways to draft your trust to minimize the effect of estate and income taxes.
Children or loved ones with disabilities may need to have a special needs trust, which may prevent the reduction of government benefits such as Medicaid or SSI.