Probate

Most assets will pass through probate unless an asset has a designated beneficiary (for example, a life insurance policy, “Payable Upon Death” or “Transfer on Death” account), is titled in the name of a trust, or is a jointly owned asset with survivorship rights.

For large estates that have numerous assets, businesses, or properties, unless you have the assistance of an experienced probate attorney, administering it can quickly become overwhelming.

Assets that pass outside of probate do not require court supervision in order to be transferred to a decedent’s heirs or beneficiaries.

If you are unsure whether an asset must go through probate, talk to an experienced probate attorney to find out.

In Florida, the personal representative, (known in other states as the “executor/executrix” or “administrator/administratrix”) is the person or entity appointed by the probate judge to administer decedent’s estate. As such, the personal representative is a fiduciary of the estate and has a number of duties to perform. The personal representative is responsible for gathering all of  the decedent’s assets, paying creditors, and distributing the property amongst the heirs/beneficiaries.

Before you can serve as a personal representative in Florida, you first have to meet Florida’s statutory requirements.

Because the personal representative has a number of duties to perform and can be personally liable for failing to perform those duties, anyone serving as a personal representative should hire a probate attorney to assist in the administration of the decedent’s estate.

An experienced probate attorney will tell you that avoiding probate is almost always desirable.

Probate is a time-consuming and expensive process. Among other things, it requires giving notice to creditors , petitioning the court, locating beneficiaries and assets, distributing all assets, accounting to the beneficiaries, providing a final accounting to the court, paying taxes, and much more.

A revocable trust, on the other hand, is a flexible estate planning tool that can avoid probate. It is a legal document that allows you to determine how your assets will be handled during your lifetime and after your death or incapacitation. A revocable trust can be modified or terminated at any time during your lifetime. At your death, assets properly transferred to the trust will be distributed by the trustee or substitute trustee to your beneficiaries or heirs after paying all claims and taxes —without having to go through the probate process.

A Florida probate attorney can help you determine whether a revocable trust is right for you.

A revocable trust, also commonly referred to as a “living trust” or “trust agreement,” is a legal document that explains how your assets should be managed during your lifetime and after your death or if you should become incapacitated.

The person who creates the document (usually you) is known as the “grantor” or “settlor.” The trust is “revocable” because it can be modified or terminated at any time during your lifetime —as long as you are not incapacitated.

There are also “irrevocable” trusts, but these are used for very specific purposes. Probate attorneys generally use revocable trusts 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 distributing the assets to your beneficiaries according to the terms of the trust agreement.

There are usually no federal income taxes imposed on a revocable trust during the grantor’s lifetime. During your lifetime, the trust will use your social security number as its tax identification number, and all trust income and deductions will be reported 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 that the decedent had an interest in at death are subject to the federal estate tax. However, there are ways a probate attorney can properly draft your trust agreement to minimize the effect of estate and income taxes.

Trusts set up for children or loved ones with disabilities (“Special Needs Trusts”) must be carefully drafted to prevent the reduction or elimination of government benefits such as Medicaid or SSI. If you have a loved one with disabilities, speak with an experienced probate attorney.