Trusts are normally used as part of an estate plan. Trusts help offer multiple benefits to the beneficiaries of a decedent upon death. Such as avoidance of probate as well as potentially avoiding payment of estate taxes. Benefits to the decedent include the ability to control how the trust assets are used even after death. But is it really possible to avoid probate?
Probate Litigation is a process that deals with the estate of a loved one who has passed away. It is not the easiest thing in the world. This process can seem very tiring and overwhelming. So, in this blog, we will help you get a few of your questions answered. When residents or property owners pass away, their death sets into motion a legal process known as probate. Through probate, a deceased person’s assets are distributed to the heirs of his or her estate under court supervision. Probate also involves paying a decedent’s outstanding taxes and debts.
First off, its best to know everything about the situation at hand. There are multiple types of probate. Depending on certain circumstances, the Probate process can be simple and easy or can be exceptionally long.
The probate process can be differentiated in the following ways:
Probate vs. non-probate assets: Only those assets that were solely owned by the decedent at the time of death must go through Florida probate administration. Any assets that are jointly owned or have a designated beneficiary are not subject to probate administration.
Summary vs. formal administration: When an estate is worth $75,000 or less, or the decedent has been dead for more than 2 years, the estate will qualify for abbreviated probate known as summary administration. The estates that don’t qualify for summary administration undergo regular probate or formal administration.
Domiciliary probate vs. ancillary probate: Domiciliary probate is the probate of assets that are in Florida and owned by a decedent who was a Florida resident. Ancillary probate is probate of assets that are in Florida but owned by a decedent who was not a Florida resident.
A simple estate with a clear, uncontested can go through the probate process in just a matter of a few weeks. But there are multiple issues that can complicate probates. These include the lack of a will, a challenge to the will’s validity or meaning, creditor claims, or a surviving spouse’s rights.
Surviving spouses are normally entitled to a share of their deceased spouse’s estate. Even if he or she is not explicitly provided for in the will.
A spouse may be disinherited if the will was made prior to the couple marrying. However, as long as the will was made while the couple was married, the surviving spouse may receive:
Probate begins when the person named in the will as estate administrator presents the will to the probate court. If there is no will, the court appoints someone as an estate administrator, typically the decedent’s spouse or adult child.
Once the will is admitted to probate, the personal representative takes an inventory of estate assets. These include property, stocks and bonds, and business interests. Then, they place them in an estate account. The representative also notifies creditors of the estate and beneficiaries who may inherit estate assets.
Legitimate creditor claims and other estate bills, such as funeral expenses and taxes, are paid from the estate. If the representative thinks certain creditor claims are not legitimate, those claims can be disputed.
After the estate’s debt obligations are satisfied, remaining assets are distributed to beneficiaries according to the decedent’s will. What if there is no will? Florida law determines how assets are passed on.
In a Will, the deceased person selects a person known as the Executor or Personal Representative to handle their matters after they die. A Will also can include specific devices (the left of an item to someone) of miscellaneous assets, make special requests for the handling of minors, animals, and/or those with special needs.
The length of time a ‘Probate’ will take depends on the number of assets and debts in the Estate. Also, the time can vary based on whether there is a Will, whether the beneficiaries can be easily located and whether there will be any dispute as to the validity of the Will or disagreements about the distributions. There are three types of administrations (Disposition without Administration, Summary Administration, and Full Administration). The type of administration depends on the size/value of the Estate, whether the deceased person had any debts and how long it has been since the person passed away.
Surviving spouses in Florida are typically entitled to a share of their deceased spouse’s estate—even if he or she is not explicitly provided for in the will. A spouse may be disinherited if the will was made prior to the couple marrying, but as long as the will was made while the couple was married, the surviving spouse may receive:
The probate process can be differentiated in the following ways:
Probate vs. non-probate assets: Only those assets that were solely owned by the decedent at the time of death must go through Florida probate administration. Any assets that are jointly owned or have a designated beneficiary are not subject to probate administration.
Summary vs. formal administration: When an estate is worth $75,000 or less, or the decedent has been dead for more than 2 years, the Florida estate qualifies for abbreviated probate known as summary administration. Florida estates that do not qualify for summary administration undergo regular probate or formal administration.
Domiciliary probate vs. ancillary probate: Domiciliary probate is the probate of assets that are in Florida and owned by a decedent who was a Florida resident. Ancillary probate is the probate of assets that are in Florida but owned by a decedent who was not a Florida resident.
In the current COVID-19 crisis, more Americans have been thinking about the future- specifically, their mortality. This pandemic has pushed many Americans to write or rewrite their wills. Due to concerns about social distancing, it looks like electronic wills are coming to Florida in 2020.
When a loved one passes and they have a trust, the process of Trust Administration will need to be undertaken. Many attorneys make trust administration sound straightforward at the time their client signs the trust contract without describing completely what will have to be done upon their death. This is problematic as the client also rarely addresses risk policy with the designated Trustee.
The person or persons who will act as Trustees ought to consider what will happen to the person who creates the trust at the time of death. Over the years, our perception has been that clients often have unrealistic expectations of how their trust will work when there is a loss. Clients often believe the trust doesn’t need any more care and it will happen “automatically,” or they don’t know they’re going to need an attorney’s and CPA’s support in administering the trust. These are common misunderstandings. There are administrative responsibilities and costs related to trust administration that must be acknowledged by families and trustees.
One of the most common misunderstandings arises where a husband and a wife have a joint trust and the trust provisions call for the trust to be broken into sub-trusts (most commonly between a Survivor’s Trust and a Bypass Trust). The most frequent reasons for providing this type of trust are succession tax benefits, surviving spouse’s wealth security and divorce-remarriage insurance for the first half of the estate to die.
What’s important to note is that by creating a trust, the person or couple setting up the trust can escape probate (provided the trust is adequately funded) and as a by-product of the estate plan, inheritance tax benefits will result. The method closely resembles probate. It is almost the same; there are just a few small variations including, not having to wait to go through the process, daily or in front of a court.
The three-step process of acquiring asset ownership, settling the assets and providing accounting and delivery can be completed at whatever rate the trustee may have. If properties are quickly liquidated, a trust can be settled in a matter of a month or two. While probate can rarely be done in less than a year and typically takes between 18 and 24 months.
It can take anywhere from two to typically about six months.
Can Someone Handle Trust Administration Without Legal Counsel?
Likely not. However, it’s not a complicated process. There are different notices that need to be issued. Also, there are different procedures that need to be followed for selling properties, and they’d know how to do it. It’s not hard but they need help.
A living trust is an alternative that can be very appealing for estate planning. You transfer the funds into the trust as the grantor. During your lifespan, the trust retains the money. Upon your passing, the estate will be allocated to the beneficiaries according to the wishes and on whatever timeline you want.
If you find yourself in a position where you need to administer a loved one’s will or take care of other issues regarding his or her assets after his or her death, you can suddenly find yourself facing waves of confusion and a massive headache. Relieve yourself from this stress by taking a step back and working with an experienced probate lawyer. Probate lawyers are lawyers who know how to methodically work through all aspects of the probate process to ensure that the deceased’s wishes are upheld and that his or her loved ones receive the assets they were meant to receive.
Probate is the process of submitting and validating a will to the court. Once a will has been submitted, all assets are transferred to their intended beneficiaries and any debts or taxes associated with the deceased’s estate are paid and settled. Once the process is complete, the estate is “closed.”
There are a lot of financial obligations that come up during the probate process, such as debts to be satisfied and taxes to be paid. A probate lawyer can determine which of these are legitimate and which are in error, if any, and make sure that all legitimate issues are resolved. Another reason why working with a lawyer can save you money is that a lawyer can handle the process efficiently. You likely have a full time job and would suffer financially from taking time off to handle the probate process. By outsourcing it to a party who knows how to handle the process, you can save money in the long run.
Disputes can and do arise regarding estates. Examples of these disputes include:
If you do opt to handle the probate process alone, you can still seek guidance from a lawyer to ensure you stay on the right track. Rather than handing the whole case over to a lawyer, you can save money while still receiving hands-off coaching this way. Talk to an attorney to determine whether this or a more hands-on approach is right for you.
As the executor of a loved one’s will, you have the responsibility of ensuring that all aspects of the will are addressed properly so the estate can be closed. This can be overwhelming for many individuals, especially those who are not familiar with the probate process. For guidance with the probate process and representation in probate court, work with an experienced probate lawyer. Contact The Law Offices of Aubrey Harry Ducker, Jr., PLLC today to set up your initial legal consultation with our firm.
