If you are thinking about estate planning or already started, you likely have run into the term probate. This is a legal process in court that can devolve into litigation.
As a result, the probate process can quickly become a costly and time-consuming process. Plus, it is public, so anything potentially negative or secrets that your family may not want revealed could be revealed. This is why many Floridians look for ways to avoid probate in their estate plan.
Designated beneficiaries
One of the ways to avoid probate is to designate beneficiaries on your accounts that allow for this. Often, most of your assets have these transfer-on-death or payable-on-death features that allow you to name a beneficiary who will automatically receive the assets in the account when you pass.
These assets in your bank account, brokerage account, retirement account, life insurance policies, etc. are automatically transfer outside of probate, and you can change your designations at any time while you are alive.
Lady Bird deed
In Florida, an enhanced life estate deed is known as a Lady Bird deed. It is a special deed where you keep the home while you are alive, but it names a beneficiary upon death. Lady Bird deeds also allow you to sell the property, mortgage it or even gift it during your lifetime without affecting your beneficiary’s interest. And, you can revoke or change it at any time while you are alive.
Living trust
Living trusts (revocable trusts) are another estate planning tool that avoids probate. These trusts allow you to transfer your assets to the trust for your benefit while you are alive, but after your death, they become for the benefit of your beneficiaries. This avoids probate because the owner of the assets is the trust, not you. During your life, you can even name yourself as the trustee. This means that you would manage the assets completely, but you would need to name a successor trustee for when you pass.
Joint tenants with right of survivorship
If you own property, you can own it as joint tenants with right of survivorship with another person, usually a spouse or child. In this means that you both equally own the property, but when one of you dies, the surviving tenant automatically inherits the property outside of probate. The key takeaway here is that you can craft an estate plan that avoids probate.