What Assets Cannot Become Part of a Probate Estate in Miami?
When a person passes away in Miami, their estate typically goes through the probate process to distribute their assets to the rightful beneficiaries. However, not all assets need to go through probate. Some assets can avoid the probate process and pass directly to beneficiaries or heirs. In this blog, our experienced probate lawyers at Morgan Legal Group PLLP will explain which assets cannot become part of a probate estate in Miami and how they can avoid probate.
What Is Probate?
Before delving into the assets that avoid probate, it is essential to understand what probate is. Probate is the legal process by which a deceased person’s assets are distributed to their beneficiaries or heirs. The court oversees this process to ensure that the deceased person’s wishes, as outlined in their will or according to Florida’s laws of intestacy if there is no will, are carried out correctly.
Assets That Avoid Probate in Miami
Several types of assets can bypass probate and pass directly to beneficiaries or heirs. These assets include:
1. Assets with Designated Beneficiaries
Assets that have designated beneficiaries automatically pass to those beneficiaries upon the account owner’s death. Common examples of such assets include:
- Life Insurance Policies: The proceeds of life insurance policies go directly to the designated beneficiaries.
- Retirement Accounts: Assets in retirement accounts, such as 401(k)s and IRAs, pass directly to the named beneficiaries.
- Payable-On-Death (POD) Accounts: POD accounts, such as bank accounts and investment accounts, transfer directly to the designated beneficiaries.
- Transfer-on-Death (TOD) Securities: TOD securities, such as stocks and bonds, pass directly to the designated beneficiaries.
2. Jointly Owned Assets
Assets that are jointly owned with rights of survivorship automatically transfer to the surviving joint owner(s) upon the death of one owner. Jointly owned assets that avoid probate include:
- Joint Tenancy with Right of Survivorship (JTWROS): When one joint tenant dies, their share of the property passes to the surviving joint tenant(s).
- Tenancy by the Entirety: This form of joint ownership is available to married couples and allows for the automatic transfer of property to the surviving spouse.
- Community Property with Right of Survivorship: Married couples in certain states can hold property as community property with rights of survivorship, allowing for an automatic transfer of the property to the surviving spouse.
3. Living Trusts
Assets held in a living trust can avoid probate. Living trusts are legal entities that hold assets for the benefit of the trust creator (grantor) during their lifetime. Upon the grantor’s death, the assets are distributed to the trust beneficiaries according to the trust’s terms, without the need for probate.
4. Small Estates
In Florida, estates with a total value of less than $75,000 may qualify for a simplified probate process known as summary administration. Summary administration allows for a faster and less expensive probate process for small estates.
5. Homestead Property
Florida’s homestead laws protect a person’s primary residence from creditors and can also exempt it from probate under certain circumstances. Homestead property passes to the surviving spouse or designated heirs without going through probate.
Assets That May Still Require Probate
While the above assets can avoid probate, some assets may still need to go through probate if they do not have designated beneficiaries, are not jointly owned, and are not held in a living trust. These assets include:
- Assets Held Solely in the Deceased Person’s Name: Bank accounts, investment accounts, personal property, and other assets held solely in the deceased person’s name may require probate.
- Real Estate Held Solely in the Deceased Person’s Name: Real estate owned solely by the deceased person may need to go through probate to transfer ownership to the beneficiaries or heirs.
- Business Interests: If the deceased person owned a business, probate may be necessary to transfer ownership or sell the business.
- Intellectual Property: Intellectual property, such as copyrights and patents, may need to go through probate to transfer ownership.
Why Avoid Probate?
Many individuals choose to plan their estates in a way that avoids probate for various reasons, including:
Probate is a public process, and the court records are accessible to the public. By avoiding probate, individuals can keep their financial affairs private.
Probate can be costly, involving court fees, legal fees, and other administrative expenses. Avoiding probate can save beneficiaries money.
Probate can be a time-consuming process, lasting several months or even years. By avoiding probate, beneficiaries can receive their inheritances more quickly.
Through proper estate planning, individuals can retain more control over how their assets are distributed and to whom.
Consult with a Probate Lawyer in Miami
If you want to ensure that your assets avoid probate or if you are dealing with the probate process for a loved one’s estate, it is essential to consult with an experienced probate lawyer in Miami. At Morgan Legal Group PLLP, our probate lawyers have the expertise to help you navigate the complexities of probate and assist you in developing a comprehensive estate plan that meets your specific goals and needs.
Contact Morgan Legal Group PLLP today to schedule a consultation with one of our skilled probate lawyers in Miami. Let us provide the guidance and support you need to protect your assets and ensure your wishes are carried out properly.