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Understanding Florida Probate: What You Need to Know
The Florida probate process starts when you pass away and a petition for administration is entered in the probate court. Probate is needed to retitle assets upon your death. However, not all assets pass-through the Probate. Only Probate assets are administered during the Florida probate process.
Probate assets are those assets which you own individually or with someone else, without having a beneficiary designation. Examples of probate assets include investment homes and businesses owned by you under your own personal name.
On the other hand, assets that have a beneficiary designation usually do not pass through Florida probate. Usually bank accounts, investment accounts, life insurance, and other financial institutions will provide you with a beneficiary designation form, whereas you provide who will inherit the funds upon your death.
However, if the beneficiary you assign passes away before you do, and no successor beneficiary is selected, then an administration would have to be started in Probate court in order to transfer the money to your rightful heirs.
It is important to understand the distinction between probate and non-probate assets. Many people make the mistake and draft a Florida Last Will and Testament bequesting everything they own to their selected beneficiary, to later find out that the beneficiary under their last will and testament will not be inheriting the funds. This is because if your beneficiary designation under your bank account is someone different than your beneficiary under your last will and testament, then the beneficiary under your bank account will receive all the funds.
The reason for this outcome is that the relationship between you and the financial institution is contractual nature. This means that the financial institution is contractually obligated to pay the beneficiary you selected under the beneficiary designation you selected.
Remember what I mentioned at the beginning, probate asset are those assets that are owned personally by you without a beneficiary designation. In the previous example, the bank account would not be a probate asset because a beneficiary was chosen.
The Florida last will and testament is only effective to transfer probate assets. A last will and testament is not effective until you pass away, and your last will and testament is deposited with the probate court, and a judge orders the will admitted.
If you create a last will and testament, you will have the opportunity to select the beneficiary or beneficiaries who you wish to inherit your probate assets. However, if you don’t create a last will and testament, then the State of Florida will select who your beneficiaries would be on your behalf. This selection might be your intended outcome, but this is not always the case.
With proper planning, you can avoid Florida probate and transfer your assets to your beneficiaries without having to go through an expensive and lengthy probate process. However, if you fail to properly plan, selecting a Florida attorney who will walk you through every step of the process is a must.
If you would like to find out more, please free to call my office at (305) 489-1415. Consultation is always free and I would be happy to answer any questions and concerns you may have.