What is probate and can you avoid it?

First, what is probate? Probate is a court-supervised process for identifying, gathering and transferring the assets of a deceased person (decedent). The first step involves paying the decedent’s debts and then the decedent’s assets are distributed to to his or her beneficiaries.

In general, the decedent’s assets are used first to pay the cost of the probate proceeding, then are used to pay the decedent’s outstanding debts, and the remainder is distributed to the decedent’s beneficiaries.

Assets subject to the Court’s probate administration are only probate assets. But, not all assets are probate assets. There are ways that assets can be titled and/or owned that would make them non-probate assets. We can assist you in this.

 

The purpose of probate is to tie up loose ends, pass ownership of the decedent’s probate assets to the decedent’s beneficiaries and pay the decedent’s creditors, if necessary. It is the process that officially transfers legal ownership.

Many people tell us — but I have a will. A will does not avoid probate. If the decedent left a valid will, unless the will is admitted to probate in the court, it will be ineffective to pass ownership of probate assets to the decedent’s beneficiaries. The will must be submitted to the court within ten days of the decedent’s death. Depositing the will with the court does not cost anything, but there is a court fee to open a probate. (This lack of privacy of a recorded will is just one reason people sometimes look for alternatives to wills.)

In the previous blog post, we discussed, “What is a will? And do you need one?” But basically, a will is a written document that is signed by decedent and witnesses. A properly drafted and executed will allows a decedent to name a personal representative, the person who will administer and ensure the decedent’s intent is carried out, and also allows the decedent to name their beneficiaries. Thus, a properly drafted and properly executed will allows a decedent to circumvent Florida’s distribution formula to one that meets their specific wishes. In other words, without a will, the state determines how the assets are distributed.

If the decedent did not have a valid will, or if the will fails in some respect, the Court (via state statute) will determine how the assets will be distributed and who the personal representative will be. If there are no heirs, the state of Florida will take the decedent’s assets. This is rare, as most people have some surviving heir, even if distant.

A circuit court judge will oversee probate proceedings. the judge will making a ruling as to whether the decedent’s will is valid or if there is not a valid will, the judge will determine the decedent’s heirs.

If the decedent had a will that nominated a personal representative, the judge will also decide whether the person or institution nominated is qualified to serve in that position. If the nominated personal representative meets the statutory qualifications, the judge will issue ‘Letters of Administration,’ also referred to simply as ‘letters.” These “letters” are important evidence of the personal representative’s authority to administer the decedent’s probate estate.

If any questions or disputes arise while administering the decedent’s probate estate, the judge will hold a hearing as necessary to resolve the matter in question.

One of the primary purposes of probate is to ensure that the decedent’s debts are paid in an orderly fashion. The personal representative must use diligent efforts to give notice of the probate proceeding to ‘known or reasonably ascertainable’ creditors. Creditors who receive notice of the probate administration generally have three months to file a claim against the estate. The personal representative, or any other interested persons, may file an objection to the statement of claim. If an objection is filed, the creditor must file a separate independent lawsuit to pursue the claim.

So, probate can be a lengthy and complicated process. But, yes, there are ways to avoid probate and we can help. Make an appointment today. We can review your assets and plans and help you determine the plan that best suits your needs. And, we’ll help you execute it.