Trust & Probate Administration

Trust & Probate Administration

Probate

             “Probate” is a court process which transfers the assets an individual owns at the time of his death to his heirs or chosen beneficiaries. Heirs and beneficiaries are determined from the  dying individual’s (or a “decedent’s”) last will and testament. If a decedent did not have a last will and testament, then the statutory laws of the State of Florida will determine who receives the decedent’s assets.  Obviously, this result is not ideal. To be sure your assets go to whom you wish at the time of your death, it is important to execute a last will and testament.  If you don’t put your wishes in a last will and testament, the State of Florida will decide your wishes for you.

            In a last will and testament, the Testator, (or the individual writing the will) will state in detail who will receive his assets as well as how and when they will receive them.

            The testator will also name a personal representative or executor. The terms personal representative or executor are used interchangeably, both perform the same role.  A personal representative has the duty to ensure the decedent’s named heirs receive the property in accordance with the terms of the decedent’s last will and testament. The personal representative also has a duty to  protect the decedent’s assets during the probate process. This includes duties such as identifying the decedent’s assets, securing insurance, selling real estate, keeping real estate in good repair, paying creditors, continuing businesses, identifying assets, and otherwise managing all estate assets during the probate process.

            The personal representative is also the individual who will physically take the original last will and testament to an attorney to begin the probate proceeding. For that first meeting with the probate attorney it is useful to bring the decedent’s original last will and testament, several original death certificates, a list of the nature and value of all known assets, names and addresses of all known creditors of all named beneficiaries and heirs of the decedent.

            A Florida probate attorney will decide the most appropriate type of probate administration to file. There are three types of probate administration in the State of Florida:

  • Formal Administration: A formal administration is for estates having assets valued over $75,000.00. The court will appoint a Personal Representative to administer the estate. Time frame: 6-12 months.
  • Summary Administration: A summary administration is for estates having assets of less than $75,000.00, or when the decedent has been deceased for more than two years. Time frame: 2-4 months.          
  • Disposition of Personal Property without Administration. This type of probate is allowed only if a decedent’s estate consists solely of personal property the value of which does not exceed the amount of preferred funeral expenses and reasonable and necessary medical expenses of the last 60 days of decedent’s last illness. For example, if your father died owning a $5,000.00 checking account and you paid his funeral expenses of $6,000.00, you could apply with the clerk of court to obtain a court order which requires the bank to pay you the $6,000.00 in your father’s bank account. Copies of the any last will and testament, a death certificate, a verified statement, funeral expenses and proof of payment of those expenses will need to be submitted.

            Probate filing fees and attorney fees vary based on each type of probate administration required as well as the nature of the assets owned by the decedent at the time of his death.

            It is important to note that not all assets must be “probated”. For example, IRAs, 401ks, life insurance, annuities, which all have beneficiary designations are not probated. Instead, such benefits are paid directly to the named death beneficiary. For this reason, it is crucial that you your beneficiary designations current to ensure your  assets go to the correct individual. In addition, real property or bank accounts owned jointly with another individual go automatically upon death to the joint owner, no probate is required.

 

Trust Administration

            A revocable living trust is a eliminates the need for probate and provides other valuable estate planning benefits.

             At the time of your death, if you have a revocable living trust and all of your assets have been correctly titled into the name of your revocable living trust then no probate will be necessary. Instead, your successor trustee will administer your trust and distribute your assets in accordance with the terms of your revocable living trust. 

            Another important benefit of executing a trust is that you can instruct your trustee to provide for your personal care and maintain your standard of living during a time when you are physically or mentally unable to manage your assets. In 2020, we are living longer lives than ever imaginable a generation ago. Unfortunately, with that longevity also comes a greater chance of living with a physical or mental disability. Such disabilities or simply prolonged old age can render us unable to make our financial and dispositive wishes known. A revocable living trust provide assurance that if you were to become incapacitated, your wishes are known and a trusted individual,  your successor trustee, can step in as your fiduciary and mange your assets and finances during a period when you are unable to do so.  

            To aid your trustee, he should consult with an attorney to be sure all trust administration steps are handled properly. A trustee is a fiduciary who has a duty of loyalty and trust. If a trustee violates his duties of care, he could face personal liability from the heirs or beneficiaries. This can be avoided by a trustee contacting an attorney to help him administer the trust, complete all required accountings and more importantly have beneficiaries sign appropriate consents and or waivers regarding funds or property they have received from the trust.

            A third bonus of a living trust is that you can add real estate that you own outside of the State of Florida to the trust thereby avoiding an out of state probate of that property. This eliminates the need of you heirs to travel or obtain an out of state attorney to initiate a probate proceeding at your death in order for them to inherit the property. Instead, your trustee can simply divide or sell that out of state property in the manner you direct in your trust at the time of your death.

            Finally, a revocable trust also provides confidentiality, continuity and professional management of assets if you choose a corporate trustee, protection of your beneficiaries’ assets if they should become incapacitated, creditor protection to your beneficiaries, and a vehicle to precisely manage the method and conditions of payments to beneficiaries.

            Planning ahead with a revocable living trust prevents problems and provides peace of mind that your property will be handled during any potential period of incapacity and at your death in accordance with your wishes. It is important to be proactive with your estate planning!