When a person passes away, their assets are usually distributed to their heirs or beneficiaries through a legal process known as probate. However, not all assets go through probate. Some assets are designated as non-probate assets and can be transferred directly to the beneficiaries without going through the probate process.
Here’s what you should know about the differences between probate and non-probate assets in Florida and what those differences mean for probate.
Probate assets are owned solely by the deceased person and do not have a designated beneficiary. These assets typically include real estate, personal property, bank accounts and investments not jointly owned. When a person passes away, their will (or Florida law, if there is no will) determines the distribution of these assets. The probate process involves appointing a personal representative to administer the estate, paying outstanding debts or taxes and distributing the remaining assets to the heirs or beneficiaries.
Non-probate assets pass directly to the designated beneficiary or beneficiaries outside the probate process. These assets are not part of the deceased person’s estate and do not need to go through probate. Examples of non-probate assets include life insurance policies, retirement accounts, payable-on-death bank accounts and property held in joint tenancy with right of survivorship.
Distinguishing probate and non-probate assets
One of the primary differences between probate and non-probate assets is when the beneficiary may receive them after the owner’s death. Probate assets must go through the probate process, which can take several months to a year or more. Non-probate assets, on the other hand, go directly to the beneficiaries, often within weeks of the owner’s death.
Another difference between probate and non-probate assets is the cost of distribution. Probate can be an expensive process, with fees and expenses that can add up quickly. Non-probate assets, on the other hand, usually have lower costs associated with distribution, such as transfer fees or taxes.
Lastly, privacy is another difference between probate and non-probate assets. Probate is a public process, which means that the deceased person’s assets and liabilities, as well as their beneficiaries and heirs, are a matter of public record. Non-probate assets, on the other hand, are private and do not require public disclosure.
Probate and non-probate assets have different distribution processes, costs and levels of privacy. Understanding the differences between these types of assets and planning your estate accordingly is essential. You should talk to a skilled professional to determine the best strategy for distributing assets and helping your loved ones navigate probate for your estate.