People who own large estates, especially those with valuable non-exempt assets worth over $75,000, may worry about what will happen to their estate during the formal estate administration process. Probate is notoriously lengthy and costly. Your loved ones may have to wait months or even years for your personal representative to settle the estate affairs and distribute the inheritance accordingly.
Any asset you own could be subject to probate in Florida, except for life insurance payouts and retirement accounts. Fortunately, you can use estate planning tools to help your loved ones avoid probate.
The estate planning tools
Estate planning is the process of establishing a set of legal instructions to provide for your care and the care of your estate in the event of disability and death. It can also allow you to directly transfer assets to your loved one and bypass the probate process. Here are estate planning instruments you may want to consider:
- Payable-on-death (POD) designations
- Transfer-on-death (TOD) designations
- Living trusts
- Enhanced life estate deeds or Lady Bird deeds
- Jointly owning property with rights of survivorship
- Homestead Property
Bank accounts, vehicles and real estate are some of the most common assets subject to probate. But did you know that even your furniture, jewelry, clothing and artwork may also pass through the process? By designating beneficiaries and incorporating rights of survivorship to property, your assets will transfer directly to your loved ones without probate.
Each estate planning tool is different
Each estate planning tool above serves the same purpose: to ensure that your assets will go to the person or entity of your choosing directly and smoothly after your death. However, they also each have their own set advantages and disadvantages. You must understand each one thoroughly to maximize their benefits. More importantly, you must fulfill all the applicable legal and financial requirements so they remain enforceable and valid even when you are no longer around.
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