In an ideal world, our court system works just fine. If someone dies, the surviving family members can avail themselves of the taxpayer-funded courts. The courts, chock-full of legally trained lawyers and judges, will work diligently to look at the relevant factors to ensure that the deceased person’s assets, with or without a will, are distributed fairly and according to law. That’s the ideal world. Unfortunately, we do not live in an ideal world.
Formal Administration of Probate
In reality, the probate process can be difficult indeed. If you have ever gone through the probate process for a deceased family member, you are likely aware of the challenges that you face at all steps down the line. That said, four major disadvantages really come to the fore with the formal administration of probate: cost, time, privacy, and control.
- Cost. Court filing fees, appraiser’s fees, personal representative’s fees, and attorney’s fees all add up to create a significant cost for any administration of probate. Of course, all or most of that cost will be taken from the decedent’s estate. Thus, the fruits of a lifetime of work can be significantly reduced by all of the costs just trying to administer the decedent’s assets.
- Time. As we all are likely aware, any court proceeding takes an enormous amount of time. Court dockets are clogged and court personnel are doing their best to move cases, but any probate will invariably take time. That means a lot of time not knowing how things will end up, and a long time before beneficiaries can receive the assets of a decedent’s estate. Typically, the probate process can take a minimum of six months, sometimes it could take as long as two years.
- Privacy. Any will offered to probate becomes a matter of public record. If your family is well known, or simply wishes to keep their financial matters private, that becomes particularly difficult during the formal administration of probate.
- Control. Even though a personal representative is named to administer aspects of a will, virtually all of the personal representative’s decisions on the estate’s behalf must go through court approval. In sum, a deceased family loses a considerable amount of control over decisions once probate has begun.
Given all of these drawbacks, one can easily see that avoiding a formal administration of probate might be something worth investigating further.
In fact, under Florida law, there are two ways in which someone can avoid a formal administration of probate. The first is by creating a revocable, or “living,” trust, and the other is called a “summary administration.” Let’s discuss those two alternatives in more detail.
Alternative #1: The Revocable Trust
A revocable trust is an agreement that you can create to (i) manage your assets during your lifetime, and (ii) distribute the remaining assets after your death. The creator of a revocable trust is called the “grantor,” and the person responsible for managing the trust’s assets is called the “trustee.”
The term “revocable” means that you can modify or terminate the trust at any time during your lifetime, provided that have the capacity to do so. If you become incapacitated during your life, the trustee has the authority to continue to manage the trust assets, pay bills, and make investment decisions on behalf of the trust.
A revocable trust is a vehicle to avoid probate. Because the formal administration of probate is a way to distribute the assets owned by the deceased, the revocable trust avoids probate because you, as grantor, transfer the assets you own into the trust. Thus, when you die, the assets in the trust are not technically owned by you. Rather, those assets you transferred into the trust are owned by the trust.
There are, of course, some tax issues that come with transferring assets into a trust (also known as “funding” a trust). Therefore, you should be sure to consult with an experienced Wills & Trusts attorney to determine which assets are appropriate for trust ownership.
All that being said, you may want to talk to an attorney at Doane & Doane to gain a better understanding of revocable trusts. Given the disadvantages of probate, it may be well worth your while to call us at 561-656-0200 to see how creating a trust could minimize the drawbacks for your family that come with the formal administration of probate.
Alternative #2: Summary Administration
Another way to avoid the formal administration of probate is to go through what Florida law calls a “summary administration.” A summary administration is typically a one-day process that makes probate much less expensive, less time consuming, and easier all around.
To be eligible for a summary administration Florida law, one of two things must be present:
- The value of the decedent’s entire estate up for probate is $75,000 or less, or
- The decedent must have been dead for more than two years.
Similar to a formal administration of probate, a Florida summary administration starts with a petition in court. The petition may be filed by a beneficiary or the decedent’s personal representative, and it must be signed by a surviving spouse, if any. The court then reviews the petition to see that it qualifies for summary administration. If so, then the court orders immediate distribution of the assets.
The catch here, however, is that if the deceased has a last will and testament, then that document takes it out of summary administration, and the estate must go through a formal probate process.
Florida’s Top Probate & Trust Administration Attorneys Are Ready to Help You
The board-certified West Palm Beach Probate Attorneys at Doane & Doane, P.A. have extensive experience helping clients navigate the challenging waters of probate administration in Florida. Our expert attorneys not only have the legal acumen to handle your case, but are certified public accountants as well. Our unique combination of skills, resources, and experience will help you with any probate or trust matter you may have. Call us at 561-656-0200 to learn more about how we can help you effectively manage your assets.