May 21, 2010

Florida Probate and Wills: Much Misunderstood Concepts

Little wonder many Florida residents don't understand what Probate  is all about. Probate, Wills and yes, death, are topics most of us prefer to avoid. But what you don't know about Probate -- or what you think you know but really don't! -- can botch up your estate plan and hurt your family after you're gone. So here's a primer on Florida Probate to help you make informed estate planning decisions. I promise, this will take just a moment and won't hurt a bit!

What is Probate? This is the process by which the Probate Court supervises the distribution of a deceased person's assets. The Probate Court works with the Personal Representative(s) named in your Will in order to make sure your creditors' claims are met, and your beneficiaries paid according to the terms of your will.

What if my estate is not subject to federal estate tax?  The size of your estate - and therefore its tax status - is unrelated to Probate. The determining factor in whether your estate is probated is the estate planning strategy you have set up ahead of time, NOT your estate's tax status. Thus, small, non-taxable estates may be probated, whereby large, taxable ones may not. What matters  is the advance planning that you do. (At this writing, there is no federal estate tax. However, it is widely expected to return by 2011)

What if I have a Will? Having a Will is not a probate avoidance strategy. Other strategies - for example, a revocable trust - may be used in certain circumstances to avoid probate.

What if I do not have a Will or any other estate plan in place? No one dies without an estate plan in Florida, because the state has a plan if you die "intestate." Your estate will go to the Probate Court and your assets distributed in accordance with Florida law. 

Why Would I Want My Estate to Avoid Probate? Today, probate avoidance is the goal of many Florida residents who are planning their estates. There are a variety of reasons for this. Among them:

1. Expense: Probate can be expensive. There will be legal fees, administrative fees that will deduct monies from the estate you'd probably prefer to go into your beneficiaries' pockets. 
2. Lack of Privacy: When your Will is filed with the Probate Court, it becomes a matter of public record. It then can be viewed by anyone who cares to look at it and find out what you've left and to whom. Many people find this lack of privacy distasteful. If this is how you feel, you will want to talk to a Florida Certified Elder Law Attorney about how to keep your estate out of Probate.
3. Inconvenience: Probate can be time-consuming and a hassle for your heirs. For the relatives of Florida residents, many of whom live out of the state, Probate can be particularly burdensome.
4. Taxes: When the federal estate tax returns, as is anticipated for 2011, a married couple with a taxable estate will pay unnecessary estate taxes if they fail to adopt probate-avoidance strategies like  a Credit Shelter Trust (also known as a Bypass Trust or AB Trust).

Is Probate always a bad thing? Actually, no. There are certain financial and family circumstances when it can even be desirable. To make an intelligent decision and set up the best estate planning strategy, see your Florida Certified Elder Law Attorney.

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