Settling an estate through the probate process is not always a positive experience. Many individuals and their affected survivors want to protect as much family wealth as possible, and probate can make some assets vulnerable. Luckily, there are a few legal instruments that can be established to provide asset protection, and having an experienced Stuart probate attorney like the attorneys at the Sherrard Law Group can be a very valuable advantage. Here are a few steps that can be taken before an untimely death occurs to avoid exposing assets, limiting tax responsibilities, and making yourself vulnerable to probate litigation.
The first method of avoiding the probate process is setting up a living trust that effectively distributes real and/or personal property before death. A trust designates a trustee, which can still be the individual establishing the trust. The trust may be revocable, which allows the modification or revocation of the trust during the lifetime of the person establishing the trust. However, there will be no effect on avoiding an estate tax, if one is due, because of the revocability of the trust. Irrevocable trusts transfer ownership of the property completely to the trustee other than the current asset holder, but, once established and funded, no modifications can be made, nor can it be revoked. This method may avoid estate tax, if an estate tax liability exists, but it can be tricky, and it is always important to have an experienced probate lawyer and accountant involved to ensure that the trust effectively protects the assets funding the trust.
A last will and testament works well for many individuals when it is comprehensive and executed with all of the required procedures to ensure that it is legally binding. Failure to follow the statutory requirements of execution of the will can render the will invalid. Florida law also permits a separate writing for distribution of tangible personal property, if it Is referenced in the will. This allows the Testator to change the distribution of designated tangible personal property outside the will without having to redraft the will or draft a codicil, thus saving fees and costs.
Titling property as husband and wife or as joint tenants with right of survivorship causes the property to pass to the survivor at the instant of death without the need for probating that property. Also, providing primary and/or secondary beneficiaries for any account that permits the designation of a beneficiary (i.e. life insurance, 401k, etc.) allows for that asset to pass to the designated beneficiary (ies) without the need for probate. In addition to titling bank accounts, certificates of deposit and other stock or financial accounts as joint with right of survivorship, you can keep the account in the sole name of the owner, but provide that the account is “payable on death (POD)” or “transferred on death (TOD)” to an individual or individuals and those accounts will pass to the named individual(s) upon death without requiring probate.
The above information is effective in avoiding probate, but it is always important to have an experienced attorney and often an accountant to guide you in the process and to clarify any issues that are unique to your estate plan. Please consider using the services of the Sherrard Law Group in your estate planning needs. Contact us today!