I. Introduction
Probate is the legal process of settling a deceased person’s estate and distributing their assets to their beneficiaries. Knowing what assets are exempt from probate can help individuals and families plan for the distribution of their assets after death and avoid the time-consuming and costly probate process. This post will provide a comprehensive guide on what assets are exempt from probate in Florida, the purpose of probate, and steps individuals can take to protect their assets from probate.
II. What is Probate in Florida?
Probate is the legal process of settling a deceased person’s estate and distributing their assets to their beneficiaries. The purpose of probate in Florida is to ensure that a deceased person’s debts and liabilities are paid, and their assets are distributed to their rightful beneficiaries. In Florida, probate begins with the filing of a petition for administration with the circuit court in the county where the deceased person lived. The court then appoints a personal representative to manage the estate and oversee the probate process, which includes identifying and inventorying assets, paying debts and liabilities, and distributing assets to the beneficiaries. The probate process can take several months to several years, depending on the complexity of the estate.
III. Assets Exempt from Probate in Florida
Some assets are not subject to probate in Florida and can be transferred to beneficiaries without the need for a probate court proceeding.
A. Jointly Owned Property with Right of Survivorship: Property owned jointly with the right of survivorship passes automatically to the surviving owner(s) upon the death of one owner, without the need for probate.
B. Pay-on-Death Accounts and Transfer-on-Death Registrations: Accounts designated as pay-on-death or transfer-on-death pass directly to the designated beneficiaries upon the account holder’s death, without the need for probate.
C. Life Insurance Proceeds: Life insurance proceeds are paid directly to the designated beneficiaries, without the need for probate.
D. Retirement accounts, such as IRAs and 401(k)s, are generally payable to the designated beneficiaries, without the need for probate.
E. Property Held in a Living Trust: Property held in a living trust can be transferred to the beneficiaries of the trust, without the need for probate.
IV. Asset that Can be Exempted during the Probate Administration in Florida
Some assets come into Probate but are then able to be exempted depending on whether they are devised or shall pass to a protected class. The biggest exemption by far is the Florida homestead, which by operation of law through an Order Determining Homestead status of real property can vest title to heirs free and clear of unsecured creditor claims. Other major exemptions include vehicles and household furnishings and jewelry. Fla. Stat. 732.402 lists the exemptions:
732.402 Exempt property.—
(1) If a decedent was domiciled in this state at the time of death, the surviving spouse, or, if there is no surviving spouse, the children of the decedent shall have the right to a share of the estate of the decedent as provided in this section, to be designated “exempt property.”
(2) Exempt property shall consist of:
(a) Household furniture, furnishings, and appliances in the decedent’s usual place of abode up to a net value of $20,000 as of the date of death.
(b) Two motor vehicles as defined in s. 316.003, which do not, individually as to either such motor vehicle, have a gross vehicle weight in excess of 15,000 pounds, held in the decedent’s name and regularly used by the decedent or members of the decedent’s immediate family as their personal motor vehicles.
(c) All qualified tuition programs authorized by s. 529 of the Internal Revenue Code of 1986, as amended, including, but not limited to, the Florida Prepaid College Trust Fund advance payment contracts under s. 1009.98 and the Florida Prepaid College Trust Fund participation agreements under s. 1009.981.
(d) All benefits paid pursuant to s. 112.1915.
(3) Exempt property shall be exempt from all claims against the estate except perfected security interests thereon.
(4) Exempt property shall be in addition to protected homestead, statutory entitlements, and property passing under the decedent’s will or by intestate succession.
(5) Property specifically or demonstratively devised by the decedent’s will to any devisee shall not be included in exempt property. However, persons to whom property has been specifically or demonstratively devised and who would otherwise be entitled to it as exempt property under this section may have the court determine the property to be exempt from claims, except for perfected security interests thereon, after complying with the provisions of subsection (6).
(6) Persons entitled to exempt property shall be deemed to have waived their rights under this section unless a petition for determination of exempt property is filed by or on behalf of the persons entitled to the exempt property on or before the later of the date that is 4 months after the date of service of the notice of administration or the date that is 40 days after the date of termination of any proceeding involving the construction, admission to probate, or validity of the will or involving any other matter affecting any part of the estate subject to this section.
(7) Property determined as exempt under this section shall be excluded from the value of the estate before residuary, intestate, or pretermitted or elective shares are determined.’
Understanding and taking the appropriate exemptions in a Florida probate proceeding is crucial to ensuring that you and your family obtain all the protections from creditors you deserve under the probate code.
V. Protecting Your Assets from Probate
While some assets are exempt from probate in Florida, other assets may still be subject to the probate process. To protect assets from probate, individuals can take steps to ensure that their assets are transferred directly to their beneficiaries upon their death.
How to Protect Assets from Florida Probate:
1. Creating a Living Trust: A living trust can provide for the transfer of assets to beneficiaries without the need for probate.
2. Naming Beneficiaries on Accounts: Designating beneficiaries on accounts, such as pay-on-death or transfer-on-death accounts, can ensure that the assets are transferred directly to the beneficiaries upon the account holder’s death, without the need for probate.
3. Making Sure Property is Jointly Owned: Owning property jointly with the right of survivorship can ensure that the property passes directly to the surviving owner(s) upon the death of one owner, without the need for probate.
Make sure you consult with an experienced attorney before making changes to your assets as there are many consequences to consider and the changes must be done by a professional and done correctly.
VI. Conclusion
Knowing what assets are exempt from probate can help individuals and families plan for the distribution of their assets after death and avoid the time-consuming and costly probate process. The probate process in Florida can be complex and time-consuming, but understanding what assets are exempt from probate and taking steps to protect assets from probate can help individuals and families ensure that their assets are transferred in accordance with their wishes and without the need for probate.
The best way to protect assets from probate and ensure that they are transferred in accordance with an individual’s wishes is to consult with an estate planning attorney. An attorney can help individuals create an estate plan that fits their specific needs and goals.
If you have questions about what assets are exempt from probate in Florida, or if you need help creating an estate plan to protect your assets from probate, don’t hesitate to contact Zoecklein Law. Our experienced attorneys are here to help you navigate the complex world of estate planning and Probate and ensure that your assets are protected and transferred in accordance with your wishes.
At Zoecklein Law, we offer free consultations to help you get started. We understand that estate planning and Probate can be overwhelming, but our team is here to help you every step of the way. Don’t leave your family’s future to chance.
-Brice Zoecklein, Esq.
Disclaimer: The information contained in this blog/website is for informational purposes only and provides general information about the law but not specific advice. This information should not be used as a substitute for advice from competent legal counsel as laws change and the facts in your specific case need to be analyzed.
