“Avoiding probate” has become a very popular goal of estate planning. Most people want the distribution of assets at their death to be simple, straightforward, and inexpensive. Even an abbreviated probate procedure in Florida (such as a summary administration) is neither simple, nor straightforward. Most people cannot handle it on their own and, hence, there will be an attorney’s fee involved along with filing fees.
Some people try to avoid probate by having a joint owner or beneficiary on every asset. This will avoid probate if you ensure that absolutely every asset has a joint owner or beneficiary. In my experience, people often miss some asset. People miss the asset because it is obscure or rarely used. This can be a small, out-of-state bank account, a few shares of stock, a couple savings bonds, an old life insurance policy, a travel trailer, or similar items.
Many people use a revocable living trust to avoid probate. It is true that a revocable trust does not require a probate proceeding. However, a revocable trust can only manage assets that are titled in the trust, or for which the trust is a beneficiary. At Blackburn Law Firm, PLLC – LifePlanLaw.com, we assist clients to make sure that every asset is titled in the trust or has a beneficiary (whether the trust or a person or charity). We do this at the time we draft and execute the trust so that clients’ heirs are not left with “missed assets.”
Distributing “missed assets” to beneficiaries forces the heirs into some kind of probate procedure with its attendant time, expense, and difficulty. The heirs become frustrated and resentful believing these small, obscure items should not be so difficult to manage. It seems unfair to cost so much and take so much time for a small asset. However, the law and courts must ensure that everyone who could be entitled to the asset, no matter how small, is treated fairly. Providing that assurance costs money and takes time.
In my opinion, if you want to avoid probate, do it fully and thoroughly or don’t do it at all. Even when passing large assets, such as a home or retirement account, to joint owners or beneficiaries, I often recommend that people allow their usual bank accounts to remain in their individual name and go to probate. This will provide a source of funds to pay for the probate, allow final creditors to be paid, and provide a procedure for handling those “missed assets.” Probate is not, by its nature, evil. It has functioned for hundreds of years to make sure that creditors are paid and assets are distributed to the people or charities who are entitled to them.
To discuss more information about Estate Planning, Probate, Medicaid, LGBTQ legal services; contact LifePlanLaw.com – Blackburn Law Firm, PLLC today at 727-826-0923.
You make a great point about using a revocable living trust. I didn’t know that that was a way to avoid probate. I’ll have to talk to a lawyer to figure out what I should do with my will.