What are Probate Assets? Are Real Estate, Insurance Policies and IRA’s Probate Assets?

Some types of probate assets:

Real Estate Asset probateReal estate titled in the sole name of the decedent, or in the name of the decedent and another person as tenants in common, is a probate asset (unless it is homestead property), but real estate titled in the name of the decedent and one or more other persons as joint tenants with rights of survivorship is not a probate asset.

Property owned by husband and wife as tenants by the entirety is not a probate asset on the death of the first spouse to die but goes automatically to the surviving spouse.

Probate, Life Insurance, Annuity, IRA ProbateA life insurance policy, annuity contract or individual retirement account that is payable to a specific beneficiary is not a probate asset – but a life insurance policy, annuity contract or individual retirement account payable to the decedent’s estate is a probate asset.

Probate wills and bank accountsA bank account or investment account in the sole name of a decedent is a probate asset, but a bank account or investment account owned by the decedent and payable on death or transferable on death to another, or held jointly with rights of survivorship with another, is not a probate asset.

This list is not exclusive but is intended to be illustrative.

Click here for additional blogs on Probate, or BaskinFleece can be contacted at 727.572.4545
The information above is courtesy of The Florida Bar and represents general legal advice. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

Estate Planning and Joint Accounts: Pros and Cons.

Important Estate Planning Tip: Upon the passing of one of the joint owners of an account, the account automatically passes to the other person. However that can have many unintended consequences – find how in this 2 minute video:

For help or answers to will and estate related questions, you can contact BaskinFleece at 727.572.4545.

How Property Passes on Death.

BaskinFleece lawyer Jay Fleece

Attorney Jay Fleece

When someone dies, their property, be it real estate, bank accounts, stocks, bonds, jewelry, automobiles or whatever that person owns must pass to someone legally entitled to those assets. There are three basic ways property passes on death. Each way depends on how the particular asset is owned or titled at the time of death.

1. Probate. If someone owns an asset in his or her own name at the time of death, that asset should pass to the deceased beneficiaries that are specified in his or her will. If the decedent did not have a will, then the property owned by the decedent will pass under the laws of Probate lawyerintestacy. In other words, the state of Florida makes a will for the decedent. This doesn’t mean all of the decedent’s property passes to the state but rather to individuals depending on their relationship to the decedent.

Florida statutes 732.102 and 732.103 set forth the statutory scheme for intestate succession. For example if a man dies without a will but is survived by a spouse and children of that marriage, then the surviving spouse is entitled to the first $60,000.00 of assets and anything over that amount is equally divided between the surviving spouse and the children.

When property passes by the terms of a last will and testament or by intestate succession, the process by which this transfer is accomplished is called probate. Probate is essentially a court supervised process whereby a decedent’s property is transferred in an orderly fashion to the ones legally entitled to those assets.

trusts and estate plans2. Trusts. Some people elect to create a revocable “living” trust during their lifetime. Here, the trust assets are typically titled in the name of the trust. The grantor, the one creating the trust, has full power to change, modify and revoke the trust during his or her lifetime. After the death of the grantor, these trusts usually terminate and the disposition of the property held in the trust will be governed by the terms of the trust. These type of trusts typically contain language very similar to language used in a last will and testament, which specifies how and to whom the decedent’s property will pass. A successor trustee named in the trust document would then have the responsibility of effectuating the terms of the trust and to make sure the intended beneficiaries receive what the decedent intended. The administration of the trust is also similar to the probate process but is not subject to court supervision.

Estate expenses: The personal representative’s compensation is usually determined in one of five ways:3. By contractual provisions. Assets subject to contractual provisions pass outside the probate process and the trust process. These assets pass directly to the recipients designated in the contract that governs that asset. The most prevalent type of asset that passes by contract would be a joint bank account. Typically a bank account titled in two or more names will pass to the survivor. Other type of contractual bank accounts include the payable on death account, or the “held in trust for …” account, a Totten trust as these types of accounts are sometimes called. Other forms of contractual arrangements which pass property directly to a named beneficiary include life insurance policies, retirement accounts and annuities.

Why someone should engage in estate planning. While each of these areas are discussed in greater detail in other articles, this basic outline should illustrate how important it is to make sure that you understand how your assets are titled and how they will pass on death. The unintended consequences of improperly titling your assets could have a devastating effect on your estate plan. For those with substantial wealth, estate planning from a tax perspective can save on income and estate taxes.

To schedule an appointment with a BaskinFleece attorney, call (727) 572-4545. For more information about BaskinFleece, visit www.BaskinFleece.com.

This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

Pitfalls of Using Joint Ownership to Avoid Probate

Randall D. Baskin

By Attorney Randall D. Baskin

Many clients come into this office and ask whether they should title all of their bank accounts jointly with their children, as joint tenants with right of survivorship, in order to avoid probate and quickly pass ownership of assets to their children upon their passing.

Joint tenancies with right of survivorship are established when two or more people title assets, such as bank accounts or real property, in their joint name, as joint tenants with right of survivorship. With this form of shared ownership, upon the passing of a co-owner, the deceased co-owner’s interest in the property ends and title passes directly to the surviving co-owner(s). This process would continue until there is a single owner of the account. While this method of passing ownership in assets avoids probate, it can present a new set of issues which should be considered prior to taking any action.

Estate planning and joint accountsTax Consequences: The moment you add another person on an account as a joint tenant with right of survivorship, you are effectively making a gift of one-half of the value of the account.  If the gift is more than $14,000 (meaning the account contains more than $28,000), then you effectively just made a taxable gift to the newly added joint owner, which gift should be reported to the IRS.

Liability Issues: An account titled with another individual as joint tenants with right of survivorship is now no longer your solely owned asset. One-half of this account is now vulnerable to judgments and creditors of the joint owner.

Estate PlanningUnintended Estate Planning Consequences: When a parent adds one or more, but not all, of their children to an account as a joint tenant with right of survivorship, upon the parent’s passing, some children may end up inheriting more than others. While the parent may intend for all of the children to receive an equal share of the assets upon their passing, the surviving co-owners of the account have no obligation to share with their siblings. And, if the surviving co-owner of the account does choose to share with their siblings not named on the account, it would be considered a gift.

In order to avoid the outcomes discussed above and create the most effective estate plan for your situation, it is important to consult with an estate planning attorney prior to retitling your assets.

For additional information please contact BaskinFleece at 727.572.4545.

 

Wills, Probate and Trusts: How Property Passes on Death

BaskinFleece lawyer Jay Fleece

By Attorney Jay Fleece

When a person dies, their assets, be it real estate, bank accounts, stocks, bonds, jewelry, automobiles or whatever else they may own must pass to someone legally entitled to those assets. There are three basic ways property passes on death. Each way depends on how the particular asset is owned or titled at the time of death.

Probate

If someone owns an asset in their individual name at the time of death, that asset should pass to the beneficiaries specified in the decedent’s will. If the decedent did not have a will, then the Assetsdecedent’s property will pass under the laws of intestacy. In other words, the state of Florida decides how your assets will be distributed. This does not mean all of the decedent’s property passes to the state, but rather to individuals based on their relationship to the decedent.

Florida statutes 732.102 and 732.103 set forth the statutory scheme for intestate succession. For example, if an individual dies without a will and is survived by a spouse and children of that marriage, then the surviving spouse is entitled to the first $60,000.00 of assets and anything over that amount is equally divided between the surviving spouse and the children.

When property passes under the terms of a last will and testament or by intestate succession, the process by which this transfer is accomplished is called probate. Probate is a court supervised process whereby a decedent’s property is transferred in an orderly fashion to those legally entitled to the assets.

Living wills and trustsTrusts

Some people elect to create a revocable “living” trust during their lifetime. In such a case, certain assets are transferred to the trust and retitled  in the name of the trust. The individual creating the trust, called the “Grantor,” has full power to change, modify and revoke the trust during his or her lifetime. After the death of the grantor, these trusts become irrevocable and the trust property is disposed of in accordance with the terms of the trust. This type of trust, called a “Grantor Trust,” often contains language very similar to language used in a last will and testament, which specifies how and to whom the decedent’s property will pass. A trustee named in the trust document would then have the responsibility of distributing the trust assets in accordance with the terms of the trust. Administration of a trust is similar to the probate process but is not subject to court supervision.

contractual provisionsContractual Provisions

Assets governed by contractual provisions pass outside the probate and trust administration process. Instead, these assets pass directly to the recipients designated in the contract governing the asset. The most prevalent type of asset that passes by contract is joint bank accounts. Typically a bank account titled in two or more names will pass to the surviving owners of the account. Other assets governed by contractual provisions include payable on death accounts, and accounts “held in trust for.”  Payable on death accounts are frequently referred to as “Totten Trusts.” Other forms of contractual arrangements that pass property directly to a named beneficiary include life insurance policies, retirement accounts and annuities.

Screen Shot 2016-08-29 at 9.36.32 AMWhy you should engage in estate planning

While each of these areas are discussed in greater detail in other articles, this basic outline should illustrate how important it is to make sure that you understand how your assets are titled and how they will pass on death. The unintended consequences of improperly titling your assets could have a devastating effect on your estate plan. For those with substantial wealth, estate planning from a tax perspective can save on income and estate taxes.

This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

A Personal Representative’s Compensation for Ordinary Services

Personal Representative's compensationThe Florida Statutes: Compensation of a Personal Representative

The personal representative, the attorney, and other professionals whose services may be required in administering the probate estate (such as appraisers and accountants) are entitled by law to reasonable compensation. The personal representative’s compensation is usually determined in one of five ways:

  1. as set forth in the will;
  2. as set forth in a contract between the personal representative and the decedent;
  3. as agreed among the personal representative and the persons who will bear the impact of the personal representative’s compensation;
  4. the amount presumed to be reasonable as calculated under Florida law, if the amount is not objected to by any of the beneficiaries; or
  5. as determined by the judge.

Probate and personal representative

If no arrangements were made for compensation of the personal representative, a personal representative shall be entitled to a commission payable from the estate assets without court order as compensation for ordinary services. The commission shall be based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during administration. A commission computed on the compensable value of the estate is presumed to be reasonable compensation for a personal representative in formal administration as follows:

  • At the rate of 3 percent for the first $1 million.
  • At the rate of 2.5 percent for all above $1 million and not exceeding $5 million.
  • At the rate of 2 percent for all above $5 million and not exceeding $10 million.
  • At the rate of 1.5 percent for all above $10 million.

Real estate as probate assetIn addition to the previously described commission, a personal representative shall be allowed further compensation as is reasonable for any extraordinary services including, but not limited to:

  • The sale of real or personal property.
  • The conduct of litigation on behalf of or against the estate.
  • Involvement in proceedings for the adjustment or payment of any taxes.
  • The carrying on of the decedent’s business.
  • Dealing with protected homestead.
  • Any other special services which may be necessary for the personal representative to perform.

For help or answers to other estate-related questions, you can contact BaskinFleece at 727.572.4545.

 

This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

How Property Passes on Death

Probate, estate planning

When someone dies, their property, be it real estate, bank accounts, stocks, bonds, jewelry, automobiles or whatever that person owns must pass to someone legally entitled to those assets. There are three basic ways property passes on death. Each way depends on how the particular asset is owned or titled at the time of death.

1. Probate. If someone owns an asset in his or her own name at the time of death, that asset should pass to the deceased beneficiaries that are specified in his or her will. If the decedent did not have a will, then the property owned by the decedent will pass under the laws of intestacy. In other words, the state of Florida makes a will for the decedent. This doesn’t mean all of the decedent’s property passes to the state but rather to individuals depending on their relationship to the decedent.

InheritanceFlorida statutes 732.102 and 732.103 set forth the statutory scheme for intestate succession. For example if a man dies without a will but is survived by a spouse and children of that marriage, then the surviving spouse is entitled to the first $60,000.00 of assets and anything over that amount is equally divided between the surviving spouse and the children.

When property passes by the terms of a last will and testament or by intestate succession, the process by which this transfer is accomplished is called probate. Probate is essentially a court supervised process whereby a decedent’s property is transferred in an orderly fashion to the ones legally entitled to those assets.

Living trusts2. Trusts. Some people elect to create a revocable “living” trust during their lifetime. Here, the trust assets are typically titled in the name of the trust. The grantor, the one creating the trust, has full power to change, modify and revoke the trust during his or her lifetime. After the death of the grantor, these trusts usually terminate and the disposition of the property held in the trust will be governed by the terms of the trust. These type of trusts typically contain language very similar to language used in a last will and testament, which specifies how and to whom the decedent’s property will pass. A successor trustee named in the trust document would then have the responsibility of effectuating the terms of the trust and to make sure the intended beneficiaries receive what the decedent intended. The administration of the trust is also similar to the probate process but is not subject to court supervision.

Attorneys are best to handle assets from a trust3. By contractual provisions. Assets subject to contractual provisions pass outside the probate process and the trust process. These assets pass directly to the recipients designated in the contract that governs that asset. The most prevalent type of asset that passes by contract would be a joint bank account. Typically a bank account titled in two or more names will pass to the survivor. Other type of contractual bank accounts include the payable on death account, or the “held in trust for …” account, a Totten trust as these types of accounts are sometimes called. Other forms of contractual arrangements which pass property directly to a named beneficiary include life insurance policies, retirement accounts and annuities.

BaskinFleece lawyer Jay Fleece

Attorney Jay Fleece

Why someone should engage in estate planning. While each of these areas are discussed in greater detail in other articles, this basic outline should illustrate how important it is to make sure that you understand how your assets are titled and how they will pass on death. The unintended consequences of improperly titling your assets could have a devastating effect on your estate plan. For those with substantial wealth, estate planning from a tax perspective can save on income and estate taxes.

To schedule an appointment with a BaskinFleece attorney, call (727) 572-4545. For more information about BaskinFleece, visit www.BaskinFleece.com.

This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.