10 Assets Florida Families Forget Will Still Go Through the Probate Process in Florida

An Introduction to some of the assets people forget goes through the Probate Process in Florida

Many Florida families are unaware that many common assets must go through the probate process if they are not properly titled, have accurate beneficiary designations, or are funded into a revocable living trust, and this includes the small stuff! 

Avoiding the probate process should be paramount to all estate plans, large and small. In Florida, probate administration can take up to 6-12 months (sometimes longer) depending on the complexity of the estate and the jurisdiction in which it is being heard. Probate in Florida also comes along with a lack of privacy, avoidable costs and court oversight, all of which a comprehensive estate plan is intended to prevent.

Clients regularly seek assistance with Florida estate planning and probate-avoidance law firms like ASR Law Firm when assets are unintentionally left unprotected simply because their loved ones were not aware that such assets required probate.

The following are 10 assets Florida families commonly believe will avoid probate (but won’t without proper planning to avoid such a mistake).

1. Digital Assets

According to the Florida Fiduciary Access to Digital Assets Act, digital assets, which are defined as electronic records in which an individual has a right or interest, are now recognized as part of a decedent’s estate. Digital asset planning may include social media or email accounts, online banking records, cryptocurrency, digital wallets, and online business records (i.e. Amazon, Etsy etc.).

While a personal representative of a deceased user’s estate may access digital assets, the content of electronic communications is subject to stricter requirements. Florida law requires that disclosure of the content of communications requires the deceased user’s explicit consent through an online tool, a will or trust, or a court order affirming that disclosure is necessary for estate administration.

Without adequate planning, families may be left with no choice but to open a probate case simply to gain access to digital assets. 

2. Business Interests Without Governing Documents or Transfer Provisions

By far, failing to draft and execute governing documents (such as operating agreements for limited liability companies) with proper transfer provisions is one of the most overlooked aspects of estate planning in Florida. Ensuring these documents are properly drafted and signed is a crucial probate avoidance step for Florida entrepreneurs and small businesses. 

Those who have ownership interest in a Florida company, such as a limited liability company, can be assured that their interest will go through probate unless:

• They draft a legally sound operating agreement that includes an effective transfer-on-death or succession provision;
• Their interest is titled to a revocable living trust during their lifetime; or
• There is a successful business succession plan in place. 

Small enterprises and family business planning is essential to avoid the need for probate administration, to allow for the continuation of the day-to-day management of the company, access to business accounts, or even the ability to sign and carry out contracts. Failing to properly plan for the unexpected death of a member may lead to the dissolution of the business and loss of assets intended to provide for one’s family. 

Without planning, your family may end up unable to access business accounts, sign contracts, or manage operations while probate is pending, putting the entire business at risk.

3. Vehicles and Registered Motor Homes

Contrary to common belief, Florida law does not allow the automatic transfer of vehicles to intended heirs. While the Florida DMV allows for a streamlined process, transfer to intended heirs may still require either probate paperwork or specific titling arrangements to transfer the ownership of a vehicle after the death of an owner.

For example, according to Florida Statute § 319.28, if a vehicle was solely owned by the decedent, an heir may apply for a certificate of title by submitting an affidavit stating that the estate is not indebted and that the heirs agree on the division of the estate. 

4. Timeshare Interests

Timeshare interests are often overlooked and are common triggers for the need for probate cases. Such interests are usually incorrectly seen as too small or only for vacation purposes. In actuality, timeshare interests are legitimate interests in real property that must be planned for in Florida.

Similar to other types of real estate ownership, timeshare interests will have to be administered through the probate court if they are not jointly owned (with rights of survivorship) or otherwise devised through a trust or enhanced life estate deed. Having to open a probate case simply to administer a timeshare interest could be detrimental to smaller estates. 

5. Solely owned Bank or Financial Accounts Without a Named Beneficiary Designation

In Florida, many incorrectly believe that they automatically have access to a deceased family member’s bank account. However, it is entirely untrue, and such an account may be part of the probated estate.

In cases where the deceased person’s bank account does not have (1) a named Payable on Death (POD) beneficiary, (2) a named Transfer on Death (TOD) beneficiary, or (3) is not jointly owned with another individual, then the financial institution must await a probate court order prior to releasing funds from the account.

This rule applies to all kinds of accounts, such as regular checking and savings accounts, investment accounts (like money market accounts and CDs,) or brokerage accounts for stocks and bonds.

See how trust funding prevents delays with bank accounts and financial assets.

6. Retirement Accounts

Similarly, retirement accounts, which include IRAs, 401(k)s, and other pension accounts, are considered probate assets if there are no named beneficiaries associated with the account. In fact, this is such a commonly overlooked asset that Florida probate courts often see estates opened solely due to a lack of a living beneficiary on retirement accounts.

For example, a retirement account asset will need to be included in the deceased person’s estate and be administered through the Florida probate court if:

• There is no designated beneficiary listed.
• If the named designated beneficiary predeceased the owner of the account and no successor is named. 
• If the deceased owner stated “my estate” as the beneficiary, or
• If the deceased owner named a minor child as the direct beneficiary (this is never advised since it will likely result in a guardian being appointed.

7. Life Insurance Policies With Lapsed or Incorrect Beneficiaries

While life insurance policies are designed to avoid probate, according to Florida Statute §222.13, they only work if the policy names a qualified beneficiary designation, which is updated as needed.

Like with retirement accounts, probate becomes necessary with life insurance policies when:

• There is no beneficiary listed at all (This is unlikely when seeking counsel from a professional like a financial advisor, since they are trained to ensure this is not overlooked!), 
• Named beneficiaries are outdated or have predeceased the insured,
• When a minor child is directly listed as a beneficiary without the involvement of a trust (Again, it’s rarely ever a good idea to transfer assets directly to a minor!).

8. Certain Real Estate Not Properly Titled

Another commonly believed estate planning myth believed by Florida residents is that real estate property (with homes, buildings, or vacant land) will automatically pass to one’s spouse or children upon their passing. This, however, is entirely incorrect – even for homestead property in certain circumstances. 

In Florida, real estate assets must go through the probate administration process unless:

• The property is owned jointly with a co-owner expressly as joint tenants with rights of survivorship,
• The property is owned in a trust, or
• The property is titled using an enhanced life estate (Lady Bird) deed.

This rule applies to all types of real estate assets, including investment properties and partial interests in property owned as tenants in common.

9. Personal Property Not Assigned to a Trust

Families often assume that personal property with minimal or sentimental value does not require probate administration. However, this is not necessarily the case.

According to Florida law, certain personal property must be administered in probate court unless otherwise exempt. Personal property, including non-financial or real property assets, such as jewelry, artwork, furniture, etc., must be administered in probate court unless the property is jointly owned, placed in a trust, or otherwise exempt by Florida law.

10. Real Estate Property located in Other States (Ancillary Probate)

Real estate owned outside of Florida must also be accounted for in a comprehensive, well-strategized estate plan. When out-of-state property is not accounted for, families will likely be left with facing two probate cases: the primary, Florida-based case  and an ancillary probate case in the state in which the property is located.

To avoid the need for such a situation and save the estate from the hassle and cost of administering a probate case in a different state, proper titling of the property is necessary. This may include co-ownership with rights of survivorship, placing the property into a revocable trust or, if the particular state permits such deeds, utilizing an enhanced life estate (Lady Bird) deed.

The only way to avoid this double-probate situation is proper titling (such as a Lady Bird deed in a state that permits them) or placing the property into a revocable living trust.

Why Remembering These 10 Assets Is Important?

The bottom line is that probate administration in Florida is neither cheap, swift nor automatic. Florida families often mistakenly believe that their heirs can simply “sign a deed” to informally transfer or decide amongst themselves when the time comes. However, Florida law explicitly disallows this, and the family members may end up with more headaches than they expected. 

Probate is generally a public process with rigorous court oversight and notorious delays. According to Florida law, the Personal Representative or Executor of an estate may not transfer ownership or take any action regarding the estate until the following occurs:

• First, the court must appoint the individual to serve in this fiduciary duty.
• Then the court must confirm its authority to serve. 
• The court must review and confirm the validity of the Will, if there is one.
• The court must ensure that proper notice is given to all creditors and that there is compliance with statutory requirements related to creditor claims. 

The simplest estate plans must aim to avoid probate at all costs to ensure privacy and conservation of the estate assets.

Ways to Keep These 10 Assets Out of Probate Court

Florida laws provide several options in which estate assets may avoid probate, and a trusted legal advisor would be properly equipped to assist with selecting and implementing the most appropriate.  

A few of the most common options in Florida are:

• A Revocable Living Trust – this may be the most flexible probate-avoidance tool available.
• Joint Ownership – properly titling jointly owned property to allow for the survivorship may be one of the most protective and easiest ways to avoid probate.
• Enhanced Life Estate/Lady Bird Deed – this option is a huge benefit to Florida families, providing a simplified and cost-effective way for any real estate ownership interest to avoid probate.
• Beneficiary Designations – as this is an option that may be the easiest to omit when updating estate plans, it is imperative to revisit named beneficiaries regularly, particularly after all major life changes. 
• Business Succession Planning and Governing Documents – a properly drafted and validly executed operating agreement could mean the difference between leaving an inheritance or not for many small business owners and real estate investors.

When Should Florida Families, Small Business Owners, and Real Estate Investors Review Their Probate Exposure 

A yearly audit of all assets and estate planning documents is always recommended. This does not need to be a long, drawn-out process. Instead, create an updated list of all your assets along with the associated probate-avoidance measures, named beneficiaries, and assigned fiduciaries. Each year, review the list to ensure it still complies with your intentions and wishes.

Additionally, it is wise to review estate plans when the following occur, regardless of the time of year:

• When getting married or divorced
• After a birth/adoption or death of a beneficiary or fiduciary
• During the purchase or sale of an asset, particularly real estate
• When starting a new business (or enacting ownership changes to an existing one!)
• If addressing significant health concerns
• When contemplating bankruptcy 

Frequently Asked Questions

Conclusion: Florida Probate is Avoidable with Intentional Planning!

Estate planning and probate-avoidance are not passive activities. This mindset leaves Florida families, real estate investors and small business owners exposed to the cost and delays of probate. And worse yet, it leaves their hard-earned assets exposed to the discretion of the court system and creditor claims.

Properly understanding how Florida laws permit for proper planning for these 10 types of assets, allows families, real estate investors and small business owners to take proactive steps to protect their loved ones, avoid delays, conserve their assets and keep their estate private.

To learn more about how ASR Law Firm regularly helps families, real estate investors and small business owners create a comprehensive plan that avoids probate with clarity, practicality and modern convenience, contact us to schedule a complimentary consultation.