Your Subtitle text

Frequently Asked Questions Regarding Wills and Probate

1. What is probate? 
2. If I have a will do my assets still have to go through probate?
3. If I have a small estate will my assets still have to go through a full probate administration? 
4. Does my will always control the disposition of all of my assets? 
5. What are non probate assets? 
6. What happens to non probate assets if all designated beneficiaries or joint owners predecease the decedent? 
7. If I draft a will, can I designate who will handle my estate?
8. What does the term “fiduciary” mean?
9. What is the difference between an executor and a personal representative? 
10. What authority does my personal representative have during my lifetime once I have designated him or her in my will? 
11. Upon my death, will my personal representative automatically have authority to act on behalf of my estate?
12. Does the State of Florida receive all of my assets if I do not have a will?
13. If I have a power of attorney why do I need a will?
14. How are fees determined?
15. What is a trust?
16. Will a trust avoid all professional expenses at my death?
17. Will a trust avoid or eliminate all taxes at my death?
18. If I have a trust do I still need a will?

 
 1. What is probate? Probate is a court proceeding where the final matters of a person are concluded. It is a process whereby the (a) final bills and taxes of a decedent are determined and paid and (b) the remaining assets are orderly distributed to the persons entitled to receive them. Probate is designed to protect the beneficiaries of the estate and the creditors to ensure that the assets will be distributed properly. In most situations a personal representative is appointed by the court to handle your final affairs. The appointment of a personal representative can often be made without a formal court hearing. The personal representative is responsible to wind up all business affairs and then distribute the balance to the persons entitled to receive the assets. In smaller estates the entire process may be handled in a procedure known as a Summary Administration.

 2. If I have a will do my assets still have to go through probate? Having a will does not necessarily control whether your estate will have to go through probate. The determining factor is the type of assets you own at the time of your death. Whether probate is necessary is determined by how you own your property. For instance, if you own a bank account jointly with someone else, the account will likely pass automatically to the other owner at the time of your death. A will tells the probate court which person you want to handle your estate so as to see that your assets are distributed as set out in the will. If you own property in your individual name, some type of probate proceedings will have to occur to transfer assets to those entitled to receive your estate.

 3. If I have a small estate will my assets still have to go through a full probate administration? The answer will depend upon the type and value of the assets, and whether or not there are any creditors. If a person leaves only personal property (i.e. anything other than real estate) and if the total value of all personal property owned by the decedent in his or her individual name is less than $75,000.00, the estate may qualify to be handled as a Summary Administration, which generally takes less time and is less expensive that a full administration. Also, if a person has only a home and other assets which are less than $75,000, the estate may qualify for Summary Administration.

 4. Does my will always control the disposition of all of my assets? No. A will only controls and governs the disposition of those assets which you own in your individual name. Assets that are in your individual name are often called “probate assets” because to transfer ownership at death they generally must go through some form of probate proceedings.

 5. What are non probate assets? Non probate assets are typically property (real estate or personal property) that are owned jointly with another person or persons or where a contractual arrangement has been created, typically with a financial institution, whereby the financial institution agrees on the death of the owner to automatically transfer title to a designated beneficiary or joint owner. One common example of non probate property is jointly owned real estate and personal property which by statute will automatically belong to the surviving joint tenant at death in proportion to their ownership. Real property owned jointly by a husband and wife will pass automatically to the survivor upon the death of the first. Other examples of non probate assets are Payable on Death (“POD”) bank accounts, Transfer on Death (“TOD”) security registration, life insurance and annuity contracts wherein the owner of the policy designates a beneficiary to receive the policy if it has not been consumed prior to death; Individual Retirement Accounts (“IRAs”) and retirement plans where the owner designates a beneficiary, some employment benefits, certain union death benefits, POD Government Savings Bonds, life estates in real estate, etc. Also, any assets which a person owns in a trust with a designated beneficiary are also deemed to be non probate assets.

 6. What happens to non probate assets if all designated beneficiaries or joint owners predecease the decedent? If all designated beneficiaries of non probate assets predecease the owner, the asset will become a part of the owner’s estate and be distributed to those persons entitled to receive the assets. If all joint owners die, the non probate asset becomes a probate asset of the estate of the last to die and it will be distributed with the other assets. Most financial institutions allow owners to designate contingent beneficiaries if the primary beneficiary dies before the owner of the asset.

 7. If I draft a will, can I designate who will handle my estate? Yes. This is one important reason many people choose to prepare a last will and testament. The person you name is called a personal representative which is some states is referred to as an executor or administrator. The person you name will have a “fiduciary” duty to act in the best interests of all of the beneficiaries of your estate. The court will generally appoint the person you choose to serve unless they have a conflict of interest or they are deemed unsuitable to serve. In Florida, a personal representative must be at least 18 years of age and must not have been convicted of a felony. You may also designate an alternate personal representative just in case the first person is or becomes unable to serve.

 8. What does the term “fiduciary” mean? The term fiduciary applies to persons who are acting in a representative position of trust such as a personal representative, a trustee or as an attorney-in-fact. The person who has a fiduciary duty has a legal obligation to act in the best interests of all persons who have an interest in the estate or trust or in the case of a power of attorney in the best interests of the person who gave them the power. In an estate, this means that the personal representative must treat all creditors and beneficiaries fairly and cannot exercise or use his or her discretion to unfairly benefit one beneficiary to the detriment of other beneficiaries.

 9. What is the difference between an executor and a personal representative? None. When the Florida Probate Code was adopted, the term personal representative was chosen to designate the person appointed by the court to handle your estate administration. This was meant to be a non gender term. Prior to the adoption of the Florida Probate Code, the term “executor” and “executrix” was the name given respectively to the male or female person who was appointed under a will and, likewise, the term “administrator” or “administratrix” was respectively given to the male or female person who was appointed by the court to serve in an estate where the decedent did not leave a will.

 10. What authority does my personal representative have during my lifetime once I have designated him or her in my will? A person has no authority or power over you or your assets until you are dead and the will has been admitted to probate by the court having jurisdiction over your estate and the court has actually entered an Order appointing a personal representative. Your will merely nominates the individual and the power will come from the court by an order appointing him or her as your personal representative. The nominated personal representative has to petition the court for appointment prior to receiving his or her power. After the Court appoints a personal representative, the Court will issue “Letters of Administration” which formally empowers the personal representative to act on behalf of the estate.

 11. Upon my death, will my personal representative automatically have authority to act on behalf of my estate? No. A personal representative has no legal authority to act except after appointment by the court. After the Court appoints a personal representative, the Court will issue “Letters of Administration” which formally empowers the personal representative to act on behalf of the estate.

 12. Does the State of Florida receive all of my assets if I do not have a will? The answer is generally no. If you do not take the time to prepare a will, your heirs will be determined by a portion of the probate code known as the “laws of intestacy.” The laws of intestacy assume that you want to take care of only your closest living relatives. Thus, the laws of intestacy essentially specify that your estate shall be distributed to your spouse and descendants, if any, or if none, to your nearest relatives. If you have remarried there are special rules that apply when you have children by a prior relationship. The laws of intestacy assume you want all of your assets to go to your blood relatives. If you want your assets to go to persons or organizations other than your relatives, you need to prepare a will. However, if you die leaving no living relatives who can be found, there is a slim chance the estate could go to the State of Florida. Usually, some relative can be found who will likely be happy to receive whatever assets you may leave.

 13. If I have a power of attorney why do I need a will? A power of attorney is a document whereby a person appoints one or more persons to assist them with their affairs. The person granting the power is called the principal and the persons receiving the power are called the attorneys-in-fact. However, a power of attorney automatically terminates at death of the principal and the attorney-in-fact ceases to have any power to act on behalf of the principal.

 14. How are fees determined? All court proceedings have court costs (such as a filing fee) and most probate proceedings will require the expertise of an attorney. The State of Florida has enacted a Probate Code which provides that a personal representative and the attorney for the personal representative are entitled to a reasonable fee for their services and explains how those fees are to be determined. Attorneys in the state of Florida typically charge fees commensurate with the work involved based on a number of factors.
 15. What is a trust? A trust is often used as a will substitute. It is an estate planning tool and when used in the right situation it can work very well. A trust is a written agreement whereby the person creating the trust (i.e. “settlor”) designates a party (i.e.” trustee”) to receive assets and to manage them pursuant to written instructions for designated beneficiaries. A trust can continue beyond the death of the settlor of the trust. A trust has to be funded by transferring assets to the trustee. The trustee will hold the assets for the designated beneficiaries. During the settlor’s lifetime, the beneficiary is often the settlor and the settlor’s spouse. After the death of the settlor, the written agreement will usually instruct when and how the assets are to be distributed. Sometimes the assets are distributed outright to the designated beneficiaries and other times some or all of the assets will continue in trust until some date or specified event in the future. A trust usually costs more than a will because you essentially are pre probating your estate by transferring all of your assets to the trustee prior to your death. Since a trust often continues for a period of time you also have to be very careful with the wording to make sure that it addresses various contingencies that might occur during the administration of the trust. However, trusts are not for everyone.

 16. Will a trust avoid all professional expenses at my death? The simple answer is no. Contrary to what some attorneys and financial planners may advise you, a trust does not eliminate all professional expenses at death. You will still likely need the services of an attorney and an accountant. The reason being is that if you have multiple beneficiaries or tax issues, you still need to prepare many of the same documents you would prepare in an estate (i.e. inventory to establish date of death values, accountings showing what bills were paid and assets sold, you still need to prepare tax returns (i.e. state and federal income and possibly estate tax returns) and proposals for distribution of assets from the trustee to the beneficiaries).

 17. Will a trust avoid or eliminate all taxes at my death? Depending upon your situation, a trust may help you minimize your estate taxes and in some situations eliminate estate taxes.

 18. If I have a trust do I still need a will? The answer is yes. The reason is that very seldom is a person able to die with all of his or her assets in the trust. Oftentimes there are some assets held outside of a trust which may have to go through probate or to be collected by affidavit. The will oftentimes used by attorneys is called a “pour over” will because it provides that all assets are to be transferred (i.e. poured over) to the trustees to be administered and distributed along with the other assets of the trust.
Website Builder