Real estate is one of the most important things for a person to consider during the estate planning process. Often, real estate is one of the biggest assets that a person will leave behind in his or her will, but unfortunately, it can also be one of the most complicated parts of the estate administration process.
Following an individual’s death, any real estate that was owned solely by the decedent will generally have to go through probate. Even at its simplest, the probate process can be confusing and complicated and there are several different kinds of probate. When a decedent owns property in a state other than the state in which he or she died, the process gets even worse. If a person owns property outside of the state in which he or she died, his or her will must go through ancillary probate in addition to primary probate.
The Problem with Ancillary Probate
Ancillary probate is difficult to deal with for a number of reasons. First, it’s an additional legal proceeding, separate from primary probate, which means it will demand more of your time, effort, and money. If a case needs to go through ancillary probate, it means that you must repeat the probate process that you’ve already gone through—this time, in another state. Plus, ancillary probate comes with a whole new set of information and laws that need to be deciphered and worked through.
Ancillary probate proceedings can become even more muddled if a person dies intestate—meaning without leaving behind a valid will. Since intestate laws vary from state to state, it’s possible that the state in which primary probate proceedings took place and the state in which ancillary probate proceedings will take place may disagree on which relatives should be named beneficiaries and may actually name two different people as beneficiaries to the same assets. Needless to say, this can cause some real problems for all involved parties.
Avoiding Florida’s Ancillary Probate Laws
The ancillary probate process can be physically and emotionally exhausting for anyone going through it. Luckily, it is sometimes possible to avoid the process completely and thus avoid all the accompanying hassle.
If you’re currently planning your estate, here are some ways you can help your loved ones avoid the ancillary probate process later on:
1. Joint tenancy. It’s possible to hold real estate in “joint tenancy,” meaning that more than one person is listed as the legal owner. (In Florida, spouses are automatically considered joint tenants of real estate to a certain extent.) Following the death of one of the owners, any real estate held in joint tenancy is automatically transferred into the name of the other owner or owners, and there is no need to go through the probate process.
2. Enhanced Life Estate Deed. An Enhanced Life Estate Deed (or a “Lady Bird Deed”) is a good option for Florida homeowners because it allows the owner of the property to do whatever he or she wishes with the property for as long as he or she is alive, but it also allows the owner to name beneficiaries to whom the property will pass upon his or her death. An Enhanced Life Estate Deed works outside of the probate process and therefore is subject to neither probate laws nor ancillary probate laws.
3. Ownership in a Business Entity. A real estate owner has the option of transferring real estate into a business entity. This means essentially that he or she can transfer real estate and make it, say, a limited liability company or a corporation. At the point of transfer, the real estate will cease to be considered real estate and will become personal property instead. At that point, the property will no longer be subject to the probate process.
4. Ownership in a trust. Real estate in Florida can also be titled in the name of a trust. When that happens, a new deed will be prepared which will name the trustee as the automatic holder of the property, without having to go through the probate process.
Dealing with ancillary probate can be a time consuming, expensive, and exhausting process. If you’re currently working on drawing up an estate plan and you want to spare your loved ones the pain of going through ancillary probate, consider using the above methods to make your estate administration process as easy as possible. However, because each of the above options are inherently complicated and extremely nuanced, you’ll want to speak to a knowledgeable attorney before you make any decisions.
For help navigating the estate planning process and figuring out which estate planning methods are right for you, contact the attorneys at Wintter & Associates, P.A. today.
About the Author:
Christopher Q. Wintter is the founder of Wintter & Associates, P.A. and a board-certified expert in Trust and Estate matters by the Florida Bar. With more than 24 years’ experience as a practicing attorney, he also serves as an instructor and faculty member for the National Institute of Trial Advocacy (NITA)—the nation’s leading provider of legal advocacy skills training to practicing attorneys—and has earned the AV® Preeminent™ rating with LexisNexis Martindale Hubbell. He was also selected for inclusion in Florida Super Lawyers for 2011 and 2012 in Estate and Trust Litigation.