In Florida, estates have both probate and non-probate assets. When thinking about your will and other estate planning documents, it’s important to understand this difference.
Non-probate assets fall into a few basic categories.
- Beneficiary Designations: First, assets with beneficiary designations with payable on death provisions such as insurance policies, 401(k)s, employee benefit plans, and IRAs are not subject to probate. The will does not control how, when, or to whom these non-probate assets are distributed. Instead, they pass by the operation of law to the persons named in the appropriate beneficiary designations.
- Joint Ownership: Assets held by the decedent and another person as joint tenants with rights of survivorship also pass outside the will directly to the survivor. Survivorship assets typically include assets owned by spouses, jointly titled real property, certain types of bank accounts, certificates of deposit, stocks and bonds, and certain government savings bonds (e.g. Series EE savings bonds).
- Trusts: All property held in a trust for the benefit of the decedent passes outside of probate also. The trust may have been created by the decedent during their lifetime for property management purposes or by someone else, such as a parent of the decedent. Trust assets pass under the terms of the trust rather than under the terms of the decedent’s will.
It is important to determine the extent of one’s non-probate assets when planning the disposition of one’s property at death. If a substantial portion of the assets are non-probate assets that do not pass under the will, even the best will may be insufficient to carry out the deceased’s intended disposition of their property and assets.
Furthermore, periodically reviewing the beneficiary designations and asset titling is critical to ensuring that your assets and property pass to the proper heirs and beneficiaries.