Probate is the legal process whereby the court determines the validity of the decedent’s Will, what the decedent’s debts were at the time of death and how those debts are to be paid, and how the remaining probate assets of the decedent are to be distributed to the decedent’s heirs or beneficiaries. Florida law provides a scheme for the order in which payments of expenses and obligations of the estate are to be paid.
Not all of a decedent’s assets are necessarily considered probate assets. Probate assets are those assets which at the time of death were in the decedent’s name alone and which contain no provision for automatic succession of ownership at death.
Depending on the circumstances, an abbreviated proceeding may be appropriate (Summary Administration). There are also distinct probate proceedings for decedents that owned property in the state of Florida (i.e. vacation home) but who were not Florida residents at the time of death, (Ancillary Administration).
Probate Example #1 (Where there is a Will and Living Trust)
This is just a simple example for illustrative purposes. One of the main reasons people consult with an estate planning attorney and set up a Trust is so that when they die, their estate can avoid probate. In practice this does not always work. For example, assume that John Doe had a bank account worth a million dollars and a stock brokerage account worth a million dollars as well at the time of his death. Let’s also assume that John Doe never set up his individually owned bank and stock brokerage accounts so that there were payable or transfer on death designations. Further, the bank and stock brokerage accounts were not owned by the Trust, but in John’s name alone. So, in order for these assets to have been legally transferred, probate proceedings were necessary.
Had John Doe set up his accounts with a payable on death designation or transferred ownership of the accounts to his Trust, those assets would have passed to the beneficiaries by “operation of contract” and the assets would not be subject to probate as they would not be considered probate assets. Because the bank and stock brokerage accounts were probate assets, they were subject to probate proceedings and distributed to the beneficiaries in accordance with the terms of the Will.
Probate Example #2 (Where there isn’t a Will)
Probate may be necessary regardless if the decedent had a will or not. Assume this time that John Doe never made out a Will. Again, in this example John Doe did not provide for any payable on death designations in his bank or stock brokerage accounts. Let’s add a wrinkle. John Doe owned a house with his cousin and the deed on the house reflected that title between John and his cousin was held as “joint tenants with rights of survivorship”.
In this example, after John died, the house was not subject to probate proceedings. Because John and his cousin owned the house as “joint tenants with rights of survivorship”, after John died, his cousin became the sole owner of the house as title passed to his cousin by “operation of law”. The bank and stock brokerage accounts were still subject to probate proceedings and were distributed to John’s heirs. The only difference is that instead of the decedent’ Will directing who gets what, Florida law controls.