Probate is a court-supervised process by which a person’s last will and testament are validated or “proven.” Once probated, debts of the estate can be paid and assets can be distributed to heirs. Because of the time and expense that are necessarily involved in probating an estate, many interested individuals (particularly heirs) want to know whether it is required. There is a dollar threshold that has to be met before probate is required, and there are different types of probate that all parties need to understand. Turn to Verras Law for all your estate planning and probate needs.
The $75,000 Requirement For Probate
In Florida, estates valued at $75,000 or more, and in which the decedent (the person who executed the last will and testament) passed away within the previous two years, must be probated. There are three different types of probate that take into account the value of the estate:
Formal Probate
This is the type of probate required for the above situation of an estate worth $75,000 or more with the decedent having died in the previous two years. Formal probate is somewhat complicated and requires, among other steps:
- Filing court documents
- Publishing notices about the probate in local media
- Collecting and organizing estate assets
- Paying estate creditors
- Filing inventories and accountings
- Obtaining final approval upon closing the estate
Personal representatives (executors) must be represented by an attorney whose job it is to guide the will through court and meet the above and other obligations.
Summary Administration
Estates that are worth less than $75,000 can be settled by informal probate. It is faster and simpler versus formal probate. An interested party will need to file a court petition and other documents to start the process. If the judge approves the petition, he or she will issue an order directing who is to receive the estate’s assets.
Disposition Without Administration
This procedure can be used if the decedent’s estate is valued at less than the decedent’s funeral and final medical expenses. Certain assets are not included in the value of the estate, such as vehicles and personal furniture.
How Is the Estate Valued?
The above probate methods naturally raise the question of how the value of the estate is determined. Generally, there are three steps required to do so:
- List: Make a list of all property that was owned solely by the decedent at the time of death, including bank accounts, investments, vehicles, and more. Also included are life insurance payouts that were not paid directly to a named beneficiary.
- Value: Next, the value of each solely owned asset on the date of death is determined. These values may be based on appraisals, assessments, market quotes, or other relevant information.
- Total: Add up the value of all identified assets to calculate the total value of the estate.
Which Assets Are Exempt From Probate?
Not all items of property in which the decedent held an interest at the time of death need to be probated. Some common examples of property that is exempt from probate are:
- Jointly owned assets with right of survivorship: Among these are homes and bank accounts. These will automatically become 100% owned by whoever is the surviving co-owner.
- Accounts with payable-on-death (POD) or transfer-on-death (TOD) beneficiaries: Examples are life insurance payouts and accounts that name a beneficiary. These will automatically disburse funds to the beneficiaries.
- Assets placed in revocable living trusts during the decedent’s lifetime: Assets will be distributed to beneficiaries according to the terms of the trust, possibly avoiding the probate court’s involvement.
Guiding You Through Each Step of the Probate Process
If you have questions about probate, perhaps as an estate personal representative or an heir, it’s time to call Verras Law. We can assist you with probate and we offer comprehensive estate planning services so you can prepare your own family legacy. Connect with us today.