If I Have A Will Does My Estate Have To Be Probated?
Video Summary
If I have a will, does my estate have to be probated? Well, the question is not whether or not you have a will or you don’t have a will. The question is: do you have any assets that are titled just in your name that do not designate a beneficiary?
An example of assets that you have that name beneficiaries is, let’s say, a life insurance contract. That’s your asset. You designate a beneficiary, so it’s controlled by the life insurance contract and is payable to whoever you designated as a beneficiary. So that doesn’t have to be probated.
Same thing with IRAs, 401(k)s. They all – you’ve designated a beneficiary to receive the benefits of these, really, trust. An IRA, or a 401(k), or annuities, that’s all controlled by contract, and it says that when you pass away who’s to receive those assets.
Another example of assets that name a beneficiary: if you have a joint account, which is usually the case between husband and wife. They own their bank accounts jointly. They own their real estate jointly. And if they do, when one of the spouses pass away, well, the property automatically passes to the survivor. Any other assets that you own as joint tenants with right of survivorship passes automatically, or pursuant to the contract. You also look at bank accounts. You look at bank accounts that have a “payable on death” or your brokerage account, which is “transfer on death,” and so those assets pass pursuant to your contract with the brokerage house, or whatever financial institution.
However, if you have an asset that’s just in your name, then your estate must be probated. It doesn’t matter whether you have a will or you don’t have a will; that’s what determines whether or not you have a probate proceeding.
So what’s the advantage of having a will? Well, a will says – directs who you wish to receive that asset so that you don’t leave it to the state of Florida and the statutes to say who receives the assets. So you can name who you want to receive your assets under a will, and you can also designate who you wish to be in charge of your estate, which is called an “executor” or a “personal representative.”
So the question is not whether you have a will and it avoids probate, or whether you die without a will. It only matters whether or not you have your – you die with assets that are just in your name and we must have a probate proceeding to determine who the beneficiary of that asset would be. By looking at a will or looking at the Florida statutes, the Florida statute does set forth that if you die without a will, then it passes to all of your heirs, or your children, or, if you have deceased children, to their children or grandchildren. And it goes on to explain who else would receive it if you don’t have any children.
So if you have any questions about an estate proceeding, with or without a will, well, give me a call at (727) 847-2288.
What Is A Trustee And Who Should Be A Trustee?
Video Summary
What is a trustee, and who should be a trustee? A trustee is the person who is in charge of a trust. As the word trust means, you are in – you’re trusting somebody with your assets, and the person that you’re trusting with your assets is called a trustee. And so they’re the ones that have certain powers – usually to invest the money – and they are given directions under the trust instrument to decide or given direction as to how they should spend the money or use the money. Sometimes a trust provide for discretionary disbursement, so the trustee uses their own judgment as to how much money should be distributed out to a beneficiary, such as a minor child, for their care or for their education.
So that’s – and the trustee can be anybody. A trustee can be a bank, which – financial institutions. They really go out and look for that – trust departments – however, your estate needs to be sizable in order for them to serve and to take charge of your estate. I believe that they start at about $500,000.00. Smaller estates usually have individuals who are concerned.
So, well, who should you designate as the trustee? Well, many times, whenever we do estate planning documents, you start by naming yourself, which is a little hard to explain whenever you’re trusting yourself with the trust – with your own assets, but that’s really what the trust instrument says. You direct yourself as the trustees to use the money for your benefit, and you’re the one who established the trust as the settlor or the grantor of the trust. However, it’s usually an estate planning tool, and then you designate what you want done with your assets when you pass away.
Course, when the trustee passes away, there needs to be a successor trustee. Well, who should you name? Well, usually, in the estate planning scheme of things, or whenever you prepare a trust for estate planning purposes, customarily you name a family member. Sometimes you might name a professional, such as your attorney, your accountant, or financial advisor – they have some restrictions as far as doing that – but many times it’s a family member who you believe has good business sense and will follow your directions.
A lot has to do with whether or not the term – under the terms of the trust you just want make distribution immediately upon your death rather than having it held for an extended period of time over, let’s say, a minor’s time until they reach age 25. Well, if they’re gonna pay out money, well, then you want someone that’s sort of sensitive to raising a child and understanding how, whenever you’re 18 years old or younger, that you’d like to have a brand-new Corvette or some other high-performance automobile. So you would want the trustee to think like you would do and say, “Well, a Toyota Camry – a used Toyota Camry with about 60,000 miles will do just fine to get you to and from school, and be dependable transportation.”
But you sorta understand you need to look at what the circumstances are as to who you appoint as your trustee. You can name multiple trustees and have one be responsible for the financial investments. There’s any number of people who you can name, and why you would name them, but I usually see where a family member is designated. And sometimes. in the absence of a family member, they may ask their attorney or accountant to serve. If they ask the attorney to sign, then a disclosure must be initialed at the time the document’s signed advising you that there can be additional charges to serve as a fiduciary – whether it be a trustee or personal representative – by the attorney, that you’ve been explained that you can designate anybody you want, including a bank or family member.
It’s very hard to say, well, who should serve as trustee. It depends on your individual circumstances and what family members or persons you know that are available to be able to do what you would like done after you pass away.
So if you’d like to set up a trust, or have some questions about a trust, give me a call at (727) 847-2288.
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