I attended an interesting class today discussing probate in Florida. I did a bit more research when I got back to the office and found this nice little discussion of the subject on the Florida Bar Associations web site.
Basically, there are 3 ways assets may be handled upon death:
1) A properly drafted, executed, AND VESTED revocable trust. The key part to this is vested. Vested simply means did the deceased place all of there assets into the trust. Often, people take the time to set up these trusts and there’s no follow through to transfer assets from the individual into the trust. Thus, when the deceased died the trust was an empty shell. Assuming that everything is done properly this is the best option.
2) A current, properly drafted and executed will. This is good too, and how most people will pass. Â They have a (even very basic) will which states when I die everything I own goes to X or to whomever they wish. The key to this is to update the will to make sure it’s current and properly executed. Your estate will be probated in the county where you are a resident when you die. If you have a will drafted when you were a resident of say New York, then decide to move your permanent residence to Florida don’t forget to update your will reflecting you live in Florida. And, have that will executed at the attorneys office. Â Much like the Trusts there are those who die with a perfectly good will in there top drawer that has not been executed.
3) No will. The deceased passed without a will (intestate) or a trust and now the court will pay the lawyers to liquidate your estate, pay their bills and pass anything which remains to your heirs according to Florida Statute. This is nothing short of a total disaster.
Now, how does this affect real estate? First, if you have a trust, place your real estate into it. Everyone always asks the question so here’s the answer, YES you can homestead a property held in the name of a trust. They even have a form for it called a Certificate of Trust. This is not the same a Notice of Trust. A Notice of Trust is submitted to the court when a person dies with a revocable trust or other acceptable Trust instrument in place. If there is a trust then the trustee has obligations to creditors but it’s much easier to liquidate assets.
If one is looking to liquidate a property and there is a will then the personal representative who is typically nominated by the will must be approved by the court. This will happen after the court is petitioned and the court will issue ‘Letters of Administration’. This will serve as the legal OK, with any stipulations, to act on behalf of the estate. The court authorizes this person to notify creditors, pay bills, liquidate assets etc. The court will allow this to happen either dependently or independently, with or without, the explicit approval of the court. If they can make these decisions independently then things are pretty simple. they can enter into a listing agreement, sign for the estate as the PR and sign any require closing docs and deeds without a court order. If the letters however specify a dependent liquidation then depending upon the verbiage liquidating property can be considerably more difficult.
an interesting note here is that I was recently told that a will executed in another state or country is recognized under Florida law if it is considered valid under the laws of the state or country in which it was executed.
