Real estate is often one of the most valuable assets that make up an individual’s “estate.” Whether a property is a primary residence, vacation home or rental investment, planning ahead can help to better ensure that ownership transfers smoothly and that beneficiaries avoid unnecessary legal complications.
Without proper planning, real estate may go through probate, creating delays and added expenses for heirs. In Florida, real estate that is solely owned by a deceased person typically goes through probate unless it is structured to pass directly to a beneficiary. There are several strategies that a testator can utilize in order to effectively avoid probate while ensuring that their property is transferred according to their wishes.
One common method involves a revocable living trust. By placing real estate in a trust, the owner retains control during their lifetime, and upon their passing, the property is transferred to the designated beneficiary without going through probate. This method also offers privacy and protection from court involvement.
Another option is a lady bird deed, also known as an enhanced life estate deed. This allows the property owner to retain full control of the property during their lifetime, including the right to sell or mortgage it, while automatically transferring ownership to a named beneficiary upon death. This approach avoids probate while keeping the property outside of a trust.
Homestead and out-of-state property considerations
Florida has specific laws regarding homestead property, which is a primary residence with legal protections against forced sale and certain tax benefits. Homestead property cannot be left to anyone other than a surviving spouse or minor children.
Many Florida residents own vacation homes or investment properties in other states. Without proper planning, these properties may have to go through ancillary probate, which is a separate probate process in the state where the property is located. To avoid this, out-of-state property can be placed in a revocable trust, allowing for a smoother transfer to loved ones.
Ultimately, addressing real property when estate planning is rarely a straightforward task. However, when approached thoughtfully, it can be a meaningful effort that preserves value and minimizes stress for the next generation.