Three Ways Floridians Avoid Probate, and the Catch in Each

Most people who think about probate want the same thing: less court, less delay, less cost, and less of the family's business on the public record. Florida gives you several ways to get there. The three most common are owning property jointly, naming beneficiaries directly on accounts, and using a revocable living trust. Each one genuinely works. Each one also has a catch, and the catches tend to show up long after the paperwork was signed. Here's how to think about all three.

Joint ownership: simple, with strings attached

When two people own property as joint tenants with right of survivorship, the survivor takes the whole thing automatically when the first owner dies. Married couples in Florida often hold their home as tenants by the entirety, a form of joint ownership available only to spouses. Either way, the property skips probate on the first death because the survivor already owned it.

The trouble comes when the arrangement is used outside a marriage, most often when an aging parent adds an adult child to the deed or a bank account to keep things easy. The moment a child is on the title, they're a real owner. That exposes the property to the child's creditors, lawsuits and divorce. It can mean the parent can't sell without the child's signature. And it may carry tax consequences for the child that are worth understanding before the deed is signed.

Even between spouses, the protection has limits. Tenancy by the entirety offers more shelter from one spouse's separate creditors than ordinary joint ownership does, but not from debts both spouses owe, and once one spouse dies the survivor holds the property alone, with no plan for what happens next. If the survivor then dies without a will or trust, the property goes through probate anyway.

TOD and POD designations: easy until they go stale

Bank accounts can often be set up as payable on death (POD), and brokerage accounts, and some other assets, can be set up as transfer on death (TOD). You name a person, and when you die the account goes to them directly, with no probate. The forms are short, they usually cost nothing, and you keep full control while you're alive.

The catch is upkeep. A beneficiary designation is a standing instruction that nobody reviews, so it can sit for decades. By the time it's needed, the named person may have died, or the marriage that prompted it may have ended, or a child who was a minor is now an adult. If the named beneficiary has died and there's no backup, the account can fall back into the estate and into probate. And because these designations override a will, an out-of-date form can send money to the wrong person no matter what your will says.

There's a second, quieter problem. Designations treat each account separately, so they don't add up to a plan. A parent who names one child on the bank account and another on the brokerage account may end up with an unequal result nobody intended. A parent who names a minor child directly may create a court-managed arrangement that nobody wanted. The forms are useful, but they work best when someone has looked at all of them together.

The revocable living trust: thorough, but it has to be built and kept up

A revocable living trust is the most complete of the three. You transfer your assets into the trust, you stay in charge as trustee, and a successor trustee you've chosen takes over when you die or become unable to manage things. There's nothing in your name left to probate, so the transition can happen without court supervision, and the terms generally stay private. The trust can also say much more than a bare beneficiary form: stagger an inheritance, hold money for a young grandchild, or provide for a family member with special needs.

The catch is that it takes more at the front end, and it only works if it's funded. Property that never gets retitled into the trust is still in your name. A trust that was signed in a lawyer's office and then left in a drawer protects very little. It also needs a check-up when your life changes: a move, a new property, a marriage or divorce, a birth.

How the three fit together

These aren't rivals. Many Florida families use a blend: a living trust for the house and the larger accounts, a beneficiary designation on retirement accounts and life insurance, and a will as a backstop for anything that was missed. What matters is that the pieces agree with each other.

• Joint ownership: skips probate on the first death, but exposes the property to a co-owner's creditors and gives up control.
• TOD and POD: quick and inexpensive, but only as good as the last time someone updated the form.
• Revocable living trust: the most thorough route, but it has to be funded and revisited.

One test is worth running on your own paperwork. Pull out every deed, account statement and beneficiary form you have, and ask of each one: if I died next month, who gets this, and does that match what I want? The gaps usually appear within the first few minutes.

If you'd like a second set of eyes on how your assets are titled, Gegan Law Office helps Tampa and Central Florida families sort through probate avoidance. Call (813) 248-8900 to set up a free initial consultation. This article is general information, not legal advice about your situation.