Some Probate Avoidance Techniques

POD (Payable on Death) Bank Accounts

It is easy to re-title a bank account to include the name of a beneficiary who will become entitled to the funds in the account upon the death of the primary account holder. While the primary account holder is alive, he or she retains sole control over the account. Discuss the options with your bank representative.

Joint Bank Accounts

These types of accounts will allow access by both names on the account, and can be very helpful in the common situation where an elderly parent relies on a child to do his or her banking.

Quit-Claim Deed

A common technique for probate avoidance is the recording of a quit-claim deed. Typically, the deed transfers all interest in real property from the Grantor (often an elderly parent) to a Grantee (usually a child of the parent) in order to avoid the expense of probate. Very often, this type of transfer may cause more problems than having the property pass to beneficiaries through probate. For example, depending on the situation, capital gains may be incurred and the resulting taxes could far outstrip any cost for probate. Also, it is possible that protection against creditors afforded by homestead in Florida could be lost. Finally, depending on when the transfer occurs, an elderly Grantor's qualification for Medicaid could be severely compromised.

Life Estate Deed

Usually. this type of deed will be a better choice to avoid some of the pitfalls of the quit-claim deed. The Grantor transfers his or her interest to the Grantee, but reserves the absolute right to remain in the home until he or she passes away. Generally, homestead protection against creditors will be retained. However, capital gains may be incurred and Medicaid eligibility may be adversely affected.

Enhanced Life Estate Deed

Also called a "Lady Bird" deed, this type of instrument will generally avoid the pitfalls that follow transfers of property from quit-claim deeds and life estate deeds. The Grantor will retain a life estate and also retain the right to sell or transfer the property.

It is always a good idea to consult with an attorney before recording any deed transferring your interest in real property. If you have any questions about any of the instruments discussed above then please contact us - click here for our full contact details