Florida is one of the hottest markets for individuals who want to acquire vacation homes and rental apartments. However, anyone living out of the state owning some type of real estate investment in the Sunshine State must be aware of the process of ancillary probate.
In this article, you will discover what Florida ancillary probate is and how to avoid it.
Ancillary Probate – Understanding the Concept
In the United States, ancillary probate is an additional, simultaneous probate process that is required when a decedent individual owned real estate or tangible personal property in another state(s).
Typically, what happens with a property after its owner dies is governed by the laws of the state where it is located. Consequently, if the decedent lived in another state at the time of death, the laws governing his property’s destiny are still the laws of the state where the property is located.
In Florida, ancillary probate is a common issue when a nonresident dies owning a property located in the state, and the property is titled in the nonresident’s sole name.
The term property as applied in this context has a broad sense, including homes, condominiums, commercial buildings, vacant lots, or any other type of real estate.
Why Avoid Ancillary Probate in Florida
As provided by Florida Probate Rule 5.030, “every guardian and every personal representative, unless the personal representative remains the sole interested person, shall be represented by an attorney admitted to practice in Florida.”
Also, Section 733.6171 of the Florida Probate Code lists the total amount of fees that attorneys can reasonably charge for probating an estate, including an ancillary estate. The value of such fees begins at 3% of the value of the probate property located in Florida.
As it is plain to see, going through ancillary probate will add expenses to the costs related to settling an estate. In Florida, the process of ancillary probate can be even more expensive, given the number of fees involved in the process.
For instance, a vacation home valued at $300,000 could easily result in probate fees of $9,000. However, out of state residents or foreigners who own real property in Florida can avoid ancillary probate utilizing different strategies.
Avoiding Ancillary Probate in Florida – Feasible Solutions
Land trusts are a good way to hold legal title to real estate for both nonresidents and foreigners who own properties in Florida.
If a non-resident of the State of Florida dies, trust ownership can help the beneficiary avoid ancillary probate administration.
In case you are considering transferring your property in Florida to trust, we strongly recommend you seek an expert attorney to ensure the deed is properly drafted and recorded.
Ownership in a Business Entity
Nonresident and foreigners who own commercial or rental properties in Florida can transfer their estate into a business entity (LLC, Corporation, etc.). This strategy is used to convert the property from real estate into personal property.
Nonetheless, anyone who opts for this strategy as a way to avoid ancillary probate must be aware that it may not prevent domiciliary probate in the owner’s home state of residence.
Another good strategy to avoid ancillary probate in Florida would be to title the property in joint names, with one or more parties with rights of survivorship.
In case you are a married individual, the state of Florida recognizes “tenancy by the entirety”, which is a type of joint ownership with rights for survivorship (do not mistake with “tenancy in common”).
Again, remember to seek guidance from a business attorney in Florida to ensure the deed is properly drafted and recorded.
Enhanced Life Estate Deed
Also known as a “Lady Bird Deed”, the enhanced life estate deed is recognized in just five states: Florida, Michigan, Texas, Vermont, and West Virginia.
An enhanced life estate deed allows the real property’s owner to reserve the right to whatever he/she wants with the real estate while alive. Nonetheless, after the estate owner’s death, the property is transferred to beneficiaries outside of probate.
In such a case, the property’s owner can make a gift of it to its beneficiaries (also known as remaindermen or remainder beneficiaries) but can continue living in the home until the time of death.
We Can Help You to Avoid Ancillary Probate in Florida
Regardless of your situation, never try to write a deed on your own. Instead, consult with an expert attorney from Jurado & Farshchian, P.L. to ensure your deed is properly drafted and recorded.