Attorney Thomas B. Burton answers the following question: What are the risks to using probate rather than a trust in Florida?
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Transcript of Video: What are the risk to using probate rather than a trust in Florida?
Today's question is the following:
“What are the risk to using probate rather than a trust in Florida? My great aunt just passed, she lived and drafted her documents in Florida. Her attorney is advising using probate rather than the trust. Why do this? What's the point of doing a trust then?”
So the first thing is, if your aunt had probably set up the trust then the best way to avoid probate is to often have all the assets flow through the trust especially for people if you own property in two states, Florida and Wisconsin for instance, real estate, the best way to avoid having to do a separate probate in both Wisconsin and Florida, is to put both properties into the name of your revocable living trust.
I don't know the specifics of this situation, but it's possible that your aunt set up the trust but did not properly fund it meaning place the title to her home or other real estate or bank account into the trust and if that's the case, then the trust itself would not have assets and your attorney is saying, you need to open this probate in Wisconsin to get or in Florida, to get certain assets to you.
So, if the trust was created but never funded, it's just an empty vessel. So I would discuss the situation further with the attorney and ask them if that's what's going on and also ask them specifically why the probate action is necessary.
The other thing I see frequently is, some assets are placed in the trust and there's some assets someone forgot to put in the trust and maybe that's what the attorney is saying, you need a probate to, in order to transfer to The heirs or beneficiaries.
So in Wisconsin, we have this asset limit of $50,000, if there's assets above 50,000 outside the trust, you are going to need to use a full probate action to transfer them and there's a more simplified method, short of a full-blown probate if the assets are less than 50,000. So, I always advise clients with whom I am doing trust planning that we retitle all assets over that 50,000 level to the trust and if they want to keep some smaller accounts or a few items of property below $50,000 outside the trust, that will probably be okay, but in general, I would prefer they retitle everything into the name of the trust or use beneficiary designations to designate the trust as the beneficiary just so you can avoid having to open a probate for that, say, a $60,000 asset over here while you also have the trust over here.
Again, I would talk to that attorney and ask them why there's the need for the probate when the trust exists and they likely should be able to have a very good answer for you.
So great question and thank you for asking.
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