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Smoothly Transferring Estate Assets in Florida

Estate Assets in Florida

There’s no one-size-fits-all estate plan in Florida.  Factors like your marital status and the ages of your children (if any), the complexity and size of your estate, and your personal goals and preferences can all make a huge difference in deciding on the right strategy.  Whatever your situation, the core idea is to coordinate transferring estate assets in Florida (and elsewhere) without excess costs or complications.

When it comes to transferring estate assets in Florida, for some folks, a tried-and-true Florida Last Will & Testament identifying assets and heirs is the best approach.

Other estates seeking to transfer estate assets can benefit from a Florida living trust, which allows you to avoid probate in Florida but retain control over the disposition of assets.

Complex estates, in contrast, may find that the optimal strategy includes a combination of a will and one or more trusts.

Some simple estates, on the other hand, might be able to rely on intestate succession, where no will is present and assets descend according to the laws of the State of Florida.

All of that said, the strategy adopted and documents used are always related to today’s topic, which is planning for the smooth transfer of estate assets in Florida (or wherever the assets are located).

The Administration of Estate Assets in Florida

The precise process of administration for transferring estate assets in Florida varies according to the assets involved and the estate-planning strategy used.  In general, though, when a will is present, an executor appointed under the will inventories the estate’s assets in Florida, reviews and pays creditor claims as appropriate, and then distributes assets to the designated heirs. Intestate estates are administered by a ‘personal representative’ rather than an executor, but the basic outline is the same – inventory property, pay creditors, distribute assets – all under the supervision of the probate court.  Assets held in a living trust skip probate and are distributed by a trustee according to directions set forth by the grantor in the declaration of trust.

Defining Assets in a Florida Estate

Of course, one of the most important – and occasionally overlooked – considerations in developing a proper plan for the transfer of estate assets in Florida is exactly what kinds of assets will be in your Florida estate.  Different asset classes transfer in different ways, and some have options for transfer not available to others.  So, planning ahead and tailoring your strategy to your assets is critical to an effective estate plan allowing for as smooth a transition as possible.

Real Estate Asset Transfers in Florida

Ownership of real estate in Florida (or “real property,” or “land”) is granted by a deed recorded with the land records of the county in which the property is located.  When you purchase a property, the seller executes a deed officially acknowledging the transfer.  Accordingly, to transfer real property from an estate to an heir, the executor issues and records a deed of transfer in the name of the new owner(s).  If the property was held in a trust, then the trustee will issue the deed to the new owner as directed in the declaration.

Significantly, though, Florida law recognizes alternate ownership interests in land that can be used to effect a transfer without probate.  A “life estate” is an ownership interest that automatically terminates upon the owner’s death.  So, for instance, to transfer a property to your nephew, you could record a deed under which you reserve a life estate in the property with the remainder passing to your nephew upon your death. You would still own the property for all intents and purposes for the rest of your life, but when you pass away, title vests in your nephew without the need for probate.

Land can also skip probate through a “right of survivorship” between two owners.  When a property is held by two owners as standard “tenants in common,” they each own a percentage of the title.  When one dies, the decedent’s percentage passes to his or her heirs because there is no right of survivorship.  With a property owned by two people as joint tenants, however, title automatically vests in the surviving owner upon the other owner’s death.  This right of survivorship allows the property to pass outside of probate because, upon the owner’s death, the deceased owner’s interest ceases.

A tenancy in the entireties, which can only be held by spouses, also includes a right of survivorship, along with important protections against creditors provided by Florida law.  If a married couple jointly own land as tenants in the entireties, the complete title vests in the surviving spouse upon the other’s death.  Tenancy in the entireties and joint tenancy both offer a method of seamlessly transferring real estate upon the death of one of the owners – avoiding probate and the risk of dilution. But, of course, the approach is only useful under the appropriate circumstances.

Transferring Personal Property in Florida

Transferring Estate Assets with Titles in Florida

Personal property is an estate asset and is an important part of smoothly transferring estate assets in Florida. There are 2 types of personal property which are assets WITH and WITHOUT TITLES.

The category of assets with titles in Florida includes vehicles, boats, and other tangible personal property that comes with a legal document officially recognizing the owner’s title to the property.  If only one name is on the title, completing a transfer is fairly straight-forward.  If, for example, a vehicle was bequeathed by will to the decedent’s brother, upon death the executor and inheriting brother simply apply to the Florida Department of Highway Safety and Motor Vehicles for a new certificate of title.  In many cases, Florida law allows for transfer of vehicles outside of probate proceedings if the estate is solvent and the required documentation is submitted.

If two names are on the title, the process depends upon whether the title includes a right of survivorship.  Florida law identifies a right of survivorship on vehicle titles by using “or” in between the two owners’ names (e.g., “John Smith or Jane Smith” vs. “John Smith and Jane Smith”).  If the title includes a right of survivorship, ownership automatically passes to the surviving owner upon the death of the other.  Otherwise, an application for new title submitted by the surviving owner and the executor (on behalf of the decedent) is necessary to complete the transfer.

Transferring Estate Assets without Titles in Florida

Personal property WITHOUT TITLES in Florida can be bequeathed via line items in a will, a residual bequest bestowing all property not otherwise addressed, or by incorporating a “personal property memorandum” within a will.  The memorandum lists specific items and identifies the heir who will receive each item.  For particularly valuable personal property, like expensive jewelry or antiques, it can be a good idea to have the executor prepare an “assignment of ownership” officially acknowledging the transfer to the heir when it occurs.  For inexpensive mementos and knick-knacks, a formal assignment is not necessary, but it is a good idea for the executor to carefully track who receives what and when they take possession.

An executor, also referred to as a Personal Representative in Florida is usually empowered to sell estate property not left to a specific heir and to distribute the proceeds, or to give away or donate to charity property that the executor does not believe is valuable enough to warrant a sale.

Personal property can also include intellectual property (copyrights, patents, etc.) owned by the decedent and don’t forget about digital assets in Florida such as websites and social media accounts.  If not specifically given to an heir, the executor will be empowered to determine how best to use the intellectual property for the estate’s benefit.  For valuable IP that earns regular royalties, creating a trust to hold patents or copyrights overseen by a trustee can be a good strategy to provide for heirs while ensuring that valuable intellectual property is wisely administered.

Transferring Bank Accounts and CD’s in Florida

Financial assets are also an important part of coordinating the transfer of estate assets in Florida. Upon the opening of an estate, the executor or personal representative will usually open a bank account in the estate’s name. The trustee can then transfer balances from the decedent’s other checking or savings accounts to the estate account and use the funds to pay estate administration costs, taxes, and creditor claims.  Any funds left over are distributed to heirs when the estate is ready for closing.  If a CD is close to maturity, the executor can wait till the maturity date and then transfer the funds to the estate account.  Otherwise, the executor can withdraw the funds and incur the early withdrawal fee or execute an assignment of certificate of deposit in favor of the appropriate heir.

Alternatively, bank accounts held jointly become the property of the surviving account-holder automatically upon the other’s death.  Thus, a checking account held in the name of a husband and wife jointly would become the wife’s sole account upon the husband’s death.  Similarly, a POD (“payable on death”) designation on a financial account or CD allows the account or CD to pass directly to the designee and avoid probate.

Transferring Retirement Accounts and Other Investment Accounts in Florida

Retirement accounts are often among the most valuable assets to consider in coordinating the transfer of estate assets in Florida. Most retirement and investment accounts allow the account-holder to designate a beneficiary to take title to the account upon the holder’s death.  This can be particularly beneficial with qualified retirement accounts, such as Florida IRA’s and 401k’s and even Florida 529 Plans, because spouses can often roll over the account into their own retirement accounts, thereby avoiding immediate tax liability.  Otherwise, beneficiaries can choose between accepting distributions within five years or in regular intervals throughout their life expectancy.

If an account does not have a beneficiary, it becomes an estate asset upon death and is administered by the executor in accordance with the terms of the will.  If the executor needs to cash out a qualified account, the decedent’s final income tax return will include the previously deferred taxes.

For individual stocks or other securities, the executor can sell the security to fund the estate or transfer it to the appropriate heir via an amended share certificate.  Inherited property in Florida receives a step-up basis in Florida for capital gains tax purposes, so an heir’s future taxable gains are based on the value at the time of inheritance rather than the value when acquired by the decedent.  Florida law also recognizes TOD account (“transfer on death”) designations for securities, which can avoid both probate and the need to liquidate the asset.

Life Insurance Ownership and Transfers in Florida

Life insurance may be transferred either by designating the beneficiary upon death, or moving the asset into a separate entity during lifetime, and both options should be considered in coordinating the transfer of estate assets in Florida.

If a life insurance policy insuring the decedent’s life is payable to a third-party beneficiary, the insurance company pays the proceeds to the beneficiary independently of the decedent’s estate.  If the policy is payable to the estate, the executor receives the funds as estate assets like other cash payments.  This is a strategy frequently used to provide liquidity for administration costs, taxes, and creditor payments.  Life insurance in Florida can also be set up so that it is payable to a Florida irrevocable life insurance trust (“ILIT”) and does not become part of the estate, in which case the cash in the trust will be distributed by the trustee according to the directions set forth in the declaration of trust.

Transferring Ownership Interests in Florida Business Entities

Business entities are often a forgotten asset when it comes to coordinating the transfer of estate assets in Florida, and this can lead to needless complications. A decedent’s ownership interests in a Florida LLC or corporation can generally be passed by will or trust like other assets.  However, a small business in particular may restrict transfers in its articles of organization.  Along the same lines, a buy/sell agreement among owners may require that, upon an owner’s death, the entity itself or the other owners purchase the decedent’s interest from the estate.  Often a buy/sell agreement in Florida will include a predetermined purchase price or formula for calculating it.  In that case, the purchase amount will be paid into the estate, administered by the executor, and distributed to heirs when the estate is ready for closing.

Because the form in which assets are held can make a big difference in the effectiveness of an estate plan, it’s important to plan ahead so that asset titles complement the overall strategy.  An experienced Florida estate-planning attorney can help you decide on an approach that provides for the smoothest possible transitions with the greatest benefit to your heirs.

Steve Gibbs, Esq.






8 comments… add one
  • joe moore July 5, 2020, 1:29 pm

    very helpful.. Thank you for your help.

  • Max October 16, 2020, 8:56 pm

    This dissertation was well laid out and very well written. I am left curious though as to whether a beneficiary can assign me his interest in an estate? I bought an assignment from a man who was to inherit a house through a codicil to an earlier will. The codicil was properly executed with all the necessary formalities; and I signed an agreement to purchase the interest in the house upon the probate coming to him. There is a 1943 Florida Supreme Court case IN RE The Francis Estate, 14 So. 2d. 803 (FLA 1943) that looks as though it indicates such assignments are enforceable and I would stand in as an interested person. Am I correct ?

  • gibbslawfl October 18, 2020, 7:08 pm

    Hello, this is an interesting question and not one that I’m familiar with enough to offer a clear answer. Sure, in theory you can contract for someone’s estate and it sounds like you did. The fact is though, a person can always change his/her last will or trust. So, then you would be left with making a claim against the trust or probate estate with your assignment contract in hand. This would seem be difficult to enforce and could have issues as a matter a public policy, though I’m honestly not sure of Florida’s stance on this. Testamentary devises are different than other kinds of contracts in that they require attestations in front of witnesses, and thus your assign may require the same formalities. Just thoughts and should NOT be taken as advice as you honestly need to connect with an estate litigation expert who’s handled one of these matters.

    Best, Steve Gibbs, Esq.

  • Alan Bloom January 5, 2021, 4:19 pm

    I am the executor of my uncle’s Will and the trustee of his Trust. Article Two of the Will states:
    2.1 Gift of Entire Estate: I give all of my property to the trustee of the XXXX Trust, created under the trust agreement executed on the same date as, but immediately before, the execution of this will, by XXXX, as Settlor and Trustee and Alan Bloom as Trustee. The trustee of that trust shall add the property disposed of under this will to the trust principal and hold, administer, and distribute the property in accordance with the provisions of that trust agreement, including any amendments and restatements of that declaration of trust that have been made before or after execution of this will.
    Does Florida require Deed to Real Property in order to transfer that real property into the Trust as part of his entire estate?

  • gibbslawfl January 12, 2021, 4:26 pm

    Hello Alan, because you are the Personal Representative and Trustee, I highly recommend that you seek professional legal advice in a consultation setting. You need an experienced expert to review the last will, trust and last recorded deed, before offering any feedback. Understand that you have potential liability in these roles and can pay estate legal fees from the trust. Let us know if we can help by connecting with Gene at info@gibbslawfl.com.

    Best, Steve Gibbs, Esq.

  • Sue Rust March 2, 2021, 5:19 pm

    What happens when the Owner of the policy dies and there is no successor Owner listed on the policy? the Insured is not a juvenile and the Estate was not Probated. The insurance co will not accept the last will and testament in place of a certified probate document. The insurance co does not specify what probate docs are needed, just that the insured should go to the probate court to learn what is needed to transfer the policy and the values to someone else.

  • gibbslawfl March 3, 2021, 12:28 pm

    Hello Sue, unfortunately this is the reason why we counsel folks regularly on how to title assets (including beneficiary designations). A probate administration will be needed if the facts are as you say. Good news is, you don’t need to know what docs are needed. The court process will take care of this and produce a court order to distribute the proceeds. We do handle all probate matters if you need assistance. Connect with Gene at info@gibbslawfl.com.

    Best, Steve Gibbs, Esq.

  • InstantVitalRecords February 24, 2023, 6:28 am

    Thanks for sharing an informative article like this. You gave us insights on how to transfer assets here in Florida. Excellent writing, indeed!