After the loss of a loved one, the last thing you want to worry about is which assets are and are not subject to probate. Unfortunately, understanding that distinction can still be important when it comes to protecting property, identifying what must pass through the probate process, and determining what may transfer outside of it.
The good news is that not every asset must pass through the Florida probate process. Depending on how an asset is titled and whether a beneficiary has been named, certain property may transfer automatically to a surviving owner or beneficiary without the need for a formal probate administration. These assets are more accurately described as non-probate assets. Understanding which assets pass outside probate can help families avoid unnecessary costs and time.
Below are five common types of assets that may avoid probate in Florida, along with an explanation to help you understand how Florida homestead property is handled after an owner’s passing.
First it’s important to understand exactly what probate actually is. Probate is the court-supervised legal process used to administer a deceased person’s estate. Depending on the circumstances, the probate process may involve:
Probate applies to property owned solely in the deceased person’s name without a valid beneficiary designation or other method of automatic transfer.
Whether an asset avoids probate depends primarily on:
Jointly owned property may avoid probate when the ownership arrangement includes a right of survivorship. When one owner dies, that owner’s interest automatically passes to the surviving owner or owners.
This may include:
Two common forms of ownership that include survivorship rights in Florida are:
For real estate the deed must properly establish survivorship rights. Under section 689.15, Florida Statutes, property transferred to two or more people creates a tenancy in common unless the deed expressly provides for a right of survivorship or the property is held as a tenancy by the entirety.
For example, if a married couple owns a home as tenants by the entirety, the surviving spouse becomes the sole owner when the other spouse dies. A death certificate may still need to be recorded in the county’s public records to document the transfer and update the property’s chain of title.
Joint ownership should not be used casually as an estate-planning substitute. Adding another person to a deed or account may create present ownership rights, creditor exposure, tax consequences, or future disputes.
Life insurance proceeds avoid probate when the policy names a living beneficiary. After the insured person’s death, the insurance company pays the proceeds directly to that beneficiary.
Life insurance proceeds may become part of the probate estate if:
Beneficiary designations should be reviewed regularly, particularly after:
A will generally does not override a valid beneficiary designation. For that reason, life insurance designations should be coordinated with the rest of the estate plan.
Many retirement accounts pass outside probate through beneficiary designations.
These accounts may include:
After the account owner’s death, the financial institution or plan administrator transfers the funds to the named beneficiary according to the account agreement and applicable law.
Retirement account owners should periodically confirm that:
Retirement accounts can involve significant tax consequences and, in some instances, special spousal rights. Beneficiary decisions should therefore be made with legal and tax advice appropriate to the account owner’s circumstances.
A payable-on-death, or POD, designation allows funds in a bank account to pass directly to a named beneficiary when the account owner dies.
A transfer-on-death, or TOD, designation may provide a similar method of transfer for securities and certain brokerage or investment accounts. Florida law recognizes beneficiary-form registrations for qualifying securities under Chapter 711, Florida Statutes.
POD and TOD designations may provide:
The account owner retains control of the account during life and may change the beneficiary designation, subject to the institution’s rules.
However, these designations must remain current. If the beneficiary dies first and no alternate beneficiary is named, the account may ultimately pass through probate. Beneficiary designations can also create unintended results if they conflict with the account owner’s broader estate-planning goals.
Property properly transferred to the trustee of a revocable living trust generally avoids probate.
Assets commonly placed in a trust include:
During the creator’s lifetime, the creator typically retains the ability to control, amend, or revoke the trust. After the creator’s death, the successor trustee administers and distributes the trust property according to the trust’s terms, usually without direct probate-court supervision.
Creating and signing a trust, however, is not enough. The assets must also be properly titled or transferred into the trust. This process is commonly called funding the trust.
An asset left in the deceased person’s individual name may still require probate even if the person had a valid revocable living trust. A pour-over will may direct the asset into the trust, but the asset ordinarily must pass through probate before that transfer can occur.
A revocable trust also does not automatically protect assets from every creditor claim, tax obligation, or dispute.
Florida homestead property receives special protections under the Florida Constitution and Florida law. However, saying that homestead property is simply “exempt from probate” can be misleading.
Homestead property may pass to a surviving spouse, descendants, or other beneficiaries immediately upon the owner’s death. It may also be protected from many claims against the deceased owner’s estate. Nevertheless, a probate proceeding may still be needed to obtain a court order determining:
Florida also limits how homestead property may be left when the owner is survived by a spouse or minor child. These restrictions are addressed in sections 732.401 and 732.4015, Florida Statutes.
Homestead issues may become particularly complicated when:
A court order determining homestead can also be important when the heirs later attempt to sell, refinance, or otherwise establish marketable title to the property.
Florida law uses the term “exempt property” differently from “non-probate property.” Non-probate property transfers outside the probate estate, such as through survivorship rights or a beneficiary designation. Exempt property involves property that Florida law protects for certain surviving family members during the probate process.
Under section 732.402, Florida Statutes, exempt property may include certain:
This property is not necessarily outside probate from the beginning. Instead, an eligible family member must file a petition asking the probate court to determine that the property is exempt.
Therefore, “property exempt from creditor claims” and “property that transfers outside probate” are related but legally distinct concepts.
Depending on the estate and the family’s circumstances, avoiding probate may provide several advantages:
Probate avoidance does not necessarily eliminate every legal issue. Non-probate assets may still produce disputes involving ownership, beneficiary designations, creditor claims, undue influence, or the interpretation of estate-planning documents.
Common probate-avoidance strategies include:
There is no single strategy that is appropriate for every family. A plan that simplifies one estate may create tax, creditor, or ownership problems in another. Probate-avoidance measures should be tailored to the person’s assets, family relationships, and long-term goals.
Determining whether an asset must pass through probate in Florida depends on its ownership structure, beneficiary designations, account documents, and applicable Florida Law.
Dutton & Salta represents individuals and families throughout Florida in probate and inherited-property matters. If your estate includes a home or other real property, a real estate attorney can also confirm how the deed passes that property. We can help you:
Determine whether probate administration is necessary and whether the estate may qualify for summary administration
Identify probate and non-probate assets
Establish and protect rights involving Florida homestead property
Resolve inherited real estate and title defects through a quiet title action
Resolve disputes between co-owners through a Florida partition action
Navigate disputes concerning ownership, inheritance, or the distribution of real property
If you have questions about probate administration, Florida homestead property, or inherited real estate, contact Dutton & Salta to schedule a consultation. We can review your circumstances, explain your legal options, and help you determine the appropriate next steps.
This article is provided for general informational purposes and does not constitute legal advice. Every estate is different, and Florida law may change.
Robert Salta | Founding Partner, Dutton & Salta, PLLC
Robert Salta is a Florida attorney representing clients in real property disputes, including partition actions, quiet title matters, foreclosure defense, and disputes involving inherited property. He earned his Juris Doctor from Stetson University College of Law and his bachelor’s degree from the University of Central Florida. His practice focuses on helping clients understand their ownership rights and resolve disputes over Florida real estate.
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