One of the ways that we counsel clients in our estate planning practice is how to title assets to avoid probate. If an asset is titled in a certain way, the asset will not be considered part of a person’s probate estate when he or she passes away. Also, consideration of jointly held assets is important for probate administration in Florida. A asset may or may not be part of a Florida probate estate depending on how the asset is titled. Therefore, it is important to understand the effects jointly held asset have on estate planning and probate in Florida.
Types of joint ownership of property in Florida
First, we need to review the main types of joint ownership. Here are the three types of joint ownership in Florida:
- Tenants in common – Owners of property that is titled as tenants in common own an undivided share of the property equal with the other owner, unless otherwise stated in the documentation of title (deed, title, etc.). The best way to think about tenants in common ownership is like a share of stock in a corporation. If you own a share of stock, you own just that share, and you can freely transfer that share to any other person.
- Joint tenants with right of survivorship- Owners of property titled as joint tenants with right of survivorship each own a share of the property equal to the other owners, similar to a tenants in common ownership structure. However, when one of the joint tenants dies, his or her ownership interest in the property automatically transfers to the other joint tenant owners. For example, if a couple owns a house as joint tenants and the wife passes away, her interest in the house is automatically transferred to the husband.
- Tenants by the entireties – Property in Florida owned by tenants by the entireties can only be owned by a married couple. Other than this restriction, property owned by tenants by the entireties is very similar to property owned by joint tenants with right of survivorship. An additional benefit to property owned by tenants by the entireties is that in order for a creditor to execute upon the property for an individual owner’s debt. Only creditors of both spouses can execute upon property that is owned by tenants by the entireties.
For the purposes of probate and estate planning in Florida there are several relatively simple things to keep in mind when considering the effects of joint ownership of property. First, property owned as tenants in common needs to go through the probate process in order to be transferred. Just like a share in a corporation, an owner’s share as tenants in common is an undivided share in the property owned, and that share does not automatically get transferred upon owner’s death.
Second, property owned as joint tenants with right of survivorship or tenants by the entireties does not need to probated for the interest of the deceased owner to be transferred. This is what these types of joint ownership are often used for estate planning purposes to avoid probate. If an owner of part of property owns its share as joint tenants or tenants by the entireties, the ownership share automatically transfers to the other owner(s) at the time of death. In order to make the transfer official, the other owner needs to record a death certificate of the deceased owner in the official records, which should transfer the property as required. Property owned as joint tenants or tenants by the entireties is not part of a decedent’s probate estate and should not be included in a probate inventory, unless extraordinary circumstances exist.
This blog post is not meant to be an exhaustive discussion of the joint ownership of property in Florida. Joint ownership can be a complex subject and we have only completed a cursory examination in this post. Many other factors may affect the joint ownership status of a piece of property. Therefore, it is extremely important that if you have any question about the joint ownership of property, you should talk with an attorney. If an owner of property has passed away and you have questions about whether property needs to be probated, talk to an attorney. Finally, if you are thinking of doing estate planning and want to take advantage of the benefits of joint ownership as part of your estate plan, make sure to talk to an attorney before taking action. In any of these cases, if mistakes are made, it will be more costly to fix or may not have the legal effect you intended.
If you are interested in a review of your estate plan, or would like to make a new estate plan, contact our office today to schedule a free consultation. If you have recently lost a loved one and think you may need to conduct probate, contact us today for a free consultation. During our consultation, our attorneys will be able to walk you through the estate planning or probate process, provide an estimate of the cost, and answer any questions you may have.
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