Detailed estate planning vital for second-home owners in Florida
With its year round sun and countless activities, Florida is an ideal location for a second home. While many people choose to spend winters in its warmer temperatures, many never permanently move from their homes further north. As a result, Florida is not their “domicile” when they pass away. Accordingly, heirs will file probate proceedings in the home state with the thought that it will button up a parent or grandparent’s estate, including any holdings they have here.
Unfortunately, many heirs of second-home owners in Florida have come to find out that they cannot sell the real estate without conducting a second probate in Florida. This realization can upset existing buy-sell agreements and cause thousands of dollars in transaction costs. These issues are unfortunate, especially when some simple estate planning can prevent the quagmire.
While probate proceedings in a decedent’s home state may very well allow most of a person’s property to be lawfully conveyed, Florida real property transfers requires a separate probate. This additional administrative step can be avoided, though, through several different strategies.
First, a second-home owner can transfer the real property to a trust. Since the trust property is considered personal property, as opposed to real property, the trustee may convey it without opening a second probate. Alternatively, a second-home owner may transfer the real property to his or her heirs and retain a life estate. This way, the owner retains a legal interest in the property through his or her life. Upon death, the transferees’ interest in the property automatically springs into action.
The non-resident probate problem is just one of many issues which can arise during the administration of an estate. While these issues can be resolved, they are often costly and time-consuming. As a result, it is highly recommended that individuals take the time to learn about their exposure to certain legal quirks so they may avoid turmoil through a carefully crafted estate plan. Local Lee lawyers can help both residents and non-residents understand how Florida laws may affect them and their current estate plan.
Source: Examiner, “Avoiding probate: the Non-resident problem,” Michael Posner, July 17, 2014