Using Deeds to Avoid Probate in Florida
How can you take advantage of Deeds to avoid probate? Well, deeding your home to your revocable living trust is one of the easiest ways to have the home avoid probate. Each particular asset you own needs to be accounted for in estate planning with regard to probate avoidance. For instance, property held jointly and/or as husband and wife automatically bypasses probate without any additional planning. Life insurance and retirement accounts bypass probate if they have the correct beneficiary designation and the particular beneficiary is alive at the policyholder’s passing. For a home to bypass probate, it must be deeded to a revocable living trust. A revocable living trust can be created with your existing estate plan or with a new estate plan.
There are several common types of deeds in Florida. The most protective deed is the warranty deed. The warranty deed comes with the following built-in covenants:
- Covenant of seisin (the seller warrants that he or she has good title to convey the property);
- Covenant against encumbrances (the seller warrants that there are no liens, restrictions, etc. on the property at the time of the conveyance);
- Covenant of quiet enjoyment (the seller warrants that the buyer will enjoy the property without claims from third parties);
- Covenant of further assurances (seller warrants that he or she will cure any defects in the title); and
- Covenant of warranty forever (seller warrants that he or she will defend the title of the property, if challenged, forever).
In foreclosure, a buyer will generally get a special warranty deed (also referred to as a limited warranty deed). In a special warranty deed, the seller warrants that he or she has done nothing to encumber the title to the property, but does not provide further assurances or guarantees with regard to the seller’s predecessors. A quitclaim deed does not provide any warranties regarding the quality of the interest conveyed.
Once the revocable living trust is created, you may deed the property right to the trust, as early as the date of creation. You should also have special provisions in the deed and revocable living trust reserving the right to continue your claim to the homestead exemption. Deeding the property will require paying nominal recording fees and documentary stamps and may take anywhere from two weeks to a month depending on the backlog in the recording department.
Contact Capital Planning Law, PLLC for your complimentary consultation to discuss your estate planning, business law, probate, guardianship and/or real estate needs.