My dad and I own a house together in Florida. If he dies, do I need to do anything special? Does the house need to be in his will?

We both live there together and it is our primary residence. I am 44 and Dad is 74.

Asked by Paulmiller102

3 Answers

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Answered by Dave Bradley, Investment Manager (Financial Advisor) in North Charleston, SC
Hi Paulmiller102,

When someone passes, their property generally goes through probate (a court-supervised process of settling a deceased person's personal and financial affairs). A simple will rarely avoids probate. An estate plan that is properly set up avoids probate. Most of our folks use a Revocable Living Trust.

You could also set up a transfer on death beneficiary (TOD) or a pay on death beneficiary (POD). These pass directly to the named beneficiary, avoiding probate.

Ask your father to discuss these options and the particulars of your situation with his Attorney or one that specializes in estate planing.

Feel free to contact us directly for more information. No obligation.
It's not what you make, it's what you keep that determines your lifestyle. | 05.16.16 @ 01:17
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:34
I like Dave Bradley's answer, and I'd like to add a few comments to his.

But first, I must preface what I say as generic advice based on California probate procedures and California estate planning, where I'm familiar with the laws and am a licensed/registered financial professional. I cannot give you any specific recommendations for your own circumstances, without first obtaining both insurance and securities licensing/registration in Florida.

Probate Court is where family members go to get approval for dividing up the deceased person's assets, unless there is a will, a revocable trust, or some other "titling" to the asset, such as TOD or POD as Dave says.

It's important that you and your father talk about his plans for his "estate" when he's gone. The estate is a fancy word for all of his assets minus all of his outstanding debts. It includes the house, bank accounts, brokerage accounts, life insurance and any other financial "tool" that your Dad may own.

If your Father dies with a simple will or no will and no trust, you will have to hire an attorney and be represented in Probate Court. Each state has it's own rules for Probate, but you and the other heirs together are responsible for paying substantial Court fees, which are frequently a percentage of the entire value of the estate. That's why Dave suggested the other ideas, all of which let you and other heirs avoid Probate Court.

There's one other thing you and your Father may have already done, that's important. How is the ownership of the house titled? In his name only, or both names in Joint Tenancy, with Right of Survivorship. If it's the second form of ownership, you legally become the surviving owner after your Father's passing. If he's the only one on the title, then the house will force you to go through Probate Court. Most states allow members of the same family to re-title the real estate with little or no fees. Here in California, you'd have to also engage a Real Estate Title Company to provide a new Title Insurance Policy AND do all of the paperwork (and file it on your behalf) required by the local city, town, or county.

When your Father reaches the end of his life, you will have to obtain a death certificate from the local government (usually the Coroner), and submit it to the local government entity that handles title changes -- usually the County Recorder's office here in California.

If at all possible, you should want to avoid Probate Court, because of the costs, and because the Judge ultimately orders who gets what. You don't want the Judge making the decisions for the family, you want to set up legal methods of avoiding Probate, including the Joint Tenancy with Right of Survivorship for the house, OR get a revocable living trust which owns all of the assets, including the house. This again means re-titling the house so it's owned by the "First Name, Middle Name, Miller Revocable Living Trust."

You should take your Father to meet with an estate planning attorney, and get a sense of his or her fee structure and advice on the tax issues and on the most expeditious way to avoid Probate. Ask him or her about Transfer on Death or Pay on Death financial assets and Joint Tenancy with Right of Survivorship on the house. If your Father has a retirement account, pension, or IRA, you and other heirs should be named beneficiaries on each account. If he's in good health, you may also want to consider a small life insurance policy for him to pay all of the lawyer's fees, Probate fees (if any), licenses.

The attorney will prefer that you allow him or her to prepare the Trust documents, which could cost you a few thousands of dollars. If you meet with the attorney, and only ask for his or her advice in a one hour meeting, you'll have to pay for that hour. Most attorneys will provide a limited consultation (15 to 30 minutes) without billing a fee -- basically the attorney's time to sell you on hiring him or her.

Finally, your Father should have a document typically called "Revokable Power of Attorney for Healthcare Decisions", naming you with Power of Attorney to make healthcare decisions for him if he were to become unable to communicate for himself.

I'm not licensed to give any financial advice in Florida, so I'm giving you California recommendations, where I am licensed. | 05.17.16 @ 22:16
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:34
Answered by Jeffrey Gustafson, Financial Adviser in Campbell, CA
Do you both own the house as Joint Tenants with Right of Survivorship or as Tenants in Common? | 05.17.16 @ 23:04
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:34
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