Why It’s Best to Have a Trust if You Own Real Estate in Florida

Many Michigan residents own a second home in Florida to escape the harsh winters. It is essential to be aware that real estate in Florida is subject to a Florida probate if it is not owned by a trust, or is otherwise titled to avoid the probate process. In these situations, your loved ones would be required to go through an ancillary probate in Florida, even if they had already been through the probate process in Michigan.

What is Florida Ancillary Probate?

Ancillary probate in Florida is the legal process that is used when a non-resident of Florida dies owning property in the state — typically real estate. While the primary probate proceeding occurs in the decedent’s home state, Florida requires a separate, secondary (ancillary) probate to transfer ownership of the Florida-based assets.

What is the Process for Florida Ancillary Probate?

Ancillary probate in Florida is required if the decedent was not a Florida resident and owned real estate or other tangible property in the state that cannot be transferred without court involvement. The process is commenced by filing a certified copy of the will (if one exists) and the domiciliary probate proceedings from the home state in a Florida court. Specifically, the ancillary probate must be filed in the Florida county where the property is located.

A personal representative — also referred to as the executor — must be appointed in Florida. This is often the same person who was appointed in the primary probate.

If the estate is small enough to qualify, Florida allows for summary administration. This process is a quicker and less expensive process than standard probate. It is generally allowed if an estate is worth $75,000 or less, or two years have passed since the decedent’s passing. If the estate is not eligible for this simplified procedure, formal administration is required — which is much more involved.

Once the ancillary probate is complete, the Florida property can be legally transferred to the heirs or beneficiaries. Notably, Florida law requires that a personal representative be represented by a Florida-licensed attorney in court.

Avoiding Ancillary Probate with a Trust

Florida real estate can be owned by a Michigan trust. This ownership by a trust will avoid the need for Florida probate — and the significant expense that can come with it. Here are the steps involved in creating a trust:

• Draft the trust instrument — To establish a trust, you need to create a trust instrument. This is the legal document that outlines the terms of the trust and specifies the property to be included.
• Fund the trust — Out-of-state property must be titled in the name of the trust. This transfers the legal ownership of the property from your name to that of the trust.
• Designate trust beneficiaries — In the trust instrument, you must specify who will inherit the property upon your passing.

If the property is owned by a revocable living trust, it can be changed at any time during your lifetime. Upon your passing, the property would be distributed directly to the beneficiaries without the need for probate in Florida.

Contact an Experienced Michigan Trusts and Estates Attorney

If you’re a Michigan resident who owns property in Florida, a trust can help your loved ones avoid ancillary probate. An experienced estate planning attorney can work with you to create an estate plan that streamlines the distribution of all your property with trusts, including Florida real estate. With office locations in East Lansing, Mt. Pleasant, Grand Rapids, and Detroit, The Gallagher Law Firm offers a broad scope of estate planning services to individuals and their families. To learn more about how we can assist you, contact us online, call (517) 853-1515 or email bpg@thegallagherlawfirm.com.