Understanding the Probate “Look Through” Rule in Florida
By: Barry E. Haimo, Esq.
May 12, 2022
Probate administration is never one size fits all. And if a trust-based estate plan was used in combination with a Last Will and Testament, it’s subject to unique considerations in Florida. In this scenario, any assets not in the trust should “pour over” from the will at the time of death.
But even though most trust assets are not subject to probate, if you forget to transfer an asset to the trust, then this combination often becomes an exception. And under these circumstances, the probate “look through” rule often applies. What exactly does that mean? And why does it matter? Let’s take a closer look.
When a Primary Beneficiary Is a Residuary Trust
Probate administration is the legal process through which a deceased person’s affairs are handled, and their assets distributed. When a trust-based estate with a will (also known as a “pour over” will) is subject to probate, the administrator needs to determine who they account to during the handling of the estate. Is it a trustee of the trust or a beneficiary of the trust?
Florida Statute 731.201.2 answers the question. As a probate administrator, you typically account to the trustee of the residuary trust as the beneficiary – not the other way around.
The Probate “Look Through” Rule: What If the Personal Representative and Trustee are One and the Same?
However, there is an exception to this general rule. And it’s this situation that establishes the probate “look through” rule.
When the personal representative of the estate and the trustee are one and the same, the administrator must “look through” the trustee and account to the trust’s beneficiaries. Otherwise, it is a conflict of interest.
More Instances of When the “Look Through” Rule Applies
- When the income beneficiary of a residuary trust is deemed an “interested person,” and has not yet received their complete distribution of assets.
- When the income beneficiary of a residuary trust is a beneficiary of the probate estate. Note that under these circumstances, the beneficiary has not yet received their complete distribution of assets (as stated above as well).
- If a surviving spouse is a trustee and a personal representative, they become a beneficiary of the trust for probate administration under the “look through” rule.
If it sounds complicated and confusing, that’s probably because it is. The probate “look through” rule is just one of many examples of how the Florida probate process is subject to multiple statutes and exceptions.
That’s why it’s imperative to have an attorney on your side who understands the Florida probate process and can help you navigate it every step of the way. Haimo Law cares about protecting your family, assets, and business.
With our 4-step unique proven process, leaving a legacy you can be proud of is easier than you think. The alternative can mean significant taxes, chaos, court, costs, conflict, and a host of unpleasant and destructive surprises. Contact us to get started today.
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose®
Email: barry@haimolaw.com
YouTube: http://www.youtube.com/user/haimolawtv
YOU ARE NOT OUR CLIENT UNLESS WE EXECUTE A WRITTEN AGREEMENT TO THAT EFFECT. MOREOVER, THE INFORMATION CONTAINED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. EACH SITUATION IS HIGHLY FACT SPECIFIC AND EXCEPTIONS OFTEN EXIST TO GENERAL RULES. DO NOT RELY ON THIS INFORMATION, AS A CONSULTATION TO UNDERSTAND THE FACTS AND THE CLIENT’S NEEDS AND GOALS IS NECESSARY. ULTIMATELY WE MUST BE RETAINED TO PROVIDE LEGAL ADVICE AND REPRESENTATION. THIS INFORMATION IS PROVIDED AS A COURTESY AND, ACCORDINGLY, DOES NOT CONSTITUTE LEGAL ADVICE.
