FLORIDA PROBATE OVERVIEW
THE PROBATE PROCESS GENERALLY
HOW LONG WILL IT TAKE?
FILING THE WILL
WHO IS THE PERSONAL REPRESENTATIVE, AND WHAT DOES HE OR SHE DO?
PROBATE PROPERTY (the “Probate Estate”)
TYPES OF PROBATE PROCEEDINGS IN FLORIDA
GETTING PROBATE OFFICIALLY STARTED
BUSINESS OWNERSHIP AND INTEREST OF THE DECEDENT
FAQ & COMMON MISCONCEPTIONS
Before you even start to worry about probate, there are three things that you’ll need to take care of:
1. Funeral home expenses and arrangements: Funeral homes tend to want payment up front or solid assurances of payment. Often, a person dies having a prepaid funeral home account, which certainly helps alleviate some of the hassle; you can just go to the funeral home that holds the account. Alternatively, some people might have a bank account with a “pay on death” provision that names a person who can have immediate access to the account for the purposes of funeral home expenses (which gives you more leeway on which home to use). If neither of these is the case, you might be able to access a joint account if you are the decedent’s spouse. If the estate isn’t liquid, and you are unable to come up with the funds to pay the funeral home in advance, they will often take assurances of future life insurance payouts in order to proceed with the arrangements.
2. Notify the deceased’s income sources: Generally, a funeral home will take care of this but to be on the safe side, it is best that you do so too. Contact the VA, Social Security Administration, and any other source that may need to know that the person has died. This avoids the hassle of having to send back payments.
3. Review the probate checklist. (VIEW PROBATE CHECKLIST) These are the things you will want to try and bring in when you visit a probate attorney so that he or she can properly guide and advise you.
Generally, when a person dies, his or her debts and property must be taken through a process called “probate.” The Florida Bar defines probate as “a court-supervised process for identifying and gathering the assets of a deceased person (decedent), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries.” This process will happen in the circuit court for the county where the person was domiciled when he or she died
There is a common misconception that if a person has a will, then the probate process is not necessary. This is not true. Whether or not a person has a will, this court-supervised process will need to be carried out (with certain exceptions). Broadly, the process will include the following:
- The appointment of a “personal representative” (PR) to work with the court on behalf of the decedent’s estate throughout the probate process. The PR is also sometimes called an “administrator” or “executor.” Usually, a person who has died testate (that’s to say, with a valid will) will name the person(s) he or she wishes to serve as the PR.
- If there is a will, determination of whether or not the will is valid. Also, if there are multiple wills and/or “codicils” (a formal term for changes or amendments to a will), there will need to be a determination regarding which will applies and whether the codicils are valid.
Gathering, listing, and valuing the decedent’s assets.
- Listing the decedent’s debts and giving notice to his or her creditors that the estate is being taken through probate. This will usually include giving notice in a local newspaper as well as directly contacting ascertainable creditors.
- Paying the decedent’s debts (first) and then distributing the remainder, if any. If the decedent had a will, the remainder will generally be distributed to those named in the will; if the decedent did not have a will – in other words, if he or she died “intestate” – then the remainder will be distributed to those heirs that are identified and listed in Florida law.
An average formal administration will take about a year. It will very rarely take less than six months, and sometimes it can last for years if there are will disputes or if the estate is particularly large and complicated. There are other circumstances that may cause the process to last longer, and these should be discussed with your probate attorney – although such circumstances cannot always be anticipated at the beginning of the probate process.
The person who has custody of the original will must submit it to the clerk in the circuit court for the county where the decedent was domiciled at the time of death (in other words, where he or she was a resident) within 10 days of receiving notice of the death. In certain circumstances, a copy may be submitted to the court for probate, but this is a last resort and requires a special petition and hearing by the court. Absence of the original will might indicate that it was physically destroyed on purpose by the decedent, which would mean that the will was rescinded and is no longer valid. The person who deposits the will must provide either the date of death or the decedent’s social security number.
You do not need to wait until you hire the probate attorney to file the will, but it may be advisable to do so if it is within the 10-day time frame; it may be the case (though it rarely is) that probate is not necessary.
The personal representative, or PR, is the individual who is appointed by the court to work with the court in marshaling the estate’s property, valuing all of the property and assets, paying the creditors, and distributing the remainder to the beneficiaries.
Generally, a will appoints the person whom the decedent wished to act as the PR. If someone dies without a will, then the Florida Statutes set forth an order of priority of who shall serve: first, if there was a surviving spouse, he or she will serve. Otherwise, the majority of people who have an interest in the estate’s property can elect the PR or, alternatively, the family member who is closest in relationship can serve.
Of course, a person can decide that he or she doesn’t want to serve as PR. It can be a difficult job, as the PR has to work with the court, with family members, with creditors, and will be required to take possession of property, value assets (which might include formal appraisals), work with accountants, take care of income and other taxes, sell real estate when necessary, and – if the deceased had business interests – carry on business operations and/or value and transfer possession and ownership of any businesses in which the deceased had an ownership interest.
You might ask, considering the complexity that the process might pose, the amount of effort required, and the amount of time it might take, why would anyone want to serve as PR? Answers to the question vary; some might feel a personal or fiduciary obligation to the person who passed away or to his or her family, while others might find satisfaction in the fact that the PR is entitled to compensation from the estate.
The PR is entitled to compensation that amounts to a certain percentage of the value of the estate. The percentage varies based on how much the estate is worth. The Florida Statutes set forth a list of the priority of creditors. Payment of the PR is, in fact, at the top of the list; the PR’s payment gets priority over virtually all other creditor claims.
The primary thing that a PR has to remember as the process goes along is that he or she is a considered a “fiduciary” under the law. This means that the PR has a duty to responsibly take care of the estate’s assets and distribute those assets diligently and expeditiously. While a PR is general immune from liability for the actions he or she takes in the course of that role, there are certain circumstances under which the PR can be held personally responsible for the improper handling of assets.
Property that must pass through the probate process includes the following:
- Solely-owned real estate of the deceased;
- Life insurance policies that don’t name a beneficiary;
- The deceased’s bank accounts;
- Life insurance policies with no named beneficiary or naming the estate as a beneficiary.
Some property does not belong to what’s called the “probate estate,” and so in certain instances, probate may not be necessary. The following property automatically passes by operation of law upon a person’s death, and so it does not have to be taken through the probate process. (Please note, however, that some of this property is not immune from the claims of creditors! If the probate estate is not sufficient to pay creditors, those creditors may make claims against some of the property despite that it doesn’t pass through probate. Some will also be used to determine that value of the “elective estate” that a spouse may choose to take. Elective estate is discussed below.)
- Jointly owned property with a right of survivorship, or property owned as tenancy by the entirety; these types of property will pass automatically to the surviving owner(s);
- Revocable and irrevocable “inter vivos” trusts (trusts made during the deceased’s lifetime, also called “living”” trusts). Note that “testamentary trusts” that are made as a part of the terms of a will ARE part of the probate estate and must pass through probate;
- Life insurance payouts, retirement death benefits, and other assets that name a beneficiary (in other words, things that are deemed “payable on death”);
- Life estate deeds to real estate that name a remainder beneficiary. This includes what’s called a “Lady Bird Deed” (named after First Lady Johnson), which is a type of deed that allows property to pass in a way that avoids Medicaid claims against the estate.
There are four basic types of probate proceedings and ways to dispose of the estate. The type of probate proceeding used will depend on the type and amount of property in the deceased’s estate. Please note that while summary administration may seem like a good way to take a small and simple estate through probate, it may not be an advisable choice because summary administration doesn’t provide the same creditor protection as formal administration. The best type of administration for the estate can and should be discussed with your probate attorney.
Summary Administration – This is a shorter, more streamlined process for smaller and simpler estates with a value not exceeding $75k. Also, if a person has been dead more than two years, his or her estate can be taken through summary administration regardless of the value of the estate. Please be aware that while summary administration may seem like a good idea, it may not be the best way to go because it doesn’t provide the same level of creditor protection. In fact, if the decedent recently died, creditors can come back within two years – even after the estate is closed and everything is distributed – and file a claim against the estate.
Formal Administration (most common) – There is no upper or lower limit on the value of the estate. It is a longer and more thorough process than summary administration, and it generally takes about a year (on average) to complete. As noted above, it can provide more creditor protection than summary administration by triggering deadlines within which claims must be made or be waived forever. In many instances, a formal administration may be desirable even if the estate essentially has no property to distribute; this is often called a “dry” proceeding.
Ancillary Administration – This is a type of proceeding for a person who owns real property in Florida but is not a Florida resident (in other words, whose “domicile” is in another state). It will typically be performed in conjunction with a probate proceeding in another state.
Disposition Without Administration – This is a way of taking care of the deceased’s assets without any type of formal administration. There are very few circumstances in which this type of proceeding is available.
Hire a Florida probate attorney. Unless you, the PR, are the only individual benefiting from the will (or, in the absence of a will, you are the sole rightful heir), you must be represented by a Florida probate lawyer. There are several important reasons why you want to do this as quickly as possible. For example, in situations where the decedent owned property in more than one state, or perhaps when there might be a dispute between interested parties as to which county (or even state) was the decedent’s domicile, it is important to start filing with the court as soon as you can to avoid losing your opportunity to have probate heard in the best venue. What’s more, having an attorney makes it much easier to know and understand what to do during an often difficult and complicated time.
Protect the estate’s assets before probate is open. This might include taking possession of any vehicles, since an accident in one of the decedent’s vehicles might subject the estate to liability that could greatly impact its overall value. Also, make sure the decedent’s valuables are secure and not subject to theft or tampering. All this can be done informally by friends and family – and usually is – but if there is a dispute regarding the proper way to protect property before the probate estate is officially opened (see below for those steps), then the court will need to step in and appoint what’s called a “curator” to secure the assets and perform any other preliminary steps before the PR is officially named and the estate is opened with the probate court.
1. Filing the petition: First, your probate attorney will file a petition with the circuit court to open the estate. The petition asks for two primary things:
1.) that the validity of the will be recognized, if there’s a will and
2.) that the court appoint a personal representative to act on behalf of the estate.
2. Filing an oath of office: This is a sworn statement that the personal representative makes acknowledging his or her duties and responsibilities.
3. Bond. Generally, the PR must put up a bond. This requirement can be waived in the will or by the court.
4. Notice of administration: Notice of the probate administration must be given to the decedent’s surviving spouse, beneficiaries, trustees, and anyone who may be entitled to exempt property (some property is exempt from probate administration, such as a maximum of two of the decedent’s vehicles). Service of this notice can be (and often is) waived by those entitled to the notice.
5. Letters of administration (LOAs): Once the above steps are taken, your probate attorney will furnish a proposed order and proposed letters of administration to the judge, who will review them and then, if everything is in order, will sign them. These LOAs allow the personal representative to interact and deal with the relevant entities while taking care of the estate, such as banks, mortgagees, and other creditors.
6. Notice to Creditors (Formal administration only): Once you have the LOAs, you can start giving notice to creditors. First, you will publish two notices in the local newspaper, each a week apart. Then, for all “reasonably ascertainable” creditors of the estate, you must also give them direct written notice. Your probate attorney can give you some guidance on how diligently you need to search to make sure you’ve found all who might be reasonably ascertainable. These notices start a three-month clock during which the creditors must file a claim against the estate or else be forever barred.
It’s important that the personal representative responsibly manage the decedent’s business interests, as they constitute part of the estate. Usually, these interests are easy to ascertain. Sometimes, however, a person engages in sole proprietorships or informal businesses that may be a bit more difficult to immediately uncover. For this reason, it is important to thoroughly look through bank accounts and tax returns and to talk to relevant people – the surviving spouse, accountants, etc. – to make sure all business interests have been identified.
At this point, the PR needs to decide whether it would be in the business’s best interest to be sold, wrapped up, or continued until ownership can be transferred. For LLCs and corporations, the PR can continue the business without getting court approval for as long as the administration continues. For a sole proprietorship or informal business, the PR can continue the business for up to fourth months. If the PR determines it’s in the best interest of the business to continue longer than four months, it is necessary to petition the court and state the reason for the continuation and the amount of time requested to continue the business.
For corporations and other businesses registered with the state, documents and records should be updated to reflect the PR’s substituted involvement (i.e., as the new director or owner of the business) by going to SunBiz.org. Sometimes, other people with interests in the business might balk at your new involvement; be aware that you have a legal right to inspect all records necessary for you to understand the financial and other workings of the business for the purpose of your PR duties.
My loved one died with a will, so I don’t have to bother with probate court…right?
No. Even if a person dies testate (with a will), the person’s estate still has to be taken through probate court proceedings except in very rare circumstances (called a “disposition without administration,” where the decedent leaves only small amounts of exempt personal property like furniture and automobiles, has no creditors, and where the value of any remaining property does not exceed the amount of funeral expenses and medical expenses for the decedent’s last 60 days of life).
Many people mistakenly believe that if there’s a will, then there’s no need to get the courts involved; this couldn’t be further from the truth. While a will may be helpful in directing how a person’s assets will get distributed, there are still many things that will need to be overseen by the probate court, like proving the validity of the will, handling the estate property between the time of death and the time of distribution, paying creditors’ claims, and generally enforcing the terms of the will.
Is a “Reading of the Will” something we have to do?
No. There is no requirement in Florida (or any other state, for that matter) that you have to gather family and other beneficiaries together for a ceremonial, out-loud reading of the will. Interested persons (beneficiaries and creditors) will be notified of the administration of the estate and, since the will is deposited with the clerk as part of that administration
Can a person who has power of attorney simply transfer all of the decedent’s property without going through probate?
Any powers of attorney signed by the decedent become void and ineffective at the time of his or her death, so no. The person who had power of attorney during the decedent’s life has no authority to transfer property after the decedent’s death; only the person appointed by the probate court as the personal representative has this authority.
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