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Probate

THE FUNCTION OF PROBATE

In Florida, probate administration is the court-supervised procedure for the identification and collection of the assets of a deceased person, the payment of that person’s debts and the transfer of the assets to beneficiaries or heirs after these payments. Generally speaking, the cost of the probate proceeding, funeral expenses and medical bills associated with the deceased’s death are paid from the assets first, then other outstanding debts are paid and finally the remaining assets are distributed to the beneficiaries or heirs. If there is a will, ownership of the probate assets will be transferred to the beneficiaries of the will. Without a will, ownership of the probate assets will be distributed to the deceased’s heirs according to Florida law.

PROBATE ASSETS

The only assets that are subject to a probate administration are those assets which were owned in the name of the deceased or those jointly owned assets which did not have any provision for automatic transfer upon death, such as a beneficiary/payable on death designation or joint tenancy with rights of survivorship.

THE LOCATION OF THE PROBATE ADMINISTRATION

The petition to initiate the probate administration along with the will, if there is one, must be filed with the clerk of the circuit court in the county in which the deceased resided at the time of death. The person or

entity in possession of the will, called the custodian, must deposit the will with that court clerk within ten (10) daysof learning of the death. While there is no fee to deposit the will, there is a filing fee that must be paid to the clerk upon the initiation of the probate administration, whether it be with or without a will. A circuit court judge will then determine the validity of the will or, if there is no valid will, make a determination as to the rightful heirs of the estate. If the will designated a personal representative, the judge will appoint the person or entity nominated in the will, typically a bank or trust company, if legally qualified to serve. If there was not a valid will, the surviving spouse has the priority to be named personal representative. If the spouse chooses not to serve or there was no spouse, the person or entity agreed upon by a majority of the estate’s heirs will then be appointed. If there is no such agreement, the judge will appoint the personal representative, usually after a hearing.

THE RIGHTS AND OBLIGATIONS OF THE PERSONAL REPRESENTATIVE

Generally, the personal representative is authorized by the court to take charge of the probate estate. First, the personal representative must identify, gather, assess the value and protect the assets subject to the probate administration. Then the personal representative is responsible for a search for creditors of the estate, notify these creditors of the time limits for filing a claim on the estate, object to invalid claims against the estate, defend lawsuits brought by creditors and pay valid creditor claims from the assets of the estate. The personal representative must also provide proper notice of the estate to unknown creditors and others who may have an objection to the administration of the estate. The personal representative has the responsibility for the filing of tax returns, the payment of taxes due and the payment of the administration expenses. If necessary, the personal representative can similarly retain attorneys, accountants, appraisers, investment professionals and any other professionals to assist in the proper administration of the estate. After all taxes and creditors have been paid and all objections resolved, the personal representative will then make those payments, as mandated by Florida law, to the deceased’s surviving spouse and/or family. The personal representative can then make the distributions to the beneficiaries of a will or heirs of an estate without a will and close the probate administration. Mismanagement or dishonest conduct by the personal representative may create liability to the beneficiaries or heirs for losses caused and harm suffered.

THE ROLE OF THE ATTORNEY FOR THE PERSONAL REPRESENTATIVE

According to Florida law, the personal representative is required to be represented by an attorney. Even the simplest of probate estates encounter legal issues which are new and uncommon to non-attorneys or even attorneys without probate experience. The personal representative’s attorney will provide advice to the personal representative on the obligations and rights, under Florida law, of the personal representative in the probate process. The attorney represents the personal representative and does not represent any beneficiaries or heirs of the estate. Because the attorney represents the personal representative, the choice of attorney is that of the personal representative and any provisions within the will mandating that a certain law firm or attorney represent the personal representative are not valid or enforceable.

CREDITORS OF THE PROBATE ESTATE

An important role of a probate administration is to ensure that the deceased’s creditors, who have valid claims and present them properly according to Florida law, are paid in an orderly fashion. The personal representative is responsible for making a diligent effort to give notice to known creditors and give them an opportunity to file claims within the estate. Creditors who were noticed generally have a short period of time to file a claim, the personal representative can object to the claim and if the creditor seeks to pursue the claim after an objection the creditor must then file a lawsuit against the estate. The proper claims of creditors, including taxes and expenses of the administration of the probate estate, will have to be paid prior to any distributions to beneficiaries and heirs. The personal representative will be required by the court to report on claims filed and their disposition.

SURVIVING FAMILY MEMBERS RIGHTS TO THE PROBATE ESTATE

The surviving spouse and minor children, in most circumstances, will be entitled to the distribution of estate assets even if the deceased has attempted to disinherit them. The surviving spouse has special limited rights to the deceased’s home and also has rights to a specified percentage of the estate, called the elective share. The surviving spouse and/or the deceased’s minor children may also have rights to a family allowance and to estate property which may be exempt from creditor’s claims. The rights of the surviving spouse can be waived prior to death by special agreement. Also, if the deceased got married or had children after having made the will, which obviously did not make provisions for such spouse or children, such omitted family members may still be entitled to a share of the probate estate. These rights are created by Florida laws and the advice of an attorney is recommended to ensure the existence and proper enforcement of such rights.

COMPENSATION FOR THE PERSONAL REPRESENTATIVE AND PROBATE ATTORNEY OF RECORD

The personal representative, probate attorney and other professionals who may have been retained to assist with the administration of the estate, like accountants, appraisers and investment advisers, are entitled to reasonable fees. The personal representative is entitled to a fee that is either set forth specifically in the will, set for in a separate contract, agreed upon between the personal representative and the beneficiaries or heirs, an amount set by Florida law or determined by the judge.

ABBREVIATED PROCEDURES FOR SMALL PROBATE ESTATES

A summary administration is available to those with estates below a statutory minimum value, have assets which are exempt from creditor claims, have no creditor’s claims, are agreed to by the estate’s creditors or if the person has been deceased for more than two years. Another alternative to a full, formal probate administration is a disposition without administration which is available to estates with solely assets which are exempt from creditor claims and are of a value which is less than the costs of the final illness and funeral.

TRUST ADMINISTRATION

If the deceased individual prepared and funded a revocable living trust, the trustee will be required to administer the trust in a similar fashion to a probate administration, but with less or no supervision by the court. The trustee may be required to pay the estate’s expenses, pay valid creditor’s claims and pay federal taxes, if any, from the assets of the trust. To initiate the administration, the trustee must file a notice of trust in the court clerk’s office in the county of the deceased’s residence on the date of death. This notice will identify the deceased and the trustee. This is necessary to put estate creditors on notice of the existence of the trust and of the right to make a claim against the estate. The trustee will perform most of the same tasks that the personal representative of a probate estate are responsible for, but the trustee will not be required to file any documents, other than the notice of trust, with the circuit court.

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