FAMILY ESTATE PLANNING

Protecting Your Assets And Your Legacy

PROBATE

The Basics

In Florida, like most states, probate is a public process requiring court management and approval from beginning to end – including admitting a valid will, handling creditor claims, and finally approving distribution of estate assets to beneficiaries.

The probate process starts when a deceased person’s Will is submitted to a Probate Court to prove that the contents of the Will are valid. Among other necessary terms and requirements, a Will generally includes the name and personal information of the person creating the Will (the settlor), a description of the settlor’s assets, property, and debts (the settler’s estate), directions on the management of the settlor’s estate after the settlor’s death, a named personal representative to manage the settlor’s estate after the settlor’s death, and beneficiaries to receive the settler’s assets after the settlor’s death. Click here if you want to learn more about a last will and testament.

After a Will is submitted to the probate court, the assigned judge will decide whether to admit or deny the Will. If the Will is admitted to probate, the judge oversees the entire process of distribution of the settlor’s estate in accordance with the terms of the Will.

If a deceased person passes away without executing a Will (referred to as passing away “intestate”), or if the probate judge declares the person’s Will to be invalid, the deceased person’s estate is distributed in accordance with Florida law - whether or not the terms of the law are what the deceased person (or their spouse and children) would have wanted.

Types of Probate

Every person’s estate is different and the type of probate necessary to administer a deceased person’s estate will vary based on certain factors. Smaller estates can generally be distributed without little to no court oversight. Larger, more complex estates; however, will require a more formal administration process.

Disposition Without Administration

If a deceased person owned no real estate, held little to no money, and possessed a minimal amount of personal property, then their estate would qualify for an informal probate process and provide for relatively quick and painless transfer of that property to the person(s) entitled to receive it.

Summary Administration

A Florida estate can qualify for summary administration under only two circumstances. The first is when a deceased person’s estate has less $75,000 in non-exempt property (typically, assets other than the descendant’s homestead real estate). The second is when a deceased person has been dead for more than two years – however, the decedent must have died debt-free or the decedent’s creditors must all agree to allow the estate to proceed with a summary administration.

Formal Administration

If a deceased person’s estate does not qualify for disposition without administration or summary administration, then their estate must go through formal probate proceedings. In Florida, formal probate administration is generally more complex, require more Court oversight, and necessitate the need for all parties involved to hire legal representation for assistance in determining their rights.

If a decedent’s family cannot agree on a formal administrative plan – including nomination of personal representative, payment of decedent’s debts, settling creditor claims, validity and rights of potential heirs, and distribution of estate assets – then a formal probate administration will end up being very lengthy and very costly to all parties involved.

Unfortunately, the longer and more expensive the probate administration, the more likely each person involved will incur higher out-of-pocket expenses and the more likely the decedent’s estate will be diminished. Certainly, this could not have been the intended goal of the decedent or their family and loved ones.

It is important to note that until the Court approves distribution of estate assets and closes the proceedings, all of the decedent’s non-exempt assets are frozen and generally inaccessible to the family or heirs. As such, if someone is trying to enforce their rights to the estate, including the decedent’s spouse or children, they may initially need to come out of pocket for their legal fees and costs.

Before you freak out, the decedent’s family home will not be taken away from a decedent’s family during probate, so long as it properly homesteaded and/or jointly owned with a spouse or another person. Therefore, the decedent’s family can stay in their home and not fear being kicked to the curb.

Similarly, funds held in certain bank accounts that are jointly owned by the decedent and another person (often their spouse), bank accounts that named a pay-on-death (POD) beneficiary, and investment or retirement accounts with a named beneficiary will generally pass outside of probate. Life insurance proceeds also generally pass to the named beneficiary outside of probate. There are exceptions that may prevent otherwise exempt property from passing outside of probate and these circumstances should be discussed with an estate planning lawyer and other appropriate business professional.

Not all formal administrations involve family in-fighting, numerous court proceedings, and excessive legal fees. If a decedent’s Will was properly drafted and all parties involved agree on the administrative plan – including nomination of personal representative, payment of decedent’s debts, settling creditor claims, validity and rights of potential heirs, and distribution of estate assets – then a formal proceeding should not be too worrisome, costly or lengthy.

Ancillary Administration

If you die while living in one state but own real estate or property in another, your estate must go through court-mandated probate proceedings in both states. Although each state will administer only the property located in their jurisdiction, conducting two separate court proceedings becomes costly, may tie up the decedent’s assets for a longer period of time, and may take away more money from a decedent’s heirs.

Some More Notes

Florida’s probate process should not be undertaken without legal representation. In fact, Florida law requires nearly every personal representative to be represented by an attorney, with only very limited exception. Additionally, if you believe you are entitled to all or a portion of a decedent’s estate, you should hire a lawyer to help you stake your claim. Going it alone may result in filing untimely, incomplete or improper paperwork, leaving you with nothing.

Probate may be beneficial for some smaller estates and can actually help expedite the distribution process. Another benefit of probate is that it gives a decedent’s creditors only three (3) months to file a claim against the estate. If a claim against the estate is not filed within that time, or if a rejected claim is not subsequently litigated according to Florida law, the creditor will forever lose their rights against the estate.

Proper estate planning can help you and your family avoid the lengthy, costly and aggravating Florida probate process. One way is through the use of a living trust. Generally, a living trust costs less than probate, provides for quicker and easier distribution of inheritances to heirs, and gives the decedent’s family more privacy. Click here to learn more about trust-based estate planning.

If you are a personal representative of a family member's or loved one's estate, or believe you hold rights to a decedent's estate, and need assistance with Florida's probate proceedings, please contact me today!