In this article we’ll keep it short and sweet, reviewing just the most important parts of the Florida Probate Process. After all we’re home buyers here not attorneys, but due to the regularity of handling the probate process for many of our clients we know the ins and outs – and we will break it down for you step-by-step into layperson terms. We know it can be extremely overwhelming dealing with the recent death of a loved one, this guide will give you all you need to keep the attorney (yes hiring an attorney is required to probate an estate) in check along the way.
P.S. If you don’t want to hire (on average $3,000-$8,000) the attorney fills out a form below and we likely can cover those legal fees for you, so it’s nothing out of your pocket (just $ into it).
What are the Probate Steps In FL?
First, let’s define what “probate” even is here. Probate is the legal process of administering a will, which is done by carrying out the intentions of the will, settling any debts, and distributing any remaining assets to beneficiaries in the will. You might be wondering what happens if there is no will, well that when the Florida Laws regarding intestate succession would kick in and carry out the distribution of estate assets according to those laws.
The purpose for a probate is to “administer” the “estate” of a deceased person. This means to take count of all the assets (bank accounts, real estate, jewelry, cars, etc.), then determine if there were any liabilities at the time of death (medical bills, mortgages, credit card bills, etc.) , and finally to settle those debts and distribute the remaining assets based on the will or intestacy laws. It is a court supervised process that fairly evens up all the assets and liabilities of the deceased and terminates any further obligations.
Step 1: Filing The Petition
As mentioned above, when there is a valid will from the deceased the process follows the intentions of the will. When there is no will or the will is not determined valid by Florida laws of intestacy, the intestate administration is defined A-Z by Florida Statutes (“Florida law”).
The first step of probate litigation is to file the Letters of Administration, this is what starts the formal legal process. There are 2 general types of probate (1) formal administration (2) summary administration. For simplicity, to qualify for summary administration the deceased must have passed 2+ years from the filing date and if the time period is less than 2 years a formal administration must be completed (this is an overgeneralization and there are a few exceptions to this).
In either case, a personal representative is named in the will and files a Petition for Administration with the court. Once the personal representative is accepted, they are given “Letters of administration” which give them legal authority (“ownership“) over the estate. The personal representative is the one charged with the duty of administering the estate. Finally, the personal representative is responsible for hiring the probate attorney who will handle the administration of the estate.
Step 2: Notice To Creditors
(For the remainder of the article we will discuss ONLY a formal administration probate.)
In Florida, creditors have between 30 days but up to 90 days depending on whether formal notice was filed to the creditor to make a claim. This is a strict rule, however there are exceptions in favor of creditors when they were “reasonably ascertainable” and not formally notified.
There are some due diligence requirements imposed on the personal representative. According to Florida Statues, the personal representative must make a search for the decedents “reasonably ascertainable” creditors and serve a copy of notice of creditors. This “reasonably ascertainable” standard means the personal representative must check all mail, bank statements, and check registers to find these creditors. Failure by the personal representative to meet the reasonably ascertainable standard may allow a creditor to make a claim beyond the 30 or 90 day window.
Step 3: Inventory The Estate and value of a property
Within 60 days of the issuance of the Letters of Administration the personal representative will need to file a list of the estate’s “inventory”, which is all things that were owned by the decedent at the time of death (we will call these things “assets”). These assets may be either “liquid” or “illiquid” assets – liquid assets are cash or those that can be readily converted to cash ; whereas illiquid assets, such as real estate cannot be readily converted to cash and must be sold if they need to be converted to cash. This distinction is important when it comes to the settlement of the debts of the estate because these debts must be settled with cash and if there is not sufficient cash in the estate the illiquid assets will need to be sold to satisfy those debts. (Yes, even if the will said you were to inherit the house if the liabilities exceed the assets that house might need to be sold). You might even face a situation where you’d need to sell a house in poor condition, which is where we’d be able to help by purchasing the home as is since the estate will not be fixing the house.
This inventory list must provide reasonable detail for the items which may include but are not limited to jewelry, clothing, vehicles, real estate, stocks and bonds, or life insurance policy. The court also imposes a requirement to define the fair market value of the listed assets, which simply means the personal representative must use their best judgment to determine this value. Unless the liabilities exceed the assets of the estate or there is objection by beneficiaries of the estate the court will generally not question the fair market value issued by the personal representative.
Step 4: Closing the Claims Period (and paying any claims)
Generally, in Florida a creditor has 2 years to file a claim for any owed debts. However, this window can be shortened down to between 30 to 90 days when a probate is administered and the personal representative files the appropriate notices. To be specific, if a creditor is filed with a formal notice then they would have 30 days to file a claim. If instead a Notice to Creditors is filed, then there would be a 90 day period where a creditor may file a claim.
In Florida, creditors are classified by law within “Tiers.” The creditors of an estate are paid based on their priority and if there are not enough assets the tier may have to prorate their collection. It is important the attorney involved here determines the legitimacy of each and every creditor claim as oftentimes these claims can be barred and not need to be paid.
Here is the creditors list, in order of priority…
- Tier 1 – Any expenses incurred as a direct result of estate administration. This would be any attorney’s fees and any compensation for the personal representative.
- Tier 2 – Up to $6,000 for funeral and burial related expenses.
- Tier 3 – The decedent’s federal income tax payments, estate taxes, unpaid court fees, fines or expenses. Additionally, any debts associated with federal law such as Medicaid or government assistance programs.
- Tier 4 – Payment for any necessary and reasonable medical care that the decedent may have received in the 60 days prior to death. This may include nursing homes, hospitals, hospice, or other treatment facilities.
- Tier 5 – Up to $18,000 family allowance for any surviving spouse and children.
- Tier 6 – Payment of any outstanding or past due child support payments.
- Tier 7 – If the decedent owned a business and owed any outstanding payments to suppliers or other creditors. This is not paid with personal assets but only those assets of the business.
- Tier 8 – Any claims outside Tier 1 – 7.
Step 5: File the Final Accounting
At this point of the probate process it is likely that a lot has taken place: assets have been identified and possibly sold, debts have been legitimized and in queue to be settled, claims have been barred by additional creditors. All of this and more has occurred under the sole direction and discretion of the personal representative without regard to the beneficiaries, unless of course direction was provided from the will. So, this is when the beneficiaries finally get to see exactly what happened to the assets of the estate.
Generally, this final accounting must be filed by the probate attorney within 12 months from the date that the Letters of Administration were issued and is the responsibility of the personal representative to ensure this occurs. This step is so important because the final accounting is the opportunity for beneficiaries to object to “fair market value” assessment of assets made by the personal representative and it must be done within 30 days of publishing.
Step 6: Legal Title In Property Transfer in Accordance with will or local law
The distribution of estate assets of the estate will follow the plan of distribution, administered by the personal representative and approved by the court. (Estate assets do not include property owned in joint tenancy with right of survivorship or owned with a surviving spouse.) If there was a will and the estate assets have been used to pay off any debts and administration expenses then the assets will be distributed to the beneficiaries named within the will. In the case where there was no valid will the distribution of assets would follow the laws of intestate succession.
Whether by will or intestate succession, the distributions will be made by the payment of money or transfer of property and all distributions will be authorized by the personal representative. In the case of real estate the personal representative would sign the deed of ownership or other documents that may be needed to transfer ownership. In the case of the sale of property prior to transfer the probate court may issue a written order to allow the sale to be carried out.
Step 7: Closing the Probate Estate
This is probably the most important step for the personal representative and probate attorney because this is the legal end and cut off of any potential liability when formally filed. Each county in Florida is a little different but generally this is achieved by filing a Petition for discharge with the court. The closing process will include: the petition for discharge, a filing of the final accounting, and a statement regarding creditors. The petition for discharge usually will include a basic overview of the plan for distribution of estate assets and payment of liabilities. Finally, there will be a court hearing to approve all final documents, close the estate and discharge any further liability against the estate, personal representative and attorney.
Hopefully we didn’t lose you there with all that legalese but there is a formal process that must be followed to successfully and safely (without liability to the personal representative) administer the estate of a decedent. Without a doubt this article will equip anyone involved in the probate process, whether a beneficiary or personal representative, with enough information to navigate the otherwise complicated probate process. However, every case is different and you should retain expert counsel from an experienced attorney to ensure the estate is administered in the shortest amount of time and with the most preservation of assets. If you’re still a little unsure of what the next step should be – fill out the form below and someone from our team will be able to guide you in the right direction even if that means not working with us directly. We have plenty of experience dealing with various probate situations having purchased and sold over 500+ properties in the last 10 years.
Disclaimer: Nothing herein shall be construed as individual legal advice in any way and was written with the sole intention of general information. Do not rely on any information presented herein to address individual legal concerns.