Questions & Answers
A: Probate is a court-supervised process for identifying and dispersing the assets of someone who is deceased. This process involves paying any taxes due on the estate, settling any outstanding claims and expenses and then distributing the remaining assets to the beneficiaries. The Florida Probate Code is found in Chapters 731 – 735 of the Florida Statutes. Florida law also establishes a non-administration proceeding called “Disposition of Personal Property Without Administration.”
A: Generally speaking, probate assets are all assets in the decedent’s sole name at the time of his or her death or otherwise owned solely by the decedent and which contain no provision for automatic succession of ownership. For example, a bank account in the sole name of a decedent is a probate asset. But if that bank account is held jointly with another or held in trust for another, then it would not be a probate asset.
A: If there is a surviving spouse and no lineal descendants (a lineal descendant is a legal term meaning a blood relative in the direct line of descent – the children, grandchildren, great-grandchildren, etc.), the surviving spouse takes all.
If there is a surviving spouse and lineal descendants, the surviving spouse is entitled to the first $60,000 of the probate estate, plus one-half of the remaining assets. The remainder is split equally among the lineal descendants.
If there is a surviving spouse and one or more of the lineal descendants are not blood relations of the surviving spouse, the surviving spouse receives one-half of the probate assets with the other half shared by the lineal descendants.
If there is no surviving spouse, but lineal descendants, with the estate divided into shares at the children’s level, with any deceased child’s share going to that child’s children.
If there is no surviving spouse or lineal descendants, then the probate assets would go to the decedent’s parents, if still alive. If none, then to the decedent’s brothers and sisters and any descendants of any deceased brothers or sisters.
The provisions we’ve stated here are subject to certain exceptions, such as for homestead property, exempt personal property and an allowance as dictated by law to any surviving spouse, lineal descendent or lineal ascendant supported by the decedent.
A: For estates not required to file a federal estate tax return (see below), the final accounting and papers to close the probate administration are due within 12 months of issuance of letters of administration. This period can be extended, after notice to interested persons.
The federal estate tax return is initially due 9 months after death, but may be extended for another 6 months. If a federal estate tax return is required, the final accounting and papers to close the probate administration are due within 12 months from the date the tax return is due. This date is usually extended by the court because the IRS’ review and acceptance of the estate tax return are often not completed within that time period.
Estates that are not required to file a federal estate tax return and that do not involve litigation may often close in 5 or 6 months.
A: The personal representative, attorneys and other professionals whose services may be required in administering the estate (such as appraisers, Realtors and accountants) are entitled by law to reasonable compensation.
The fee for the personal representative is usually determined in one of 5 ways:
1.) As set forth in the will
2.) As established in a contract between the personal representative and the decedent
3.) As agreed among the personal representative and the persons who bear the impact of the fee (typically, the beneficiaries)
4.) As the amount presumed to be reasonable as calculated under Florida law if the amount is without objection
5.) Or as determined by the judge, applying Florida law.
Typically, the fee for the attorney for the personal representative is determined as agreed among the attorney, the personal representative and the persons who bear the impact of the fee; as the amount presumed to be reasonably calculated under Florida law, if the amount is without objection; or as determined by the judge, applying Florida law.
A: No. Florida law requires that, in the absence of a valid pre/post-marital agreement, the surviving spouse is entitled to a share (approximately 30% of the fair market value of the decedent’s assets); as well as household furniture, certain automobiles and Florida college saving programs; an $18,000 family allowance; and/or entitlement to a share of the decedent’s estate if the deceased has not made a will. The right of the surviving spouse is not straightforward. Multiple overlapping laws can come into play. A surviving spouse who be well-advised to retain an attorney to represent him or her in these proceedings.
A: Florida public policy protects the surviving spouse and certain surviving children from total disinheritance. Certain surviving children of the decedent may also have homestead rights, pretermitted child rights, family allowance rights, and exempt property rights. The existence and enforcement of these rights is often best handled by an attorney.
A: Under Florida law, as with most other states, a decedent may entirely disinherit other potential beneficiaries.
A: Florida law provides for 4 alternate, abbreviated procedures other than Formal Administration.
Family Administration is generally available if beneficiaries consist solely of a surviving spouse, lineal descendants (i.e., children, grandchildren, great grandchildren, etc.) or lineal ascendants (i.e., parents, grandparents, great grandparents, etc.), and the value of the gross estate for federal estate tax purposes is less than $60,000.
Summary Administration is generally available if the value of the estate subject to probate in Florida (less property which is exempt from the claims of creditors) is not more than $75,000 or the decedent has been dead for more than two years.
Under Family Administration and Summary Administration, the persons who receive the estate assets remain liable for claims against the decedent for two years after the date of death. This period may be reduced in Summary Administration by publication of notice in a local newspaper.
In a Family Administration, the two-year period may be reduced by using Formal Administration until all claims of creditors have been barred.
The 3rd alternative to Formal Administration is Disposition Without Administration. This is available if estate assets consist solely of exempt property (as defined by law) and non-exempt personal property, the value of which does not exceed the combined total of up to $6,000 in funeral expenses, plus the amount of all reasonable and necessary medical and hospital expenses incurred in the last 60 days of the last illness.
The 4th alternative to Formal Administration is only available for descendants who were not Florida residents as of death. This is to admit the will of a nonresident decedent to record, if certain requirements are met and the will deals with Florida real estate or any right to Florida real estate. When admitted to record in any Florida county where the real estate is located, the “foreign will” serves to pass title to the real estate as if the will had been admitted to probate. This procedure is available only if either 2 years have passed from the decedent’s death or the property’s personal representative has been discharged and there has been no estate administration in Florida.
A: Typically, the probate process involves the Clerk of the Circuit Court, a Circuit Court Judge, Personal Representative, Attorneys for the Claimants (entities such as mortgage companies, healthcare facilities, etc. that may have outstanding claims as they relate to the estate), the Internal Revenue Service (IRS), the Florida Department of Revenue, the Surviving Spouse and Children Other Beneficiaries (and their attorneys) or Trustee of a Revocable Trust.
A: The personal representative is the person or financial institution appointed by the court to be in charge of the administration of the estate. The generic term “personal representative” has replaced older terms like “executor, executrix, administrator and administratrix.”
The personal representative is obligated to identify, gather, value and safeguard all probate assets. The representative is also required to publish a “notice to creditors” in a local newspaper, giving notice of the administration of the estate and of requirements to file claims and other papers relating to the estate. The personal representative serves a “notice of administration” on specific persons, giving information about the estate administration and giving notice of requirements to file any objections relating to the estate.
The representative then conducts a diligent search to locate “known or reasonably ascertainable” creditors, and notify them of the time by which their claims must be filed; object to improper claims and defend suits brought on such claims; pay valid claims; file tax returns and pay applicable taxes; employ any additional professionals to assist as needed: pay administrative expenses; distribute amounts or assets to the surviving spouse or family; distribute assets to other beneficiaries; and finally, close probate administration.
A: The personal representative could be any individual, bank or trust company, subject to certain restrictions. A resident of Florida or someone who is a spouse, sibling, parent, child, or certain other close relative of the deceased can serve as personal representative. A trust company incorporated under the laws of Florida or a bank authorized and qualified to exercise fiduciary powers in Florida can also serve as personal representative.
A: If the decedent left a valid will, the designated personal representative named in the will has preference to serve. If the decedent did not leave a valid will, the surviving spouse has preference, with second preference to the person selected by a majority of the heirs.
A: In almost all instances, the personal representative must be represented by a Florida probate lawyer. Even in the simplest estate administration many legal issues arise. The attorney’s responsibility is to advise the personal representative on their rights and duties and represent the personal representative in any estate legal proceedings. Understand that the attorney for the personal representative is not the attorney for the beneficiaries. By the way, any provision in a will mandating that a particular attorney or firm be employed as attorney for the personal representative is not legally binding on the personal representative.
A: Upon publication of a notice to creditors, a creditor or other claimant may file a document called a “statement of claim” against the estate with the Clerk of the Circuit Court where the estate is being administered. This claim is generally required to be filed within the first three months after the publication of the notice in a countywide newspaper. The personal representative is required to use diligent efforts to give actual notice of the probate proceeding to “known or reasonably ascertainable” creditors, to afford them an opportunity to file claims.
A: As far as federal income taxes go, a death triggers 2 things. It ends the decedent’s last tax year for purposes of filing a federal income tax return, and it establishes a new tax entity – the “estate.”
Depending on the decedent’s income, the estate’s personal representative may have to file: a Final Form 1040 income tax return for the decedent’s final tax year, one or more Form 1041s for the estate, a Form 709 gift tax return(s), reporting certain gifts made by the decedent prior to death, and a Form 706 estate tax return, reporting the gross estate and deductions (depending upon the value of the gross estate).
Additionally, the personal representative has the responsibility to deal with any issues that may arise from tax years prior to the decedent’s death (including tax returns that were incorrectly filed by the decedent or that should have been filed). The personal representative has the responsibility to pay any amounts due to the IRS from the decedent and the estate.
If a federal estate tax return is required to be filed, an estate tax closing letter is necessary to clear any title(s) to Florida real property and, in some instances, in order to close the probate administration with the court.
A: The personal representative is required to send a copy of the probate inventory to the Florida Department of Revenue. If a federal estate tax return is not required to be filed with the IRS, then the personal representative is required to record in the public records (and file in a formal estate administration) an Affidavit of No Florida Estate Tax Due. If a federal estate tax return is required to be filed with the IRS, then the personal representative is required to file a Florida estate tax return, Form F-706, with the Florida Department of Revenue.”
Regarding Florida’s intangible tax, the Florida Department of Revenue may review the inventory to determine whether the estate, or the decedent while alive, failed to file a required intangible tax return or to pay intangible tax.
Regarding federal estate taxes, the Florida Department of Revenue may receive all or a portion of the “state death tax credit” amount allowed by the IRS. For estates required to file a Florida estate tax return, a nontaxable certificate or a tax receipt from the Florida Department of Revenue is required in order to clear title to Florida real property and in order to close a formal probate administration.
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