On Friday we began a two-part Florida probate guide article. So far we have covered the probate process in Florida from authenticating the last will and testament through to gathering the date of death values. Today, in the second part of our Florida probate guide, we will pick up right where we left off. If you happened to miss the first part of this article on Friday, you can read it here: Probate Guide: A Florida Probate Attorney’s Overview.
Understanding The Probate Process
Florida Probate Guide: Identifying and Notifying Creditors
Once the executor of the estate has gathered the date of death values, the next step that they must take is to identify and notify any creditors of the death of the individual (debtor). In most states, in addition to notifying known creditors directly, the executor of the estate is also required to place a “notice of death” in the local newspaper so that any unknown creditors can be alerted to the death of the debtor. This notice must also instruct any creditors to file claims against the estate with the probate court.
Creditors have a set period of time in which to make a claim against the estate after receiving notice of the death. This period or “statute of limitations” varies by state. In Florida, creditors who receive direct notice of the probate process have 30 days in which to respond with any claims against the estate. When a notice to creditors is published in the newspaper, the creditors have 90 days from the first date of publication to respond with their claim.
In Florida, if a probate estate is not filed, the overall statute of limitations for a creditor to make a claim against that estate is two years.
Paying Off Debts
The next step in the probate process is for the debts of the decedent to be paid off. These debts include any outstanding bills, credit cards, payments to hospital or hospice for care prior to death, and any other outstanding amounts owed. This money is taken directly from the estate of the decedent.
Paying off Taxes
After the debts of the decedent have been paid, the executor of the estate must then take care of the decedent’s income tax preparation and filing. Any taxes owed will, again, be paid from the estate funds.
In addition to paying income taxes for the year that the decedent passed away, the executor of the estate must also determine whether there are any estate taxes due on the estate of the deceased. (This is where a probate attorney can really help!) If any estate taxes are due, those too are paid out of the estate funds. This is NOT the case in Florida, however, where there is no estate tax. (Floridians also are exempt from inheritance taxes levied on any money left to them in the will of the deceased.)
Florida Probate Guide: Submitting a Final Accounting
Once any taxes due have been filed and paid on the decedent’s estate, the executor of the estate must then submit a final accounting to the court and to the beneficiaries of the estate. This is a compilation of ALL financial transactions that the executor of the estate completed during the probate process on behalf of the estate.
In some states, the final accounting of the financial transactions on behalf of the estate can be waived if all beneficiaries of that estate agree to waive it. If not waived, the beneficiaries of the estate are given 30 days to review the accounting and make any objections. Objections are made by filing a motion to challenge the final accounting with the court and providing a copy of the objection to the executor of the estate and the other beneficiaries of the estate. If this is not done within the given 30 day period, it is generally accepted that there are no objections.
If objections are made to the final accounting in a timely manner, then an evidentiary hearing is held and a judge will make a decision based on this hearing. IF the executor of the estate is put through objections and an evidentiary hearing, their attorney fees will be paid out of the estate funds. If the executor of the estate is found to have purposefully mismanaged the estate, they can be sued in civil court and will face repercussions. Additionally, if the executor paid a bond, then the bond will then be utilized to compensate for funds lost to mismanagement by the executor.
Florida Probate Guide: Estate Distribution
Once the final accounting of the estate has been accepted, the executor of the estate must then petition the probate court to get permission to distribute what remains of the estate to the beneficiaries. Once granted permission to distribute the estate, the executor of the estate will then distribute the estate to the beneficiaries according to the will of the decedent. Any assets that are not specifically named and bequeathed in the will are divided up among the beneficiaries according to instruction in the will. If no instruction is given, the division of remaining assets is equal among beneficiaries.
Distributing the estate may require a number of additional tasks of the executor of the estate. For example, they may have to:
- Evaluate and arrange for the sale of estate property so that it can be divided equally among beneficiaries.
- Set up trusts for those beneficiaries who are unable to handle their own inheritance.
- Deeds will need to be signed over for real property like vehicles and homes.
A Note About Estate Executor Compensation
As you can tell from this 2-part article, there are many responsibilities that fall into the hands of an estate executor. These responsibilities are compensated for by the estate of the decedent according to state statutes. In Florida, fair compensation for an executor of an estate is defined is based on a percentage of the gross estate value prior to any payment of creditors or debts PLUS any income that the estate has generated during the probate process. These percentages are outlined as follows:
- 3.0% on the first $1M
- 2.5% on the next $4M
- 2.0% on the next $5M
- 1.5% on anything more.
Need a Probate Attorney to Help You Navigate the Complicated Probate Waters?
If you need a probate attorney to help you to find your way through the probate process in St. Petersburg, Florida, Weidner Law can help. Just pick up the phone and give us a call today at 727-954-8752.