A probate is a legal proceeding initiated upon a person’s death and which essentially serves to wrap up the individual’s affairs. It can be viewed as a type of lawsuit whereby the court supervises the distribution of the decedent’s assets and the payment of creditors. Probate may or may not be required depending on the nature of the assets of the estate. In many cases, the decedent has left no “estate assets” to probate because the assets are all owned along with a spouse or other individual as joint tenants (such as a house owned with the spouse). If this is the case, probate will not be necessary because the property will automatically pass to the surviving joint tenant without the need to prove entitlement to ownership through a probate proceeding. Other examples of property that is not subject to probate are assets with beneficiary designations such as POD bank accounts, as well as life insurance, or retirement plans. Sometimes very large estates will not require probate while very small ones will, depending on how the assets have been titled as well as other factors too numerous to mention.
In a probate proceeding, the person nominated by the will, if one exists, is known as the personal representative. His or her job is to administer the estate for the benefit of creditors and the beneficiaries or heirs of the estate. The PR must use the available assets to pay creditors, estate taxes and costs of administration. If assets remain available, the PR can then distribute the remaining property to the heirs. In Florida, unless the PR is a Florida attorney, it he or she is required by law to have an attorney represent him in the probate proceeding. If there are assets under $75,000, a summary administration (an abbreviated probate proceeding)may be available. This procedure is also available if the person died more than two years ago. An attorney will usually charge a fee based upon the value of the assets contained within the estate as well as based on other additional factors, such as additional petitions that must be filed and whether estate tax returns are required. It is impossible to know whether probate will be required for you until the assets of the estate are examined on a case-by-case basis.
For small estates, where summary administration proceedings are available, the probate process can sometimes be concluded within only takes a few weeks. Unfortunately, when the estate is larger, or heirs cannot agree on matters, or there are a number of outstanding creditors or estate tax issues, probate has been known to last for years. A personal representative will distribute your property either according to the terms of your will, or if there is no will, according to the intestacy statute (intestate meaning without a will) provided by Florida law. Often times, a homestead will be involved and in order to be able to sell the property and convey clear title, a title insurance company will require that a petition to determine homestead will need to filed along with either formal administration or summary administration.
Some of the steps in the probate process include obtaining certified copies of the death certificate, locating the original will, identifying the assets owned and then filing a petition for administration in the County where the decedent resided at death. A diligent search for known creditors must be made and they must be notified of the probate proceedings so that any debts owed to them by the person that died can be made. The petitioner must also publish a notice in the local newspaper for two consecutive weeks so that unknown creditors are given notice that a probate proceeding has been filed and they are given an opportunity to file claims against the estate. There is also a process known as ancillary administration which is sometimes required if a non-resident of Florida died owning real estate in Florida. The heirs will not be able to sell the property even if a probate proceeding was concluded in the person’s state of residence unless the ancillary administration is initiated. If a person owns multiple pieces of real property, there are sometimes numerous probate proceedings occurring simultaneously in different states. This is of course timely and costly. There are probate avoidance techniques to avoid this result through the use of revocable trusts, lady bird deeds, and other means.
The personal representative is responsible for ensuring that the decedent’s final income tax returns are filed, as well as filing any estate income tax returns and estate taxes if the amount of assets exceed the applicable exemption amounts. If a personal representative pays creditors or distributes property to beneficiaries before paying the IRS any money it is owed, the PR may be held individually liable.
Probate is a complex administrative proceeding that has numerous time deadlines that must be strictly adhered to. There are many steps in the probate proceeding and a good relationship between the PR and attorney is vital as they will need to work together to properly administer the estate. Sometimes additional parties like accountants and investment advisors must be utilized to assist the attorney in wrapping up the estate. Mistakes in the probate process can prove very costly.