PROBATE AND ESTATE ADMINISTRATION

The loss of a loved one is an already stressful and emotionally painful time in a family’s life. Adding a probate administration to the already existing hardship of the loss of a loved one can seem extremely overwhelming, but the guidance of an experienced probate and estate administration attorney can help alleviate the stress of this process. The Florida probate and estate administration attorneys at Gorman & Jones, PLC offer a wide range of probate and estate administration services. Whatever your needs may be concerning a loved one’s passing, we have all the resources and experience necessary for an easy transition to the heirs.

What is Probate?

Probate is the court process by which a deceased individual’s (decedent’s) assets are distributed to their heirs, either under their Last Will and Testament or by the terms of Florida’s laws of intestacy if they do not have a will. The decedent’s assets are collected and comprise of that person’s probate estate. These assets include real estate (such as their personal residence) and other property (such as vehicles and funds held in checking accounts). From this estate, the creditors of the decedent, such as any credit card balances or outstanding medical invoices, are paid. Once the decedent’s creditors are paid, the heirs of the decedent receive the remaining assets of the probate estate.
There are two types of “probates” in Florida: Summary Administration and Formal Administration. Under each type of probate, the Last Will and Testament (if one was created by the decedent) will need to be admitted to the probate court by the Personal Representative. The Personal Representative, also sometimes referred to as the “Executor” or “Executrix” of the Estate, is the person who has been appointed under the decedent’s Last Will and Testament (if there is one) or appointed by the court (if there is no Last Will and Testament) to oversee the probate process.
Under Florida law, a Personal Representative must hire an attorney to probate an estate; Florida is not a “DYI” State and a person cannot represent themselves in a probate administration (which is known as being a “pro se” litigant). This means that a Personal Representative, regardless of their expertise or their willingness to handle the probate, must retain an attorney to assist them in probating the decedent’s estate. Most of the probate cases in Florida are filed online or by mail and have few physical hearings, which means that the Florida-licensed attorney who is retained by the Personal Representative does not have to be physically located in the county where the probate has been filed or is required.

The Florida Probate Procedure

Although probates involve many forms and documents to be created and filed with the court, it is often more involved than simply filling out forms and filing them with the Clerk of Court’s office. Florida’s probate laws require many rules and procedures that must be adhered to while probating an estate. If these rules are not followed correctly, the Clerk or the Court may halt the process of the probate and require additional actions to be followed or additional documentation to be produced. Some of these rules involve the handling of assets of the probate estate prior to the filing of a probate administration, since any asset of the probate estate cannot be sold or otherwise disposed of until that property has been administered through the probate court. Lastly, many individuals encounter issues involving locating assets of the decedent that may or may not comprise the decedent’s probate estate. Hiring an experienced probate and estate administration attorney like the attorneys at the law firm of Gorman & Jones, PLC will assist you in the location of assets and ensuring that all proper rules and procedures are followed throughout the probate process.

Does a Last Will and Testament Avoid Probate?

This is a question that many people ask regarding their estate plan. However, the answer is a resounding “NO.” A Last Will and Testament is simply a directive to the probate court to distribute your assets according to your wishes and to appoint the person you nominate as the Personal Representative to administer the probate process once the court recognizes their appointment. Therefore, a Last Will and Testament does not avoid probate; rather, it guarantees a probate will occur.

Will a Probate be Required?

The need for a Florida probate proceeding is determined solely on what assets were owned by the decedent and how they were titled upon their passing. Generally, probate occurs when any one or more assets are left in an individual’s name (and without a beneficiary) upon their passing. These assets comprise of a person’s Estate. Certain assets will not be considered as probate assets and will pass to others automatically without the need for a probate. These assets are often broken down into three categories:

  1. Beneficiary Designations: These can vary greatly, but the basic premise is that these assets list the person who will receive the asset upon the death of the owner. These can be certain assets with pay-upon-death designations (such as checking and savings accounts) or even real property owned under a Ladybird Deed (which passes to a remainder beneficiary under the deed). Additionally, investment vehicles (such as life insurance policies and annuities) list beneficiaries who will receive the proceeds of those accounts upon the policy owner’s passing.
  2. Trust Property: Since the property that is in a Trust is titled in the name of the Trust, it is not subject to probate and will simply pass to the beneficiaries of that Trust outside of the probate process.
  3. Property Owned with Rights of Survivorship: The most common assets that list ownership as “Joint Tenants with Rights of Survivorship” or “Tenancy by the Entirety” (like a Joint Tenancy with Rights of Survivorship, but between a husband and a wife) will automatically transfer to the surviving owners upon the passing of one of the co-owners.

Therefore, even a small bank account left in the decedent’s name with no beneficiary listed will qualify as an asset which will need to be probated. Additionally, the value of a decedent’s estate also determines what type of probate will need to occur, if any.

Summary Probate Administration vs. Formal Probate Administration

There are two types of probate administrations in Florida: Summary Administration and Formal Administration.

Summary Administration

Summary Administration is a streamlined probate process. A Personal Representative is not needed in a Summary Administration. However, only certain estates qualify for a Summary Administration, and sometimes it may not be the best option for certain estates. Generally, Summary Administration takes less time, effort, and it usually costs less than a Formal Probate Administration. In order to qualify for a Summary Administration, the decedent must either (1) be dead for two or more years, or (2) the value of the entire probate estate, less the value of exempt property, cannot exceed $75,000.00.

The initiation of a Summary Administration is very similar to a Formal Administration. The Summary Administration begins with the filing of the probate petition in the court. This petition may be filed by one of the beneficiaries or by the person appointed as the Personal Representative in the decedent’s Last Will and Testament. Additionally, the decedent’s surviving spouse (if any) will need to sign and verify the petition.

Since this is a streamlined process, the assets that comprise the decedent’s probate estate are administered to the beneficiaries and creditors once the court enters the order admitting the estate to probate. If the probate qualifies for Summary Administration due to the two-year rule, creditor claims are not an issue. This is because Florida has a two-year nonclaim provision, baring creditor claims against the decedent’s estate that are not brought within two years of the decedent’s death. However, if the probate qualifies for Summary Administration due to the $75,000.00 threshold rule, the creditor claims must be satisfied prior to an order of Summary Administration can be issued. This means that the Personal Representative must notify the creditors of the decedent and negotiate a repayment of debts of the estate before the remaining assets can be distributed to the decedent’s heirs.

Florida Homestead laws must also be considered when proceeding with a Summary Probate Administration. If the decedent owned their primary residence in the State of Florida at the time of their death, a separate court proceeding will need to occur to determine whether it was their Homestead under Florida law. This can be done simultaneously with the probate, and probate judges will often enter both the Order Determining Homestead and the Order of Summary Administration at the same time. Once the Order Determining Homestead is entered, the Homestead property can pass automatically to the decedent’s heirs and they will be able to take a clear title to that property.

Our experienced probate and estate administration attorneys at Gorman & Jones, PLC have the expertise and knowledge to determine whether a Summary Administration is the right choice for you. Our attorneys also have knowledgeable network of appraisers, tax advisors, investment advisors, and real estate brokers, who will work together to preserve and increase assets in probate estates and trusts.

For more information about probate and estate administration, contact our Florida probate and estate administration attorneys at Gorman & Jones, PLC, at (813) 856-5625 to schedule a free initial consultation.

Formal Administration

In contrast to a Summary Administration, a Formal Probate Administration is a type of probate administration where the collection and distribution of the probate assets are closely supervised by the probate court. There are three stages to a Formal Administration: (1) opening the probate estate, (2) administering the probate estate, and (3) closing the probate estate.

(1) Opening the Formal Probate Estate

After the Personal Representative hires the probate attorney, the attorney will file the Petition for Administration (along with any other required documents, such as the Last Will and Testament) with the Florida Probate Court. Although this is the first step in opening the Formal Administration, the probate estate is not formally considered to be opened until the court issues the Letters of Administration, which officially appoints the Personal Representative.

(2) Administering the Formal Probate Estate

As soon as the Personal Representative is officially appointed by the Letters of Administration, the probate estate can be administered. This is the most time-consuming phase in the Formal Administration, but the probate attorney retained to assist in the Formal Administration will be able to successfully guide the Personal Representative through every step of the process. Some of the steps involved in this process are as follows: notifying creditors, collecting the probate assets, inventorying and appraising the assets, collecting outstanding debts owed to the decedent, continue the decedent’s business, process and negotiate creditor claims, determine administrative fees, among other steps or actions.

(3) Closing the Formal Probate Estate

As soon as the time for creditor claims expires, all valid creditor claims have been paid, all administrative expenses have been paid, and the tax returns have been filed and paid, the Formal Probate Estate can be closed and the remaining assets can be distributed to the decedent’s heirs. Closing the Formal Probate Estate will require a petition to be filed with the court, which the probate attorney hired will draft and file. This petition will inform the court that all the steps have been done in administering the probate estate and that the estate is ready to be closed. The judge will either request for more information or documentation, or the judge will sign an Order of Discharge. Once an Order of Discharge has been signed, the Personal Representative will be released from their responsibilities.

Our experienced probate and estate administration attorneys at Gorman & Jones, PLC have the expertise and knowledge to assist you and your loved ones through the complex process of a Formal Probate Administration. Our attorneys also have knowledgeable network of appraisers, tax advisors, investment advisors, and real estate brokers, who will work together to preserve and increase assets in probate estates and trusts.

For more information about probate and estate administration, contact our Florida probate and estate administration attorneys at Gorman & Jones, PLC, at (813) 856-5625 to schedule a free initial consultation.

When to File Probate

Although there is no requirement or statute of limitations regarding when a probate must be administered, once a probate has been initiated, deadlines and formalities must be followed. However, delaying a probate can often result in problems. For example, real estate owned by the decedent at the time of their death cannot be sold, transferred, or managed if a probate has not been initiated. The most common issue that heirs encounter involves placing the real estate owned by the decedent up for sale before a probate has been initiated and then discovering that they are unable to complete the sale. Further, delaying a probate can also present issues in preservation of assets that may be at risk of loss or depreciation.

Length of Probate

The main question that Personal Representatives or heirs of a decedent ask regarding a probate administration is “how long will this take?” There is no easy answer to this question, since every probate administration is different. However, the type of probate that is filed can greatly impact the length of time that it will take to fully administer the probate estate. In our firm’s personal experience, a Formal Probate Administration can take anywhere from eight to twelve months if there are no complicating factors, such as contesting beneficiaries. Since Summary Probate Administration is a streamlined process, these probate administrations can take anywhere from three to eight months. However, both types of probate administrations can be complicated or delayed by out-of-court issues, such as liquidating assets, handling creditor claims, and appraising the assets of the estate

The length of probate can also greatly vary by the experience of the probate attorney hired to assist in your probate administration. Therefore, hiring an experienced probate and estate administration attorney such as the attorneys at the law firm of Gorman & Jones, PLC can be a determining factor in the length of the probate process. For more information about probate and estate administration, contact our Florida probate and estate administration attorneys at Gorman & Jones, PLC, at (813) 856-5625 to schedule a free initial consultation.

Florida Homestead Relating to Probate

One of the most common questions asked when a loved one passes is “what will happen to my loved one’s house?” As with all probate assets, any asset that is titled in one individual’s name alone with no beneficiary designation is subject to probate and will need to go to the probate process to properly transfer legal title to the deceased owner’s heirs. However, there are certain rules affecting a person’s Florida Homestead, which is a person’s primary residence. Additionally, under certain circumstances, personal property may also be protected under Florida’s Homestead protections from some creditors of a decedent’s probate estate.

Homestead Defined

Homestead property is defined by Article X, Section 4(a) of the Florida Constitution. (See Section 4 for the full Section). Real property (also known as real estate) owned by an individual will be considered their Homestead if the real property is:

“… located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements there, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family.”

In other words, if your house is on a piece of land that is less than one-half acre inside of a municipality, or if your house on a piece of land that is less than 160 acres outside of a municipality, that property can be considered your Homestead under Florida’s Constitution. Florida law has expanded the Homestead qualifications to also include condominiums, manufactured homes, and mobile homes.

For personal property, Article X, Section 4(a)(2) of the Florida Constitution allows the Homestead exemptions to extend to personal property of an individual for property up to $1,000.00 in value. (See also Florida Statutes for additional exempt property under the Florida Statutes).

Creditor Protection

Having your real property (and personal property) classified as Homestead property is important, but why? The main reason is for creditor protection. With only a handful of exceptions, Article X, Section 4(a) of the Florida Constitution protects Homestead property from being subject to a forced sale by the owner’s creditors. This means that a creditor who forecloses on the debts of an individual cannot reach the Homestead of the debtor to satisfy their delinquent debt balance.

However, there are three main exceptions to this rule, meaning that an individual’s Homestead property can be subject to a forced sale by its owner’s creditors. The first exception involves unpaid property taxes and assessments on the Homestead property. This means that if the owner of the property has not paid their taxes, their Homestead can be forced into a sale to satisfy the outstanding balance. The second exception involves mortgage foreclosures. Since most mortgage companies require the real property being mortgaged to be placed as collateral on the loan balance, they can foreclose on the loan and collect the property to satisfy the outstanding balance. The third exception involves unpaid balances owed on improvements to the property. The most common scenario under this third exception is referred to as a “mechanic’s lien,” which means that the Homestead owner hired a company to do improvements on their property and failed to pay their outstanding balance.

It is also important to note two other exceptions to this rule: creditors whose lien attached to the property before it became the owner’s Homestead property, and a co-owner’s judgment creditor when the delinquent co-owner fails to reside on the property.

Petition to Determine Homestead

Although a Homestead property has certain protections, it will not avoid probate if it is titled in one individual’s name alone upon their passing. Therefore, Homestead property will not avoid probate and must pass through the probate process to transfer legal title to the heirs of the deceased owner. However, there are certain probate advantages to Homestead property. These advantages begin when the Homestead property is determined by the probate court. This is done when a Petition to Determine Homestead is filed with the probate court. This petition simply gives the decedent’s creditors notice that the property was the Homestead of the decedent at the time of their death and gives all interested parties that the Homestead property exists. Once the property has been established by the probate court as the Homestead of the decedent, the real property will be distributed to the decedent’s heirs exempt from creditor claims.

Inheritance of Homestead Property

If a Homestead property is required to pass through probate upon its owner’s passing, the Homestead exemption passes to the heirs of the deceased owner. This will protect the Homestead property from most creditors after the property is transferred to the deceased owner’s heirs through probate. In addition, the Homestead property will also be protected by most of the creditors of the deceased owner’s heirs after the property is transferred to the decedent’s heirs, so long as the heir continues using the real property as their Homestead.

Additionally, Florida Homestead-law expert, Rohan Kelley, has formulated a method of understanding how Homestead property is transferred upon the owner’s passing. This method is known as “Kelley’s Homestead Paradigm” and breaks down the process into six distinct levels or steps, which are listed as follows:

  1. Level One: “Was the property the decedent’s Homestead?”
    a. If no, the property is subject to probate administration and subject to creditor claims.
    b. If yes, go to Level Two.
  2. Level Two: “Was the decedent survived by a minor child?”
    a. If the decedent was survived by a spouse, the surviving spouse receives a life estate in the Homestead property and the property will pass to the decedent’s children upon the surviving spouse’s passing (commonly referred to as a “remainder interest”).
    b. If the decedent was not survived by a minor child, to go Level Three.
  3. Level Three: “Was the decedent survived by a spouse?”
    a. If the decedent’s entire Homestead property was devised to the spouse, there was no valid waiver of spousal rights, and the decedent was not survived by descendants, the spouse will take the entire interest.
    b. If the decedent was survived by descendants and a spouse, the surviving spouse will take a life estate with the remainder interest in the decedent’s descendants.
    c. If the decedent was not survived by a spouse, go to Level Four.
  4. Level Four: “Was the decedent survived by heirs?”
    a. If no, the property is subject to probate administration and subject to creditor claims.
    b. If yes, go to Level Five.
  5. Level Five: “Was the decedent’s Homestead devised?”
    a. If no, the decedent’s intestate heirs will take title to the property as tenants in common, meaning each will own an equal portion of the property with no survivorship rights.
    b. If yes, go to Level Six.
  6. Level Six: “Was the decedent’s Homestead devised to heirs listed in Fla. Stat. 732.103?”
    a. If yes, the devisees will take title to the property as devised in the decedent’s Last Will and Testament.
    b. If no, the property is subject to probate administration and subject to creditor claims.

It is important to note that this paradigm will only apply if the Homestead property was not owned by a trust (as it is not a probate asset), or owned as Tenants by the Entirety (as husband and wife) or as Joint Tenants with Rights of Survivorship (multiple people owning the property with survivorship rights), as the property will pass to the surviving owner by operation of law upon the other owner’s passing.

This paradigm is an important method of determining how Homestead property will be devised, whether it will be subject to probate or the claims of the decedent owner’s creditors, and who will be entitled to take title of the property. As is clearly evident, this process can be confusing and difficult to understand, which is why hiring an experienced attorney focusing in probate administration is vital in ensuring that Homestead property passes properly to the decedent owner’s heirs. To schedule a free initial consultation with one of the experienced probate administration attorneys at Gorman & Jones, PLC, call (813) 856-5625 today.

 

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