The following was reprinted in part with permission of The Florida Bar. To order a free pamphlet on this subject send a self addressed, stamped legal size envelope to Consumer Pamphlets, The Florida Bar, 650 Apalachee Parkway, Tallahassee, Florida 32399-2300.
1. WHAT IS PROBATE?
Probate is a court-supervised process for identifying and gathering the decedent's assets, paying taxes, claims and expenses, and distributing assets to beneficiaries. The Florida Probate Code is found in Chapters 731 through 735 of the Florida Statutes. Florida law establishes three types of probate administration:
Formal Administration, with which most of this article deals;
Summary Administration; and
Florida law also establishes a "non-administration" proceeding called "Disposition of Personal Property Without Administration"
2. WHAT ARE PROBATE ASSETS?
Generally, probate assets are those assets in the decedent's sole name at death or otherwise owned solely by the decedent, and which contain no provision for automatic succession of ownership at death. For example:
a bank account in the sole name of a decedent is a probate asset, but a bank account held in trust-for ("ITF") another, or held jointly with rights of survivorship ("JTWROS") with another, is not a probate asset;
a life insurance policy payable to a specific beneficiary is not a probate asset, but a policy payable to the decedent's estate is a probate asset;
real estate titled in the sole name of the decedent is a probate asset (unless it is homestead), but real estate held as joint tenants with rights of survivorship or as tenants-by-the-entirety is not a probate asset;
property owned by husband and wife as tenants-by-the-entirety is not a probate asset on the death of the first spouse to die, but goes automatically to the surviving spouse.
This list is not exclusive, but is intended to be illustrative.
3. WHY IS PROBATE NECESSARY?
Probate is necessary to wind up the affairs the decedent leaves behind. Florida has had probate laws in force since becoming a state in 1845. Florida law provides for all aspects of the probate process, but allows the decedent to make certain decisions by leaving a valid will.
4. WHAT IS A WILL?
A will is a writing, signed by the decedent and witnesses, meeting formal requirements set out by Florida law. A will usually designates a personal representative and names beneficiaries to receive probate assets. A will can also do other things, including establishing a trust and designating a trustee. To the extent a will properly devises probate assets and designates a personal representative, the will controls over the automatic provisions set out under Florida law. In the absence of a valid will, or if the will fails in either respect, Florida law designates the beneficiaries and designates the way to select the personal representative.
5. WHAT HAPPENS TO PROBATE ASSETS IF THERE IS NO WILL?
Surviving Spouse and No Lineal Descendants. If there is a surviving spouse and no lineal descendants, the surviving spouse takes all.
Surviving spouse and lineal descendants.
1. If there is a surviving spouse and one or more lineal descendants (with the lineal descendants all being the lineal descendants of the surviving spouse as well as the decedent). the surviving spouse receives the first $20,000.00 of the probate estate plus one-half of the rest of the probate estate, and the lineal descendants share the remaining half.
2. If there is a surviving spouse and one or more lineal descendants, one or more of which lineal descendants are not also lineal descendants of the surviving spouse), the surviving spouse receives one-half of the probate assets, and the lineal descendants share the remaining half.
No Surviving Spouse, but Lineal Descendants. If there is no surviving spouse. but there are lineal descendants, the lineal descendants share the estate, which is initially broken into shares at the children's level, with a deceased child's share going to the descendants of that deceased child.
No Surviving Spouse, No Lineal Descendants. If the decedent left no surviving spouse or lineal descendants, the probate property goes to the decedent's surviving parents, and if none, then to the decedent's brothers and sisters and descendants of any deceased brothers or sisters. The law provides for further disposition if the decedent is survived by none
Qualification of Above. The foregoing provisions are subject to certain exceptions for homestead property, exempt personal property, and a statutory allowance to the surviving spouse and any lineal descendants or ascendants the decedent was obligated to support or was in fact supporting. Regarding homestead, the surviving spouse receives a life estate in the homestead, with the lineal descendants receiving the homestead property upon the death of the surviving spouse. If there are no lineal descendants, the surviving spouse receives full ownership of the homestead outright.
6. WHO IS INVOLVED IN THE PROBATE PROCESS?
While there may be others, the following is a list of persons or entities often involved in the probate process:
Clerk of the Circuit Court (see question 7).
Circuit Court (acting through a Circuit Court Judge, see question 8).
Personal Representative (see questions 9 through 11).
Attorney for the Personal representative (see question 12). Claimants (see question 13).
Internal Revenue Service ("IRS") (see question 14).
Florida Department of Revenue (see question 15).
Surviving Spouse and Children (see question 16).
Other beneficiaries (see question 17).
7. WHERE ARE PROBATE PAPERS FILED?
Probate papers are filed with the Clerk of the Circuit Court, usually for the county where the decedent lived. A filing fee must be paid to the Clerk to commence the probate administration. The Clerk assigns a file number and maintains a docket sheet which lists all papers filed with the Clerk for that probate administration.
8. WHO SUPERVISES THE PROBATE ADMINISTRATION?
A Circuit Court Judge presides over probate proceedings. The Judge appoints the personal representative (this includes the issuance of "letters of administration, also referred to simply as "letters," the document showing to the world the authority of the personal representative to act), holds hearings when necessary, and resolves all questions raised during the administration of the estate by entering written directions called "orders."
9. WHAT IS A PERSONAL REPRESENTATIVE, AND WHAT DOES THE PERSONAL REPRESENTATIVE DO?
The personal representative is the person, bank or trust company appointed by the Court to be in charge of the administration of the estate. The generic term "personal representative" has replaced such terms as "executor, executrix, administrator and administratrix." The personal representative is directed by the Court to administer the estate pursuant to Florida law. The personal representative is obligated to:
Identify, gather and safeguard probate assets.
Publish a "notice of administration" 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.
Conduct a diligent search to locate "known or reasonably ascertainable" creditors, and notify them to file their claims.
Object to improper claims and defend suits brought on such claims.
Pay valid claims.
File tax returns.
Employ necessary professionals to assist.
Pay administrative expenses.
Distribute statutory amounts or assets to the surviving spouse or family.
Distribute assets to beneficiaries.
Close probate administration.
10. WHO CAN BE A PERSONAL REPRESENTATIVE?
The personal representative could be an individual, bank, or trust company, subject to certain restrictions
An individual who is either a resident of Florida or is a spouse, sibling, parent, child, or certain other close relatives, can serve as personal representative.
A trust company incorporated under the laws of Florida, or a bank or savings and loan authorized and qualified to exercise fiduciary powers in Florida, can serve as personal representative.
11. WHO HAS PREFERENCE TO BE PERSONAL REPRESENTATIVE?
If the decedent left a valid will, the designated personal representative nominated 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 in interest of the heirs.
12. WHY DOES THE PERSONAL REPRESENTATIVE NEED AN ATTORNEY?
In almost all instances the personal representative must be represented by a Florida attorney. If the personal representative is also the only estate beneficiary, an attorney is not generally required. A Florida attorney may serve both as personal representative and as attorney for the personal representative.
The attorney for the personal representative advises the personal representative on rights and duties under the law, and represents the personal representative in estate proceedings. The attorney for the personal representative is not the attorney for the beneficiaries.
A will provision mandating that a particular attorney or firm be employed as attorney for the personal representative is not binding on the personal representative.
13. HOW ARE ESTATE CREDITORS HANDLED?
A creditor or other claimant may file a paper called a "statement of claim" against the estate with the Clerk of the Circuit Court. This claim is generally required to be filed within the first 3 months. The personal representative or any other interested person may file an objection to the statement of claim, after which the claimant must file a separate independent lawsuit to pursue the claim. The U.S. Supreme Court has mandated that the personal representative 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 valid claimant is not viewed as an adversary of the personal representative or the beneficiaries, but in fairness is viewed as one entitled to whatever is properly due.
14. HOW IS THE IRS INVOLVED?
For federal tax purposes, death triggers two 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."
The personal representative may be required to file the following returns depending on income of the decedent, income of the estate and size of the estate:
Final Form 1040 income tax return.
One or more Form 1041 Income tax returns for the estate.
Final Form 709 gift tax return.
Form 706 federal estate tax return.
The personal representative may be required to file other returns. Additionally, the personal representative has the responsibility to deal with issues arising from tax years prior to the decedent's death (including tax returns that were filed or that should have been filed).
The personal representative has the responsibility to pay amounts due the IRS from the decedent and the estate.
15. HOW IS THE FLORIDA DEPARTMENT OF REVENUE INVOLVED?
The personal representative sends a copy of the probate inventory and a copy of a "preliminary notice and report" form to the Florida Department of Revenue which may review information from an estate regarding (1 ) Florida intangible tax and (2) Florida's share of the federal estate tax. Regarding Florida's intangible tax, the Department reviews the inventory and preliminary notice and report 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 Department will be the recipient of all or a portion of the "state credit" amount if the estate owes any federal estate tax. Federal estate tax laws allow a certain amount ("state credit") to be paid to the state instead of the federal government, without increasing the total amount of estate tax. Florida has such a "sponge tax" provision and Florida adds no additional estate tax. 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 some instances in order to close the probate administration file.
16. WHAT RIGHTS DO THE SURVIVING FAMILY HAVE IN THE PROBATE ESTATE?
Florida public policy attempts to protect a surviving spouse and certain surviving children from total disinheritance. Absent a nuptial agreement waiving the right, a surviving spouse has homestead rights, elective share rights, family allowance rights, and exempt property rights. All of these rights, except the elective share rights, may be rights shared with surviving children of the decedent, depending on the circumstances.
17. WHAT RIGHTS DO OTHER POTENTIAL BENEFICIARIES (OTHER THAN THE SURVIVING SPOUSE AND CHILDREN) HAVE IN THE PROBATE ESTATE?
Under the Florida Probate Code, the decedent can entirely disinherit other potential beneficiaries.
18. HOW LONG DOES PROBATE TAKE?
For estates not required to file a federal estate tax return, the final accounting and papers to close the probate administration are due within 12 months of commencement of probate. This period can be extended, after notice to interested persons. The federal estate tax return is due nine months after death. 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. Since IRS may take four to nine months to act on the return after filing this, date may need to be extended by the Court after hearing. Estates which are not required to file a federal estate tax return and which do not involve litigation can be closed in five or six months. In any event, partial distributions to beneficiaries may be made during the period of administration; not all distributions of probate assets must be delayed until the closing of the estate.
19. HOW ARE FEES DETERMINED IN PROBATE?
The personal representative, the attorney and other professionals whose services may be required in administering the estate (such as appraisers and accountants) are entitled by law to reasonable compensation. The fee for the personal representative is usually determined in one of five ways: (1) as set forth in the will; (2) as set forth in a contract between the personal representative and the decedent; (3) as agreed between the personal representative and the persons who bear the impact of the fee; (4) as calculated under Florida law without court hearing, if the amount is not objected to; or (5) as determined by the probate judge, applying Florida law. Likewise, the fee for the attorney for the personal representative is usually determined in one of these five ways.
20. WHAT ALTERNATIVES ARE AVAILABLE TO FORMAL ADMINISTRATION?
Florida law provides for three 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-grand children. etc., or lineal descendants, i.e., parents, grandparents, great-grandparents, etc.), and the value of the gross estate for federal estate tax purposes is less than $60,000.00. 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 $25,000 or less and there are no creditors of the decedentıs estate or the decedent has been dead for more than two years.
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