What is Probate?

estate planning

By Attorney Truman Scarborough

This is the second in a series of articles on probate. In the last article, we looked at the initial court procedures for formal probate which is required when the decedent died within the last two years and the value of the assets is over $75,000. This article continues the discussion by looking at the Personal Representative’s (executor’s) responsibilities.

When someone dies, assets titled just in the decedent’s name without beneficiaries are frozen. The legal procedure used to transfer property from the decedent to the beneficiaries is called “Probate”. The court creates a legal entity (like a corporation) called the “Probate Estate” to take the decedent’s place and hold the decedent’s assets. A Personal Representative is appointed by the court to administer the probate estate.

In the process of probating an estate, the Probate Court must be shown that everything is proceeding as required by Florida Statutes. The word “Probate” essentially means “to prove.” Is the Will valid?  Have creditors been notified and paid? Have beneficiaries been provided information and received their allotted share? You may know that there are no problems, but the court does not.

Through the probate process, the court assures that the Personal Representative fulfills the various responsibilities to 1] beneficiaries, 2] decedent’s creditors, 3] IRS, and 4] for expenses in administering the estate.  In this article, we will look at the Personal Representative’s responsibilities to beneficiaries and creditors, and in the next article the responsibilities to the IRS and for administrative expenses.

BENEFICIARIES: When someone must rely on the honesty and diligence of another person to protect his/her property, it creates a fiduciary relationship. Under the law, there are different levels of proof to show misconduct. At one end of the spectrum is the proof needed to show “beyond a reasonable doubt” that someone is guilty of a crime. At the other end is the responsibility of a fiduciary to clearly show he/she is protecting the beneficiaries’ interests.

The Probate Code requires that beneficiaries be provided with a copy of the Will, Petition for Administration, Notice of Administration, Letters of Administration, the Inventory (showing date of death values), the Accounting (showing what has occurred with estate assets from the Inventory to the time of distribution), and the Petition for Discharge (which shows the proposed distribution).  If not satisfied, beneficiaries have the right to file objections with the court.

CREDITORS: All reasonably ascertainable creditors must be mailed a “Notice to Creditors” advising that they have 30 days from the receipt of the notice to file a claim with the court. Other creditors have three months from the date Notice is published in the newspaper to file a claim with the court. If a questionable claim is filed, the Personal Representative has 30 days in which to file an objection with the court. Once an objection is filed, to pursue the claim the creditor must bring an independent legal action within 30 days.

Not all assets in probate are subject to creditors’ claims, including $20,000 in furniture and appliances, plus two motor vehicles. When the home is going to certain relatives, the court can determine that it is “protected homestead“ free of most creditor claims. However, the home is still subject to mortgages on the property, IRS liens, liens for work performed on the property, and real estate taxes.

 

For further information on estate planning, you may be interested in Attorney Truman Scarborough’s Booklet on Estate Planning in Florida. It is available without charge or obligation by calling (321) 267 – 4770. His office is located at 239 Harrison Street, Titusville, Florida.

 

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