What is Probate?
By Attorney Truman Scarborough
This will be the first in a series of articles on the probate process.
When someone dies, assets titled just in the decedent’s name without beneficiaries are frozen. No one can sign the deceased person’s name on checks, deeds, etc. A Power of Attorney does not help, since it is effective only while the creator is living. It is similar to an employer – employee relationship. If an employer goes out of business there are no employees.
The process where property is transferred from the decedent to the beneficiaries is called “Probate”. There are different kinds of probate depending on the size of the estate and whether there is a Will.
When there is a Will it is called “Testate Administration”. The Will by itself does not transfer property to the heirs. The Will has no authority until admitted to probate by the court. If there is no Will, it is called “Intestate Administration”, which will be discussed in a later article.
Probate can be further defined as Summary or Formal. “Summary Administration” is available when the assets total less than $75,000 in value and there are no creditors, or when the decedent died more than two years ago. Summary Administration will be examined further in a subsequent article. When Summary Administration is not available, “Formal Administration” will be required.
In Formal Administration, 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. The person named in the Will to administer the estate, the Personal Representative (executor), is issued “Letters of Administration” by the Probate Court. This allows the Personal Representative to access and manage the assets.
Some of the problems that can delay opening probate include: 1] The original Will cannot be located. 2] The Will was signed in another state and was not self-proving, requiring the Florida Probate Court to issue a commission for someone in that state to take the oath of the witnesses. 3] An autopsy is required before a death certificate can be issued. 4] A Floridian died in another state and the death certificate incorrectly showed him/her as a resident of that state 5] The person named as Personal Representative in the will is not qualified to serve.
Once appointed by the court the Personal Representative’s initial responsibilities include: 1] Sending an Inventory of assets to the court and beneficiaries, 2] Obtaining a Tax Identification Number (EIN) from the IRS, (once a person dies we can no longer use his/her social security number), 3] Opening an estate account using the EIN, 4] Publishing Notice to Creditors in the newspaper and mailing the Notice to known creditors.
Throughout the process of collecting assets, paying bills, and finally making distribution to the beneficiaries, the Probate Court must be shown that everything is proceeding as required by Florida Statutes and Florida Probate Rules. The word “Probate” essentially means “to prove.” Is the Will valid? Is the Personal Representative qualified? Who are the rightful heirs? Have debts, taxes, and estate expenses been paid? You may know that there are not any problems, but the court does not.
In the next article we will continue the discussion by further examining a Personal Representative’s responsibilities to the court, the beneficiaries, the decedent’s creditors, and the IRS.
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.