When is probate the better way to settle an Estate?

By Attorney Truman Scarborough

Probate is required when property is titled just in the decedent’s name without any beneficiaries. A will by itself does not transfer property to the heirs. Probate is needed to access and finally distribute the assets to the heirs. Normally, we try to avoid probate because of the cost, time, and aggravation involved in the court process. Formal Probate takes six months or longer. Expenses include attorney fees at around 3% of the gross assets.

With a trust the probate court process can be avoided shortening the time and reducing expenses to settle an estate.  The successor trustee of the trust has immediate control of assets and can settle the estate without court supervision. However, there can be risks with a trust if your choice for successor trustee does not have the time or ability to settle the estate or if his/her appointment would create conflicts.  A financial institution could be named to serve as successor trustee. But if the estate is small, a financial institution may not be willing to serve or their fee could consume a large portion of the estate. One option is to have the Probate Court supervise the settling of the estate.  

With Probate, the Court must be shown that everything is proceeding in accordance with the Florida Probate Code. To understand why there are advantages in having the court involved in settling an estate, we need to look at the issue from both the beneficiaries’ and the administrator’s perspectives.

Why probate may be helpful from the beneficiaries’ perspective: With a trust, except for annual accountings, the trustee is under few time restraints. On the other hand, the Probate Code sets forth a number of timelines for providing the beneficiaries information throughout the process. The Personal Representative (Executor) must provide beneficiaries with copies of the all the court pleadings which include an inventory and accounting. If an estate is not closed in one year, the Personal Representative must explain the reason why to the court. Since the probate court automatically enforces these requirements, no action is generally required by a beneficiary.  If something is not right in probate, all a beneficiary has to do is file an objection with the court. But with a trust, if something is wrong or nothing is happening, the beneficiary will have to initiate a separate legal action. The services of an attorney would be needed to file the law suit which could be expensive.

Why probate may be helpful from the administrator’s perspective:  A trustee is liable for damages resulting from a failure to fulfill his/her duties. To be released from further responsibility and liability a trustee needs to bring the administration of the trust to a conclusion and obtain releases from the beneficiaries. If a beneficiary refuses to cooperate, it can delay settling the trust and distribution to other beneficiaries. The trustee can send a notice to beneficiaries stating that if they wish to object, they must file a lawsuit within six months. In contrast, closure is simple and direct with probate. Beneficiaries are given 30 days to object to the Petition for Discharge and proposed distribution. If no objections are filed, the court enters an Order closing of the estate and releasing the Personal Representative from further liability.  

For further information on your estate planning options 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.