Personal Representative’s Guide To Florida Probate Law
If you have recently been appointed as a Personal Representative of an estate in Florida or if you are drafting your will now and trying to decide who to choose to administer your estate, this guide is for you.
What Is Probate?
Probate is a court procedure by which a decedent’s estate is gathered, assessed, and distributed to any valid creditors left behind and to the beneficiaries of the deceased person’s estate.
Not all assets will be considered a part of the decedent’s estate for the purposes of probate. A properly set up and funded trust will keep those assets out of probate, and they can be distributed immediately and without court approval in accordance with the trust terms and instructions.
The average probate administration can take between six and eighteen months, depending on the complexity of the estate.
What Is A Personal Representative?
In the State of Florida, the person responsible for administering an estate is called the “personal representative.” In other states, this person is often referred to as the “executor” of the estate.
The personal representative is responsible for administering the will on behalf of the decedent in accordance with the terms of the will. Throughout the probate process, the personal representative is held legally responsible for protecting the decedent’s assets (including his or her home, savings, personal property, and any other probatable asset). This legal responsibility, or fiduciary duty, requires that the personal representative must at all times act and make decisions in the best interest of the estate.
Although the personal representative is often named in a deceased person’s will, the role is actually conferred by the probate court. A personal representative is an officer of the court, and a probate judge must issue Letters of Administration, giving the personal representative the authority to act on the estate’s behalf.
If the appointed personal representative is unwilling or unable to serve, a successor representative can step into the role or the probate judge can designate a replacement.
Who Is Qualified To Be A Personal Representative In The State Of Florida?
A personal representative may be an individual (usually a trusted friend or relative), bank, or trust company. To be qualified as a personal representative, however, this person (or entity) must meet the following requirements:
- Over the age of 18
- Mentally and physically capable of serving as the personal representative
- Never convicted of a felony
- A resident of Florida
- A non-resident of Florida who is a relative of the decedent or otherwise qualifies under Florida Statute §733.304
If the probate court determines, for any of the above reasons, that the nominated personal representative is unqualified to serve, the court will appoint a different individual to fill the role. If the will does not specify a personal representative (or if the decedent dies without a will), the court will first offer the position to the surviving spouse, if any. If there is no surviving spouse, or if he or she declines to serve as personal representative, the person selected by the majority of the decedent’s heirs will have the right to be appointed. If those heirs cannot agree on a suitable personal representative, the probate judge will choose someone to appoint.
What Does A Personal Representative Do Throughout The Probate Process?
Serving as a personal representative can be a lot of pressure (especially if the will is contentious, assets are difficult to locate, heirs are anxious to receive their inheritances, or there are a lot of creditors seeking to be paid out of the estate), and there is a lot to do. The best way to get through the process is to remain organized and follow each step of the process methodically.
In order to fulfill his or her administrative duties under Florida law, the personal representative must:
1. Obtain the decedent’s Death Certificate. The personal representative is often responsible for the funeral and/or burial arrangements. The funeral home can issue as many death certificates as are needed.
2. Find estate planning and other important documents. If the decedent had a will, the personal representative needs to locate and submit it to the court within 10 days of having knowledge of the individual’s death. The personal representative should also attempt to find paperwork related to insurance, investment accounts, funeral plans, bank accounts, real property, valuables (and documents that verify the value of antiques and collectibles), business interests, and any other documents that can help value the estate.
3. Identify and properly value the decedent’s probate assets. The personal representative must take inventory of all real property, investments, bank accounts, personal property, and any other probatable assets that comprise the decedent’s estate. Sometimes, the deceased person will leave the personal representative a list of assets and where to find them. However, it is not always this easy. The documents listed above, as well as any other information regarding assets, may be found in a file cabinet or safe deposit box. If there is no clear place where documents are held, the personal representative should check with the attorney who drafted the decedent’s will. He or she may have a record of assets on file. Once a list has been found or created, the personal representative will need to determine the total value of the estate.
4. Publish a “Notice to Creditors” in the local newspaper. This will give any potential creditors notice to file a claim for any outstanding debts.
5. Serve a “Notice of Administration” to all relevant parties. This notice should provide information about the personal representative and the probate administration process. This gives relatives, friends, and other interested parties a chance to object to the administration of the estate.
6. Conduct a diligent search to locate any known or ascertainable creditors. Once these creditors are located, the personal representative must notify them of the deadline by which their claims must be filed.
7. Defend the estate from improper claims and pay all valid claims. The estate is responsible for paying the valid creditor claims of the deceased person. If the amount of all valid claims exceeds the total value of the estate assets, the heirs are not responsible for covering the balance. However, the probate judge will prioritize the creditors if there are not enough assets to cover all valid creditor claims. Absolutely no distributions should be made to anyone before the probate judge determines that all creditors have been paid.
8. Hire any professionals needed to properly administer the estate (including attorneys, CPAs, appraisers, and investment advisors).
9. File any required tax returns and pay any outstanding taxes due.
10. Pay the expenses associated with administering the estate.
11. Make sure that all statutory distributions are made to the decedent’s surviving spouse and family. In the State of Florida, there are some statutory minimum distributions for spouses and immediate family. The purpose of these provisions is to avoid disinheriting immediate family in a will. If the will does not provide for any distribution to a decedent’s surviving spouse and/or immediate family, state law may require certain distributions be made before the remainder of the estate is paid out according to the will.
12.Distribute all remaining assets in accordance with the will.
13. Close the probate estate with the court.
When Does The Probate Process End?
After all valid claims have been paid and the remaining assets have been distributed in accordance with the will, or intestacy law, the personal representative may finalize the legal closing of the estate. The probate court will confirm that the matter is completed and then discharge the personal representative and close the estate.
Can A Personal Representative Be Compensated For His Or Her Work?
In the State of Florida, the personal representative is entitled to compensation from the estate for his or her services. However, if the personal representative is also a beneficiary of the will, he or she may choose to waive this right (as such compensation would be subject to income tax). Inheritances are generally not taxable (unless they are sufficiently large enough to trigger estate taxes), so it often makes sense to decline compensation because it is taxable income.
If the will does not specify how the personal representative should be compensated, Florida law provides guidelines for compensation based on the gross value of the administered estate (only on the value of the estate that is passing through probate; the gross value will not include assets that are transferred by beneficiary designation or trust). The gross value of the estate is assessed before considering any debts or obligations.
Florida Statute §733.617 describes presumed reasonable compensation for serving as personal representative of the estate, and sets forth percentages for “ordinary” services on a declining scale as the value of the estate increases. The statute provides the following guidelines:
3.0% on the first $1 Million
2.5% on the next $4 Million ($1M to $5M)
2.0% on the next $5 Million ($5M to $10M)
1.5% on anything more than $10 Million
If the will does specify a compensation amount, the personal representative may choose to renounce the written amount and elect the statutory compensation amount.
If the personal representative provides any additional services beyond the duties of administering the estate, such as running the decedent’s business, acting as the real estate agent when selling a property, etc., the personal representative may also be compensated for these “extraordinary” services.
The personal representative is also entitled to reimbursement for reasonable expenses such as the cost of death certificates, travel costs, engaging professional services, etc.
Can A Personal Representative Hire Professionals To Help?
It is highly recommended that personal representatives do not attempt to navigate this process alone. A team of professionals with the proper experience can make the probate process a much smoother and more manageable one and can help avoid costly mistakes.
An experienced probate attorney is necessary and will guide the personal representative through the legal steps of the probate process. He or she can also serve a valuable communications role when dealing with family members and beneficiaries.
A tax professional will likely be necessary to file any final tax returns and assess tax liabilities that may arise from the inherited assets.
Appraisers will also likely be necessary to determine the fair market value on real estate, antiques, collectibles, and any other assets of undetermined value.
Ask A St. Petersburg Probate Attorney For Assistance
If you are named as a personal representative under a Florida will, or have questions about serving in such capacity, you should seek the counsel of an experienced probate attorney, like the ones at Kira Doyle Law, for assistance. Even in the simplest of probate estate matters, many legal issues can arise. To learn more about administering a probate estate in Florida, give us a call at our St. Petersburg office, at 727-537-6818, to schedule an appointment with one of our experienced probate attorneys today!