What is Probate?
Most people have never heard of the probate process until they are thrust into a situation where they have to navigate a confusing system full of legalese. So, what exactly is probate?
According to the Florida Senior Legal Guide:
The purpose of probate is to collect a deceased person’s assets; pay his or her claims, taxes, and administrative expenses from these assets; and distribute the remainder of the assets after administrative expenses to the beneficiaries entitled to receive them. A personal representative (known as an executor) is appointed by the court to pay the deceased’s claims and taxes and to distribute the remainder of the estate assets according to the terms of the deceased person’s will. If a person dies without a valid will, the personal representative then distributes the remainder of the estate assets in fixed percentages to the heirs named in the Florida statute.
How Do You Start Probate Proceedings?
Probate proceedings can be started by finding a local legal professional that specializes in probate and can guide you through the process, but generally speaking it starts by submitting a court filing along with the required documents along with any required documentation (which varies with the type of proceeding).
What Are the Types of Probate Proceedings In Florida?
In Florida, Formal Administration (also known as “regular” probate) occurs when the estate assets exceed $75,000 and/or when the estate needs to appoint a Personal Representative (PR) to act on its behalf. In this instance, the executor or an interested party (for example an heir or beneficiary) files with the court to designate a PR. At that time, the court will issue Letters of Administration and, if accepted, formally appoint the PR and the probate case is considered open.
If the decedent left a will, the Personal Representative will submit it to the court to determine validity. If it is determined to be valid, the PR can then follow the wishes of the decedent outlined in the will. However, the will can still be challenged by an interested party.
In cases where the value of the estate is less than $75,000, Florida law allows for alternative proceedings that take less time and are less complex.
Summary Administration is a simplified probate proceeding which applies if the value of the estate is less than $75,000, there are no debts to be paid, or if the decedent passed away more than 2 years ago.
Similar to Formal Administration, Summary Administration starts with filing a Petition for Administration wherein the court will determine if the estate qualifies for this type of proceeding. Dissimilarly, no Personal Representative will be appointed.
Once the estate has been qualified, and if the decedent passes away with a will (testate), the assets will be distributed according to their wishes. If the decedent passes without a will (intestate), the distribution of assets will be determined by Florida Law.
Disposition of Personal Property Without Administration
A Disposition of Personal Property Without Administration is filed in instances where the person who paid the final expenses, such as funeral or medical costs or incurred expenses within the last 60 days of the decedent’s death, petitions the court for reimbursement. While this is not technically an administration (because none occurs), the responsible person can file and request release of the solely owned assets of the decedent to cover the aforementioned costs.
What do I do if I inherited a property in Florida from someone whose permanent residence was in another state?
In the case of an inherited Florida property where the owner’s permanent residence was outside of Florida, an Ancillary Administration will need to be filed. This type of proceeding is similar to Formal Administration, however it only applies in these circumstances. It is recommended that you hire a knowledgeable probate attorney when in this situation.
How Long Does the Probate Process Take in Florida?
Unfortunately, the length of the probate process depends on too many factors to nail down a specific time frame. However, according to LegalZoom a simple estate with an informal proceeding can be as short as a few weeks, whereas a complex estate going through Formal Administration can take over a year or more.
Who Pays for the Probate Process?
During the probate process, the executor, administrator, or Personal Representative will be responsible for opening an estate bank account with any cash left behind to pay for attorney’s fees, burial costs, settling debts, taxes, mortgage payments, utilities, insurance, and any other expenses related to the estate.
What Happens If There is Not Enough Money in the Estate to Pay Final Expenses?
If there is not enough money in the estate to cover all of the final costs (ie the estate is insolvent), assets from the estate will be liquidated to cover them. In some cases, this will mean that the Personal Representative will have to pay the costs out of pocket and then request reimbursement from the state. This may also affect assets that have been bequeathed to beneficiaries as they can only be released after all estate debts have been paid.
How Much Does It Cost to Hire a Probate Attorney?
The attorney for the personal representative is also compensated from the estate assets for his or her services. Florida has a statute that allows for reasonable compensation for services provided to an estate by the personal representative’s attorney. This compensation for the attorney in a formal estate administration is based upon the value of the probate assets and all income earned. The compensation is computed as follows:
- $1,500 for estates having a value of $40,000 or less
- an additional $750 for estates having a value of more than $40,000 and not exceeding $70,000
- an additional $750 for estates having a value of more than $70,000 and not exceeding $100,000
- for estates having a value in excess of $100,000, at the rate of 3 percent on any amount above this up to $1,000,000
- at the rate of 2.5 percent for all above $1 million and not exceeding $3 million
- at the rate of 2 percent for all above $3 million and not exceeding $5 million
- at the rate of 1.5 percent for all above $5 million and not exceeding $10 million
- at the rate of 1 percent for all above $10 million
In addition to reasonable compensation for ordinary services, the attorney for the personal representative is allowed reasonable compensation for an extraordinary service, including
- the purchase or sale of real property by the personal representative
- involvement in a will contest
- will interpretation
- a proceeding for determination of beneficiaries
- a contested claim
- apportionment of estate taxes
- any litigation by or against the estate
The attorney is also entitled to compensation for preparation of the estate’s federal estate tax return. Once the gross estate is determined and the return is prepared by the attorney, a fee of one half of 1 percent of the value up to $10 million and one fourth of 1 percent of the value in excess of $10 million of the gross estate is considered reasonable compensation for attorney’s services.
The compensation for ordinary services or for extraordinary services may be increased or decreased by the court, in which case the court considers the same factors it does in deciding whether to adjust the amount of compensation for a personal representative. [Willtrust.com]
Do I Really Need to Hire a Probate Attorney?
If the estate is uncomplicated and there are no conflicts among the interested parties, you could likely navigate the probate process without a lawyer. Contact your local county clerk and ask about the specifics of probate proceedings in your area.
Are Personal Representatives Entitled to Compensation?
The personal representative is entitled to receive compensation from the estate assets for his or her services. The Florida statutes provide that a certain commission will be assumed reasonable for ordinary services rendered to an estate by the personal representative. This commission is based on the value of the probate assets and any income those assets earn. The commission is calculated as follows:
- at the rate of 3 percent for the first $1 million
- at the rate of 2.5 percent for all above $1 million and not exceeding $5 million
- at the rate of 2 percent for all above $5 million and not exceeding $10 million
- at the rate of 1.5 percent for all above $10 million.
In addition to this commission, a personal representative may be allowed additional compensation for extraordinary services, including:
- the sale of real or personal property
- bringing suit for or against the estate
- adjusting or paying taxes
- carrying on the deceased’s business
The compensation for ordinary services (or for extraordinary services) may be increased or decreased by the court. To determine whether to do this for such services, the court must consider these factors:
- the promptness, efficiency and skill with which the administration was handled by the personal representative
- the responsibilities assumed and the potential liabilities of the personal representative
- whether the estate benefited or suffered from the personal representative’s services
- whether the administration of this service was complex or simple [Willtrust.com]
Can Probate Be Avoided?
Probate can be avoided if the decedent left behind nothing of value or if they put the estate in a trust or some other type of account (joint or otherwise) designed to avoid it.
According to LegalZoom, the most straightforward way to avoid probate is simply to create a living trust. A living trust is merely an alternative to a Last Will. Unlike a will, which merely distributes your assets upon death, a living trust places your assets and property “in trust” which are then managed by a trustee for the benefit of your beneficiaries. It allows you to avoid probate entirely because the property and assets are already distributed to the trust.
A trust also enables you to avoid the cost of probating a will. One of the main drawbacks of a will is the cost of probating it or passing it through the courts. In probate, there are court fees taken from the gross estate (the amount of the entire estate before the debts are paid out). This fee can often be as high as ten percent of the total estate which often is better used paying trustee fees and burial costs. With a living trust you avoid these court costs all together.
See the full LegalZoom article here to read about additional ways that probate can be avoided prior to death.
What If I Still Have Questions About the Probate Process?
For additional information about probate proceedings, it is always recommended reaching out to a legal professional and or the Clerk of Court in your area.
If you are in Pinellas County, Florida, you can reach out to the Pinellas County Clerk’s Office at (727) 464-3321 or visit www.mypinellasclerk.org.
Disclaimer: While the probate process happens throughout the United States, the information contained in this post are primarily relevant to proceedings in Florida, specifically Pinellas County.
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