An Overview of Probate in Florida

First, a disclaimer. This is a very short overview concerning probate in Florida. It is not designed to be comprehensive, nor is it going to answer all questions. If you have any questions, contact a Florida attorney. Consult a qualified attorney before taking any action. This document is, at best, a simplified explanation, and specific facts may give rise to very different conclusions. This is only a roadmap, a thumbnail sketch, and a picture painted with very broad strokes. I am leaving a lot of details out, and almost anything that I state here has exceptions. This is not designed to be legal advice, no client- attorney relationship forms, only a fool would rely on the internet in legal matters, and if you ignore this disclaimer and something goes bad, don't come looking for me.

Next, a couple of points must be made before discussing probate in Florida.

When someone (the decedent) dies and leaves property, that property must be distributed, or handed over, to the decedents heirs. There are three ways that property can pass upon death:

- By contract. This is where the decedent had an agreement, or a contract, with some third party, and that contract provides that when the decedent dies, the property will be paid over to someone else. The most common example of property passing by contract is life insurance, where the decedent has a contract with a life insurance company, and the contract provides that so long as the decedent pays the insurance premiums, when the decedent dies the life insurance company will pay the death benefits to the beneficiary or beneficiaries.

Life insurance is not the only example of property passing by contract. In a lot of cases, financial instruments can pass by contract as well. Most bank accounts, checking accounts, savings accounts and certificates of deposit can be set up with "Pay on Death" or "Transfer on Death" provisions, which mean that the account holder owns the account so long as they live, but once they die, the account is transferred to the beneficiary, who is the person named under the Pay on Death provision. Likewise, many securities, such as IRA's, Keogh Plans, stocks, bonds, mutual funds and annuities can also contain Pay or Transfer on death provisions. If somone is named as a beneficiary, then there is probably a pay on death provision.

- By operation of law. This involves cases where two or more people are Joint owners of the same piece of property. The exact type of ownership can vary, with typical terms being "Joint owners" "Joint Tenants" "Joint tenants with right of surviviorship" and "Tenants by the entireties". While there may be some differences in the details of the ownership, generally all of the ownerships listed will provide for 'survivorship'. This means that the first person amongst those listed as owners that dies loses their ownership rights at the moment of death, and the decedents ownership rights passes automatically, by operation of law, to the survivor or survivors.

Typically, survivorship rights will be most common in cases involving real estate. Many times real property is titled in the name of husband and wife, either as joint tenants, or as tenants by the entirety. Motor vehicles, such as cars, trucks and vans, are frequently titled in such a way as to give rise to survivorship rights. Some financial instruments, such as bank accounts of all types, stocks, bonds and mutual funds, will be titled as Joint tenants, once again usually between husband and wives. While sometimes people will title assets as joint tenants in cases other than husband and wives, such as between parents and children, this can be very dangerous, as a parent creating a joint tenancy with a child gives the child an ownership interest, now, in the property, and if the child should get in financial trouble, even through no fault of their own, such as being involved in a car accident, creditors of the child may seek to seize the asset. I generally discourage parents from titling assets jointly with their children, unless there are special circumstances to do so.

- By probate. If property does not pass by contract or operation of law, it must pass by probate. Essentially, probate involves the process of listing all property that does not pass by one of the first two methods, estimating the value of that property, and submitting that list to a probate judge along with a list of creditors and beneficiaries, or heirs. The judge will make certain that the creditors (people whom the decedent died owing money to) are paid, and that the property goes to the beneficiaries.

The point to keep in mind is this: Property will usually pass by one, and only one, of these methods. If life insurance is paid directly to a beneficiary, it will not pass by probate. If property passes by operation of law to a joint holder, it does not pass by probate. Nevertheless, occasionally there are exceptions, such as where life insurance is payable to an estate. In that case it would pass first by contract, (from the life insurance company to the estate) then by probate (from the estate to the heirs).

Why probate?

Probate does two things: First, it makes sure that creditors of a decedent (people whom the person owed money to) are paid, and second, it distributes the property that the decedent owned to his heirs or beneficiaries- those people who are entitled to inherit the property.

Who is entitled to inherit?

This question can get very complicated, but in general, there are two methods of determining who inherits an estate. If the decedent left a will, then the persons named as beneficiaries in the will shall inherit the estate, subject to creditors claims and rights of a surviving spouse or minor (under 18) children. If the decedent did not leave a will, then the State of Florida has set out in laws FS 732.102  and FS 732.103   who shall inherit, and in what proportion.

What is involved in probate?

Florida has 3 basic types of probate, or adminstration.

The most common type is "full administration" which involves the naming of an "personal representative" (which is what Florida calls an executor), the petitioning of the court for administration, which assigns a case number and opens a file, notification of all beneficiaries and known creditors, publication in a local newspaper of a notice of administration to let unknown creditors know of the probate, filing an inventory listing all property involved in the estate, the payment to creditors of money owed, the distribution of the estate to the heirs, and closing the estate.

The second most common type is "summary administration" which involves either estates with a value of less than $75,000, or where the decedent has been dead for more than 2 years. Usually, summary administration is best used where the decedent has been dead more than two years, as this cuts off all claims by most creditors, or in the case where the estate does not owe any money or has paid all creditors. Frankly, in my opinion, if there are outstanding bills then summary administration is usually more trouble than it is worth.

A third type of administration is called "Disposition without adminstration", and is used for very small estates, and is typically done without a lawyer. Our local court in Ocala has a short explanation of how it works here in Marion County Florida  http://www.marioncountyclerk.org/public/index.cfm?Pg=Probate   , but keep in mind that other counties may have different procedures.

Ancillary administration

Sometimes a person will die a resident of a state other than Florida, and their will is probated in that state. Nonetheless, they died owning Florida Property, usually real estate, and the court in the other state will not have jurisdiction over the real property in Florida. In this case, a court file must be opened in Florida, and the will must be offered for Ancillary Administration. Essentially, this means that a copy of the will, along with probate paperwork from the other state, must be filed with the court, and a Florida court must enter orders regarding who gets the Florida property.

How much does probate cost?

It depends on the nature of the estate. Generally speaking, the more creditors, the more beneficiaries, and the more assets in the estate will cost more to probate. Nonetheless, an estate consisting of a few relatively valuable assets, and no outstanding bills, may cost less to probate than an estate involving less valuable assets but with a lot of outstanding bills. Also, depending upon the estate, there may be some work that needs to be done that is not technically "probate' in the sense that it goes before a probate judge, but still must be done to clear the estate- such as filing a Federal Estate Tax Return, if the estate is taxable. Florida has a law that sets out what is a presumptively reasonable fee FS 733.6171  based upon the value of the estate for the attorney who is handling the estate, but keep in mind that the law specifically provides that the attorneys fee may be decided on a different basis. Personally, I usually work on an hourly basis and with a minimum retainer. Probate fees can vary widely, and given that most probate work is form intensive- that it involves a lot of paperwork, and that most of the standard probate forms are available for use on computer, an executor or personal representative may be better off hiring an attorney on an hourly basis, so long as the law office is reasonably efficient. This is entirely negotiable between the executor and the attorney.