Florida Probate is a process where a decedent’s assets are transferred to heirs or beneficiaries through a court-supervised process. Probate in Florida can often be time-consuming, stressful, and expensive. However, Probate happens all the time because people do not do the proper estate planning to ensure their assets do not go through the court system.
One of the first jobs for beneficiaries is determining whether assets need to go through probate here in Florida. The easiest way to do this is to list all the decedent’s financial accounts or properties. You will then need to figure out how the accounts are titled and whether the accounts have beneficiaries listed. If a financial account is jointly titled or has a beneficiary, then it is unlikely the financial account will need to go through probate.
Suppose the account or property was jointly owned and provides survivorship rights (e.g., joint tenants with rights of survivorship). In that case, the asset passes directly to the survivor by operation of law and does not go through probate. If the financial account was not jointly owned and just in the decedent’s name, the next step is to contact the institution to see if any beneficiaries were listed. If the decedent placed beneficiaries on the financial accounts, then these financial accounts pass automatically to the beneficiary and skip the probate process entirely.
Real property just in the decedent’s name and not jointly owned will have to go through probate. The only exceptions would be if the decedent executed a revocable trust and deeded the property to the trust or executed a ladybird deed.
Example: George died with a homestead and a bank account solely in his name. George did not place the homestead into a trust or draft a ladybird deed. George also did not add pay-on-death beneficiaries to his bank account.
Result: George’s homestead and bank account must go through Probate here in Florida because the assets were not jointly owned, and he did not have beneficiaries listed on his financial account.
Summary Administration Probate in Florida
Florida has two main types of probate: Summary Administration and Formal Administration. A Summary Administration probate in Florida (also known as a small estate affidavit in other states) is an abbreviated form of probate for estates less than $75,000 or when the decedent has been dead for more than two years. Summary Administrations typically take anywhere from thirty to ninety days and are significantly cheaper than Formal Administrations. A Summary Administration can also be done regardless of whether a decedent had a Last Will and Testament.
Caution: make sure to read the decedent’s Last Will. Sometimes, the Last Will directs that a formal administration must be opened. It is uncommon to see this language in a Last Will; however, a summary administration will not be allowed if it does have this language.
Summary Administrations differ significantly from a Formal Administration since a personal representative is not appointed to represent the estate. Only a petitioner must sign the Petition for Summary Administration. Any beneficiary or a person nominated as a personal representative in the Last Will can sign the Petition for Summary Administration.
Summary Administrations are often not a good choice if there are creditor claims or when not all of the decedent’s assets are known. Sometimes, a quick summary administration can become messy when unexpected creditors file claims against the Estate. Suppose you’re confident there may be significant creditor claims. In that case, it’s best to wait two years to open the probate or open a formal probate so the creditor claims can be handled appropriately.
Example: Dominick was in a skilled nursing home when he passed and likely owed the nursing home many thousands of dollars. Dominick’s family would be better off waiting two years to open the probate or opening a formal probate where a personal representative is appointed. If Dominick’s family opens the probate before the two years, then there’s a good chance the nursing home can take most of the estate assets.
Pro tip: all creditor claims are barred in Florida after the decedent has been dead for more than two years. Waiting to open the probate here in Florida is a common strategy to avoid having to pay creditor claims.
Once a Summary Administration is complete, the Judge will sign an Order of Summary Administration directing assets to be distributed to the decedent’s beneficiaries. If the decedent had homestead property here in Florida, the Judge will also sign an Order Determining Homestead. Once the Order Determining Homestead is signed and recorded, the order will immediately pass title to the beneficiaries.
Formal Administration Probate in Florida
A Formal Administration probate is for estates that have a value of more than $75,000. Formal Administrations are much longer and more involved than Summary Administrations due to statutory and court requirements. For example, Formal Administrations have a mandatory creditor notice period lasting three to four months. Formal Administrations often last more than seven to eight months, and sometimes they can go beyond a year. Formal Administration probates are also significantly more expensive than Summary Administration probates since Formal Administrations are much more involved than Summary Administrations.
Formal Administrations have a personal representative appointed on behalf of the estate, and the probate process will involve validating the Last Will and testament, paying any debts and taxes, gathering estate assets, and distributing the assets to the beneficiaries. The personal representative is tasked by the court to complete all of these tasks.
A Formal Administration is sometimes preferable to a Summary Administration when the estate value is less than $75,000. If there are significant creditor claims, the Summary Administration process makes it very difficult to effectively deal with creditor claims since no personal representative is appointed on behalf of the estate. When a personal representative is appointed, the personal representative can negotiate with creditors, challenge creditor claims, and make sure that all creditor claims are correctly handled.
Another situation where a Formal Administration probate is preferable is when some of the decedent’s assets are unknown, or you are missing essential asset information, such as account numbers and asset amounts. If no personal representative is appointed, then there will be no way for you to reach out to financial institutions to see if there are other assets or obtain essential information.
Example: Alice died in Florida with a $60,000 bank account and a homestead. Since the homestead has a value of $0 and the bank account is less than $75,000, her daughter opens a Summary Administration probate. She obtains an order of summary administration, transferring Alice’s assets to her. Her daughter then receives a letter from a life insurance company notifying her that Alice also had a whole life insurance policy. Still, the letter does not include details about the entire life insurance policy amount.
Result: for Alice’s daughter to obtain information about the whole life insurance policy, she must re-open the probate and then convert Summary Administration to a Formal Administration to be appointed personal representative. Once she is the personal representative, she can obtain the life insurance policy.
Tip: The decedent’s homestead has a value of $0, so consider that when calculating whether a Formal Administration is necessary. Many people mistakenly believe the homestead’s actual value when determining whether a Summary or Formal Administration is appropriate.
Formal Administration is complete when all estate assets have been appropriately distributed to the decedent’s beneficiaries, and all creditor claims have been handled. The Judge will sign an Order of Discharge, which discharges the personal representative of any further duties. If the decedent had homestead property here in Florida, the Judge will also sign an Order Determining Homestead. Once the Order Determining Homestead is signed and recorded, it immediately passes title to the beneficiaries.