FLORIDA PROBATE ADMINISTRATION
Formal Administration vs. Summary Administration
Chapter 733 of the Florida Statutes is titled “Administration of Estates” and it governs probate administration.
In general, “formal administration” is required when the decedent has been dead for two years or less and when the value of the probate estate exceeds $75,000. Remember that the value of the probate estate is not the same as the value of the gross estate. A decedent’s gross estate consists of everything in which the decedent had an ownership interest, regardless of the form of property and regardless of where it is located. It is a term borrowed from the Internal Revenue Code. To read more about a decedent’s gross estate, please click here.
The probate estate consists of those assets that were owned by the decedent and the decedent alone. For example, a sole-named bank account, a retirement account with no named beneficiary, a house in the decedent’s name with another person as tenants in common. Jointly-owned property does not pass through probate and neither does property with a named beneficiary. Assets held in a revocable or living trust do not pass through probate. So, a person could have a $5,000,000 gross estate and have no probate estate, a small probate estate or a probate estate of the same size as the gross estate. It simply depends on how the decedent’s assets were owned at the time of his/her death.
The formal probate process involves the application by a qualified fiduciary to be appointed personal representative (some states use the term “executor”). That person may have to post a bond or the court may require a restricted depository in lieu of a bond. A restricted depository is a bank account from which no withdrawals can be made without court order. Both the bond and the restricted depository are intended to protect beneficiaries from maladministration, whether intentional or accidental. The duties and powers of the personal representative are set forth in great detail in the statutes, as are formulas for compensation for the personal representative and his/her attorney. Creditors must be notified and given an opportunity to present their claims to the personal representative. Once the assets have been marshaled and the creditors have been satisfied, then the personal representative must account to the beneficiaries for the period of administration and distribute the assets to them. Upon successful completion of administration, the personal representative is discharged from any further duties and liabilities.
The formal probate process can take anywhere from 4-6 months to many years, depending on the nature and complexity of the case and whether litigation is involved.
Chapter 735 of the Florida Statutes is titled “Small Estates” and it governs two abbreviated forms of probate: summary administration and disposition of personal property without administration.
According to Fla. Stat. §735.201, summary administration may be had in the administration of either a resident or non-resident decedent’s estate, when it appears:
- in a testate estate (one where the decedent had a will), the will does not direct administration;
- the value of the entire probate estate in Florida, less the value of exempt property, does not exceed $75,000 OR the decedent has been dead for more than 2 years.
- If a decedent dies with $35,000 in assets subject to probate, then summary administration can be utilized because the size of the estate is small.
- If a decedent dies with $100,000 in assets subject to probate and has been dead for 4 years, then summary administration can be used because of the length of time that has passed since the decedent’s death.
The reason for the 2-year rule is that there is a statute that limits claims against an estate to two years. Fla. Stat. §733.710 states that: “notwithstanding any other provision of the code, 2 years after the death of a person, neither the decedent’s estate, the personal representative, if any, nor the beneficiary shall be liable for any claim or cause of action against the decedent, whether or not letters of administration have been issued, except as provided in this section.” (The exceptions are for creditors who timely filed claims under Fla. Stat. §733.705 and purchase money security interests, e.g. mortgage). This “limitation on claims against estates” statute is called a statute of repose. It provides a date upon which (2 years after date of death) the creditor’s action no longer exists, whether it has accrued by that date or not, so it entirely cuts off a creditor’s right of action. It is a stricter deadline than a statute of limitations because it may not be tolled by fraud, discovery of claim, etc.
The other abbreviated form of probate administration is called “disposition of personal property without administration.” This type of probate is technically not administration at all. It involves the filing of one pleading (this may be done by information affidavit of letter) on which the court will issue an order. It is available only if the decedent had only exempt personal property (for example, a personal use automobile) and non-exempt property that does not exceed in value the sum of preferred funeral expenses ($6,000 max) and reasonable and necessary medical and hospital expenses of the last 60 days of illness.