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Change in Statutory Duty of Un-Qualified Personal Representatives

Written by on Aug 18, 2015| Posted in: General

When a person dies, with or without a last will and testament, there is a high probability that the person who died (the “Decedent”) will have left behind obligations that must be fulfilled and other matters that must be addressed before their property can be distributed. The property that a Decedent leaves behind when he or she dies and which is the subject of administration in probate court makes up what is called the “estate.” §731.201(14), Fla. Stat. (2015). Just like a business needs a manager to run its day-to-day operations, an estate needs a manager to finish handling the Decedent’s affairs so that the estate may be distributed, either according to the terms of the Decedent’s last will and testament or under the laws of intestacy. In Florida, the person who is charged with managing, or “administering,” the Decedent’s estate is called the “Personal Representative.” §731.201(28), Fla. Stat. (2015). The Florida legislature defines a Personal Representative as “the fiduciary appointed by the court to administer the estate” and specifically notes that the term “refers to what has been known as an administrator, administrator cum testamento annexo, administrator de bonis non, ancillary administrator, ancillary executor, or executor.” Id.

While the judicial system—specifically Florida’s probate courts—will certainly play a role in the administration of a Decedent’s estate, it is actually the Personal Representative who does the bulk of the work when it comes to administering the estate. After the Decedent dies, an “interested person,” which is “any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved,” may petition the probate court to commence the administration of the estate. §731.201(23), Fla. Stat.; §733.202, Fla. Stat. (2015). In petitioning the probate court to commence administration, the interested person may seek to “probate a will,” which means taking all of the steps necessary to establish the validity of a will and to admit a will to probate, or seek to have the estate administered under the laws of intestacy if the decedent died without a will. In either case, a personal representative must be appointed in order to ensure that the estate is probated in accordance with the Decedent’s will if they left one, or the laws of intestacy if the Decedent did not leave a will.

While only the Court has the power to appoint a Personal Representative to administer the estate, once appointed the Personal Representative has tremendous power to act on behalf of the estate without having to first obtain “adjudication, order, or direction of the court,” absent a specific obligation to do so pursuant to either the Probate Code or an order of the probate court. §733.603, Fla. Stat. Rather, the probate court will issue “letters of administration” to the Personal Representative, which grants the Personal Repressive with the Court’s authority to act on behalf of the estate. §731.201(24), Fla. Stat. Once the letters are issued, the Personal Representative “shall proceed expeditiously with the settlement and distribution of a decedent’s estate and, except as otherwise specified by this code or ordered by the court, shall do so without adjudication, order, or direction of the court.” §733.603, Fla. Stat.

Because of the immense power that is vested in the Personal Representative, the Florida Legislature imposes certain qualifications upon those who wish to serve as the Personal Representative. Under Florida law, a person is not qualified to serve as the Personal Representative of the estate if the person is not a Florida resident (unless he or she is of a certain class of family members of the Decedent), has been convicted of a felony, or is mentally or physically unable to perform the duties. §§733.302 – 733.304, Fla. Stat.

Despite Florida’s statutory scheme governing the qualifications to serve as a Personal Representative, until recently a loophole in the law permitted a convicted felon, or other person not qualified to serve as Personal Representative, but who had been appointed as Personal Representative, to serve if no objection was timely filed by an interested person within three months after service of notice of administration. Under §733.212(3), Fla. Stat., an interested person who had received formal notice of a petition for administration was required to object to the qualifications of the Personal Representative before the Court issued letters of administration. While the Personal Representative had an affirmative obligation to file and serve notice any time the person knew or should have known that they would not be qualified for appointment if application were then made, the statute failed to address the obligation of a Personal Representative who was not qualified to act at the time of appointment. §733.3101, Fla. Stat. (2014). Thus, if a person who was unqualified to serve was appointed as Personal Representative, they would be able to continue to serve if no objection was filed within three months.

The Florida legislature recently closed this loophole by amending §733.3101, Fla. Stat. (2015), to require that a Personal Representative must resign immediately if the Personal Representative knows that he or she was not qualified serve at the time of appointment. The practical effect of this change is that it places the obligation on the Personal Representative to step down, rather than on the interested persons to object, if the Personal Representative knows or should have known that they were not qualified serve at the time of appointment. This change also prevents the Court and/or interested persons from allowing a person who was not qualified to serve at the time of appointment to continue to act as Personal Representative. §733.3101, Fla. Stat. (2015). Where a Personal Representative actually was initially qualified to serve, but subsequently becomes unqualified to serve during the administration of the estate, they are now required to send notice to interested persons, but only if they actually know that they are unqualified to serve as Personal Representative. §733.3101(2), Fla. Stat. (2015). The notice under the revised statute must state the reasons why the Personal Representative is unqualified to serve and inform interested persons that they may petition to remove them from acting as Personal Representative. Id. In these scenarios a person who was initially qualified, but subsequently becomes unqualified to serve as Personal Representative may continue to serve if not interested persons object with the time proscribed the thirty days.

The former version of §733.3101 provided that a personal representative who failed to give notice when they knew or should have known that they would not be qualified if an application for appointment as Personal Representative were then made was personally liable for costs, including attorney’s fees, incurred in any removal proceeding, if the personal representative is removed. However, if no parties objected within three months to the appointment of a person as Personal Representative, despite that person never being qualified to serve as Personal Representative, there was be no liability on the part of that Personal Representative. Now, in addition to Personal Representatives who fail to give the notice as proscribed in §733.3101(2), Fla. Stat., a Personal Representative will be held personally liable if he or she knew or should have known of facts that would have required him or her to resign under §733.3101(1), Fla. Stat., but fails to resign. Thus, if you are seeking to be appointed as Personal Representative, but even suspect you may not be qualified, it is imperative that you seek legal counsel to assist you in determining whether you are qualified to serve as Personal Representative, even if you believe that no party will object to your appointment. Conversely, the new statute ensures that individuals who are improperly appointed as Personal Representatives when they were never qualified in the first place cannot escape liability simply by getting past the three months after the notice of administration threshold.

To serve as a Personal Representative carries with it great responsibilities, not only to administer the estate in accordance with the terms of the Decedent’s will and/or Florida law, but also to ensure that the Person is qualified to serve as the Personal Representative. For this reason, it is critical to seek counsel from a law firm specializing in probate administrations and fiduciary representation before asking to be appointed as a Personal Representative. The failure to do so can lead to serious, adverse consequences, such as having the probate court enter a monetary judgment against you personally.

 

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