Insider Trading: Sweetheart deals cannot undermine priority of creditors in probate code.
Generally, after someone dies, their relatives open up a probate estate with the court. After the estate is opened, a personal representative is appointed. This person has many responsibilities, one of which is to settle claims with the decedent’s creditors. The Florida Probate Code at section 733.707 provides a priority of creditors. This priority becomes critical in certain situations, like when there aren’t enough assets to pay all the creditors. For this reason, personal representatives are not permitted to make “side deals” with certain creditors that circumvent the priority of creditors set forth in the Probate Code. Read the rest of this entry