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Administering the Estate Effectively

    • HOW TO RESPOND TO CREDITORS’ CLAIMS
      1. Notice. The personal representative must make a reasonably diligent search to ascertain creditors’ names and addresses and must promptly serve a notice to creditors on known and reasonably ascertainable creditors because the personal representative owes a fiduciary duty to creditors and failure to conduct the diligent search may breach that duty. Fla.Stat. §733.602(1), §733.609, §733.2121(3)(a); Fla.Prob.R. 5.241(a), Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478 (1988).
      2. Statement. Within four months of the first publication of notice to creditors, the personal representative must file a verified statement that he or she has made a diligent search to ascertain the names and addresses of persons having claims against the estate. This statement must include:
        • The names and, if known, the addresses of any persons having claims who have not filed a timely claim or had their claim included in a personal representative’s filed proof of claim, and
        • Must also indicate whether such persons have been served with a notice to creditors or otherwise received actual notice. Fla.Prob.R. 5.241(d)
      3. The Time to Respond. The time limit for filing a claim for a known or reasonably ascertainable creditor who has been served with a notice to creditors is the later of:
        • Three months after the first publication of notice to creditors or 30 days after the date of service of the notice to creditors on the creditor. Fla.Stat. 733.702(1).
        • Morgenthau v. Estate of Andzel 26 So.3d 628 (Fla. 1st DCA 2009) court held that the time for filing a claim of a reasonably ascertainable creditor who was not served with a notice to creditors is within three months from the first publication unless the creditor obtains an extension of time to file.
        • Foster v. Cianci, 773 So.2d 1181 (Fla.2d DCA 2000) court held that an extension of time to file may be obtained even if the creditor was aware of the administration of the estate prior to the expiration of the three-month time for filing claims. Fla.Stat. 733.710
        • Fla.Stat. §733.702(1) the time for filing a claim for a creditor who is not known or reasonably ascertainable, if a notice to creditors has been published, is three months after the first publication.
        • Fla.Stat. §733.702(3) it is not necessary to object to or to strike a late-filed claim and no independent action may be brought on that claim unless an extension of time to file the claim has been granted by the court. That “extension may be granted only upon grounds of fraud, estoppel, or insufficient notice of the claims period.”
        • Two Year Cut Off. Regardless of whether letters of administration have been issued in Florida, within two years of the date of death of the decedent, if a claim is not filed, the claim is forever barred. Fla.Stat. §733.710.
      4. The Response. All claims are to be paid by the personal representative within one year from the first publication of notice to creditors. This time can be extended for good cause.
        • Objections to claims. The Personal Representative or any interested person may file a written objection to any claim within four months of the first publication of notice to creditors, or within 30 days of a timely filed claim, whichever occurs later. Fla.Stat. §733.705(2).
          • The objector must serve a copy of the objection on the claimant or the claimant’s attorney within 10 days after the objection is filed, or the objection is deemed abandoned. If the objector is not the personal representative, a copy of the objection must also be served on the personal representative. Fla.Prob.R. 5.496(c).
          • Content of the objection must include a statement that the claimant is limited to a period of 30 days from the date of service of the objection within which to bring an action on the claim. Fla.Prob.R. 5.496(c).
          • If the objection is to a personal representative’s proof of claim it must state the particular items objected to. Fla.Prob.R. 5.499(b).
        • Independent action. The claimant has 30 days from the date of service of the objection to file suit thereon. This time may be extended by agreement or by the court. Fla.Stat. §733.705(5).
        • What if the objection is to a claim filed by someone other than the personal representative? The personal representative may seek an order relieving her from defending the claim in an independent action or may seek appointment of the objector as an administrator ad litem to defend the claim. Fla.Stat. §733.705(3).
        • Attorney’s Fees. An award of attorney’s fees may be entered by the court as provided in Fla.Stat. §733.106(3). If the fees are entered against the estate, the court may apportion the fees as provided in Fla.Stat. §733.106(4).
        • Unmature claim. Court will not discharge the estate unless the personal representative has prepaid the amount due on the claim or there is an agreement with the claimant. Fla.Stat. §733.705(7).
        • Contingent claim. Court will not discharge the estate unless the creditor and personal representative agree to disposition of the claim or another method of payment. Fla.Stat. §733.705(8).
    • INSOLVENCY
      1. Priority. The priority of the order of payment of expenses and claim is set forth in Fla.Stat. §733.707. The personal representative acts at his or her peril if claims of lower priority (or distributions to beneficiaries) are satisfied and insufficient assets remain to pay higher priority claims. The Code divides claims into eight classes in order of their priority as follows:
        • Class 1.–Costs, expenses of administration, and compensation of personal representatives and their attorneys fees and attorney’s fees awarded under s. 733.106(3).
        • Class 2.–Reasonable funeral, interment, and grave marker expenses, whether paid by a guardian, the personal representative, or any other person, not to exceed the aggregate of $6,000.
        • Class 3.–Debts and taxes with preference under federal law, and claims pursuant to ss. 409.9101 and 414.28.
        • Class 4.–Reasonable and necessary medical and hospital expenses of the last 60 days of the last illness of the decedent, including compensation of persons attending the decedent.
        • Class 5.–Family allowance.
        • Class 6.–Arrearage from court-ordered child support.
        • Class 7.–Debts acquired after death by the continuation of the decedent’s business, in accordance with s. 733.612(22), but only to the extent of the assets of that business.
        • Class 8.–All other claims, including those founded on judgments or decrees rendered against the decedent during the decedent’s lifetime, and any excess over the sums allowed in paragraphs (b) and (d).
      2. What if there are insufficient assets? If there are insufficient assets left in the estate after payment of any class to pay all of the next succeeding class, the next succeeding class is paid ratably in proportion to the amount of the obligation. Fla.Stat. 733.707(2)
      3. Can the Personal Representative Seek Contribution from the Decedent’s Trust to Pay Estate Expenses and Claims? Trustees of revocable living trusts created by the decedent are required to contribute trust assets to a probate estate upon certification by a personal representative that the assets of the probate estate are insufficient to fund statutory entitlements, preresiduary devises, expenses of administration and creditors’ claims, if the residuary of the probate estate is insufficient to pay such items. Fla.Stat. §733.607(2), Fla.Stat. §736.05053.
      4. Chase Manhattan Bank, USA, N.A. v. Estate of Silveira, 815 So.2d 770 (Fla. 4th DCA 2002); Fla.Stat. §733.903. If an estate is insolvent, a claim will not be stricken simply due to the insolvency. A personal representative may be discharged even if there are unpaid claims.
    • MANAGING THE ESTATE CASH RESPONSIBLY
      1. Notification. It is a good idea to notify each bank or savings and loan association where decedent was known or suspected to maintain an account or to have a certificate of deposit in decedent’s name or jointly. The letter should ask the institution to furnish counsel with the following:
        • The type of account (checking, savings, CD, etc.)
        • The exact principal balance at the date of death;
        • A separate interest figure for any interest accrued but not posted at the date of death;
        • The exact manner in which the account was held, whether individually, jointly (please furnish the name or names of the joint owners), in trust for, payable on death or transfer on death (please furnish the name of the trustee and the beneficiary), custodial (please furnish the name of the custodian and beneficiary), convenience or agency (please furnish the name of the principal and the other signatory or agent), etc.;
        • The date the account was opened;
        • The source of the funds to open the account, if known (for example, transfer from another account with your institution);
        • A copy of the signature card (front and back);
        • For CDs, the interest rate and maturity date
      2. Estate Bank Account It is important to open an account for the Estate. Some banks may require the account documents be signed before a bank officer or employee. Often, the representative will choose to open the estate checking account in the same bank where the decedent had either checking or savings accounts. In this case, the initial deposit can be accomplished by directing the bank to transfer funds from an existing account.
        • Complete an IRS Form SS-4, Application for Employer Identification Number.
        • Bank Signature Card for Checking Account
        • Request in writing an estate checkbook to be delivered to counsel’s office (request should be accompanied by an executed signature card and certified copies of the Letters of Administration identifying the Personal Representative and a copy of the representative’s driver’s license.)
      3. Principal and Income Accounting. All property of the decedent within Florida (except protected homestead real property), and the rents, income, issues, and profits therefrom, are assets in the hands of the personal representative for the payment of devises, family allowance, elective share, estate and inheritance taxes, claims, charges, expenses of the administration, obligations of the decedent’s estate, enforcement of contribution and equalization of advancement, and distribution. The Principal and Income law, codified at Chapter 738 of the Code, states that “principal” is the realty or personalty that constitutes the corpus of the estate. “Income” is the return derived from the principal. Money received from the sale of estate property generally is treated as principal, whereas income from estate business
      4. Use of Cash. Fla.Stat. §733.805 provides an order of priorities as to the use of the assets for the payment of debts and administrative expenses:
        • Property passing by intestacy.
        • Property devised to residuary devisees.
        • Property not specifically or demonstratively devised.
        • Property specifically or demonstratively devised.
      5. Investment of Cash Assets. “Because creditors’ claims will not be paid until the time for filing claims has passed, it is desirable that the personal representative invest the liquid assets of the estate to provide the greatest amount of income while simultaneously using only the most secure forms of investment permitted by law. The ability to accomplish this is governed by the provisions of the will, orders of the court, and limitations of the estate. Fla.Stat. §733.612(4) directs the personal representative to invest estate funds as provided in Fla.Stat. §518.10-518-14, after “considering the amount to be invested, liquidity needs of the estate, and the time until distribution will be made.” PRACTICE UNDER FLORIDA PROBATE CODE (Fla.Bar CLE 6th ed. 2010), Chapter 9.
    • DISCLAIMERSGoverned by the Florida Uniform Disclaimer of Property Interests Act, Chapter 739. See also, IRC §§2046, 2518 and the corresponding regulations.
      1. Why disclaim? Sometimes there is a tax advantage for a beneficiary to disclaim their inheritance. The disadvantage is that, unless the disclaimant is the surviving spouse of the decedent, the property cannot pass to the disclaimant, nor can the disclaimant direct the disposition of the disclaimed interest.
      2. When to disclaim? To be effective, the disclaimer must be made within nine months of a decedent’s date of death.
      3. IRC §2518 provides that if a person makes a “qualified disclaimer” with respect to any interest in property, the interest so disclaimed will be treated as though the interest had never been transferred to the disclaiming party. This approach is consistent with F.S. 739.201(3), which provides that the disclaimant must be treated as a predeceased person with respect to the disclaimed interest. If a disclaimer is being contemplated, the disclaimant should not accept any income, interest, or other benefits from the property that may be disclaimed.
    • PARTIAL DISTRIBUTIONSThese are distributions made to a beneficiary before the final distribution. Fla.Prob.R. 5.380. There are two types, permissive partial distribution governed by Fla.Stat. § 733.612(26) and compulsory partial distribution governed by Fla.Stat. §733.802. Authority for partial distribution is derived from F.S. 733.612(26) (permissive partial distribution) and 733.802 (compulsory partial distribution). See also Fla.Prob.R. 5.380.
      1. Time. A Personal Representative shall not be compelled to make distribution to any beneficiary until the expiration of 5 months from the granting of letters.
      2. Why Make a Partial Distribution? Existence of a wasting assets (i.e, automobile) or to avoid liability for maintaining control with certain high risk assets or those that are a nuisance to keep on hand. For example, Florida adheres to the “dangerous instrumentality” doctrine which provides liability on the estate if the decedent’s automobiles are used at all. Another reason for partial distribution is where the beneficiary needs the asset(s) immediately.
      3. What is the Procedure? Fla.Prob.R. 5.400(b)(5)(A) requires the personal representative’s final accounting and petition for discharge to account for any partial distributions.
        • Compulsory. A beneficiary can compel the personal representative to make a partial distribution. Fla.Stat. §733.802; Fla.Prob.R. 5.380 requires that the beneficiary’s petition allege “that the property will not be required for the payment of debts, family allowance, spouse’s elective share, estate and inheritance taxes, claims, charges, and expenses of administration, or for providing funds for contribution or enforcing equalization in case of advancements.” However, the court may require a bond from a beneficiary receiving the early distribution.
        • Permissive. A beneficiary who has received a voluntary partial distribution from the personal representative may be liable if payment was improper and may be ordered to return the property. Fla.Stat. §733.812.
        • Practical Considerations. It is recommended that a personal representative, in determining the propriety of making a voluntary distribution, consider the following provisions of the Probate Code (from PRACTICE UNDER FLORIDA PROBATE CODE (Fla.Bar CLE 6th ed. 2010), Chapter 13):
          • §733.109(2) provides that, pending the determination of any petition for revocation of probate, “no distribution of property may be made to beneficiaries in contravention of the rights of those who, but for the will, would be entitled to the property.” Thus, if a petition for revocation of probate has been filed or if there is a possibility that one might be filed, no distribution should be made.
          • §733.602(2) provides that a “personal representative shall not be liable for any act of . . . distribution if the act was authorized at the time.” The statute goes on to provide that “[n]othing in this section affects the duty of the personal representative to administer and distribute the estate in accordance with the rights of interested persons.” Notwithstanding the authority to make partial distributions, the personal representative may incur liability if the distribution was not in accordance with the rights of interested persons.
          • §733.609(1) provides that a “personal representative’s fiduciary duty is the same as the fiduciary duty of a trustee of an express trust.” In actions for breach of fiduciary duty or challenging the exercise or failure of the personal representative to exercise its powers, the court may award attorneys’ fees and costs as in chancery actions. Id.
          • §733.805(2) provides that contribution may be required to a devisee whose devise has been sold or used. Before distribution, the court must determine the amounts of the respective contributions, and they must be paid or withheld before distribution is made. If there is any possibility of contribution being required, therefore, this prohibition against distribution should be considered.
    • RELEVANT STATUTORY PROVISIONS AND PROBATE RULES

Probate Rule 5.241. Notice to Creditors

      • Publication and Service. Unless creditors’ claims are otherwise barred by law, the personal representative shall promptly publish a notice to creditors and serve a copy of the notice on all creditors of the decedent who are reasonably ascertainable and, if required by law, on the Agency for Health Care Administration. Service of the notice shall be either by informal notice, or in the manner provided for service of formal notice at the option of the personal representative. Service on one creditor by a chosen method shall not preclude service on another creditor by another method.
      • Contents. The notice to creditors shall contain the name of the decedent, the file number of the estate, the des-ignation and address of the court, the name and address of the personal representative and of the personal repre-sentative’s attorney, and the date of first publication of the notice to creditors. The notice shall require all creditors to file all claims against the estate with the court, within the time provided by law.
      • Method of Publication and Proof. Publication shall be made as required by law. The personal representative shall file proof of publication with the court within 45 days after the date of first publication of the notice to creditors.
      • Statement Regarding Creditors. Within 4 months after the date of the first publication of notice to creditors, the personal representative shall file a verified statement that diligent search has been made to ascertain the name and address of each person having a claim against the estate. The statement shall indicate the name and address of each person at that time known to the personal representative who has or may have a claim against the estate and whether such person was served with the notice to creditors or otherwise received actual notice of the information contained in the notice to creditors; provided that the statement need not include persons who have filed a timely claim or who were included in the personal representative’s proof of claim.
      • Service of Death Certificate. If service of the notice on the Agency for Health Care Administration is required, it shall be accompanied by a death certificate.

Probate Rule 5.380. Compulsory Payment of Devises or Distributive Interests

      • Petition. A beneficiary may file a petition setting forth the facts that entitle the beneficiary to compel payment of devises or distributive interests stating that the property will not be required for the payment of debts, family allowance, spouse’s elective share, estate and inheritance taxes, claims, charges, and expenses of administration, or for providing funds for contribution or enforcing equalization in case of advancements.
      • Order. If the court finds that the property will not be required for the purposes set forth in subdivision (a), it may enter an order describing the property to be surrendered or delivered and compelling the personal representative, prior to the final settlement of the personal representative’s accounts, to do one or more of the following:
        1. Pay all or any part of a devise in money.
        2. Deliver specific personal property within the personal representative’s custody and control.
        3. Pay all or any part of a distributive interest in the personal estate of a decedent.
        4. Surrender real property.
      • Bond. Before the entry of an order of partial distribution, the court may require the person entitled to distribution to give a bond with sureties as prescribed by law.

Probate Rule 5.400. Distribution and Discharge

      • Petition for Discharge; Final Accounting. A personal representative who has completed administration except for distribution shall file a final accounting and a petition for discharge including a plan of distribution.
      • Contents.The petition for discharge shall contain a statement:
        1. that the personal representative has fully administered the estate;
        2. that all claims which were presented have been paid, settled, or otherwise disposed of;
        3. that the personal representative has paid or made provision for taxes and expenses of administration;
        4. showing the amount of compensation paid or to be paid to the personal representative, attorneys, accountants, appraisers, or other agents employed by the personal representative and the manner of determining that compensation;
        5. showing a plan of distribution which shall include:
          • a schedule of all prior distributions;
          • the property remaining in the hands of the personal representative for distribution;
          • a schedule describing the proposed distribution of the remaining assets; and
          • the amount of funds retained by the personal representative to pay expenses that are incurred in the distribution of the remaining assets and termination of the estate administration;
        6. that any objections to the accounting, the compensation paid or proposed to be paid, or the proposed distribution of assets must be filed within 30 days from the date of service of the last of the petition for discharge or final accounting; and also that within 90 days after filing of the objection, a notice of hearing thereon must be served or the objection is abandoned; and
        7. that objections, if any, shall be in writing and shall state with particularity the item or items to which the objection is directed and the grounds on which the objection is based.
      • Closing Estate; Extension. The final accounting and petition for discharge shall be filed and served on interested persons within 12 months after issuance of letters for estates not required to file a federal estate tax return, otherwise within 12 months from the date the return is due, unless the time is extended by the court for cause shown after notice to interested persons. The petition to extend time shall state the status of the estate and the reason for the extension.
      • Distribution. The personal representative shall promptly distribute the estate property in accordance with the plan of distribution, unless objections are filed as provided in these rules.
      • Discharge. On receipt of evidence that the estate has been fully administered and properly distributed, the court shall enter an order discharging the personal representative and releasing the surety on any bond.

Probate Rule 5.496. Form and Manner of Objecting to Claim

      • Filing. An objection to a claim, other than a personal representative’s proof of claim, shall be in writing and filed on or before the expiration of 4 months from the first publication of notice to creditors or within 30 days from the timely filing or amendment of the claim, whichever occurs later.
      • Service. A personal representative or other interested person who files an objection to the claim shall serve a copy of the objection on the claimant within 10 days after the filing of the objection. The objection shall include a certificate of service. If the objection is filed by an interested person other than the personal representative, a copy of the objection shall also be served on the personal representative within 10 days after the filing of the objection.
      • Notice to Claimant. An objection shall contain a statement that the claimant is limited to a period of 30 days from the date of service of an objection within which to bring an action as provided by law.

Probate Rule 5.499. Form and Manner of Objecting to Personal Representative’s Proof of Claim

      • Filing. An objection to a personal representative’s proof of claim shall be in writing and filed on or before the expiration of 4 months from the first publication of notice to creditors or within 30 days from the timely filing of the proof of claim, whichever occurs later.
      • Contents. The objection shall identify the particular item or items to which objection is made. An objection to an item listed on the proof of claim as to be paid shall also contain a statement that the claimant is limited to a period of 30 days from the date of service of an objection within which to bring an independent action as provided by law.
      • Items Listed as Paid. If an objection is filed to an item listed on the proof of claim as paid, it shall not be necessary for the claimant to file an independent action as to that item. Liability as between estate and the personal representative individually for claims listed on the proof of claim as paid, or for claims treated as if they were listed on the proof of claim as paid, shall be determined in the estate administration, in a proceeding for accounting or surcharge, or in another appropriate proceeding, whether or not an objection has been filed.
      • Items Paid Before Objection. If an item listed as to be paid is paid by the personal representative prior to the filing of an objection as to that item, the item shall be treated as if it were listed on the proof of claim as paid.
      • Service. The objector shall serve a copy of the objection on the personal representative and, in the case of any objection to an item listed as to be paid, shall also serve a copy on that claimant within 10 days after the filing of the objection. In the case of an objection to an item listed as to be paid, the objection shall include a certificate of service.

§733.106. Costs and attorney’s fees

      1. In all probate proceedings costs may be awarded as in chancery actions.
      2. A person nominated as personal representative, or any proponent of a will if the person so nominated does not act within a reasonable time, if in good faith justified in offering the will in due form for probate, shall receive costs and attorney’s fees from the estate even though probate is denied or revoked.
      3. Any attorney who has rendered services to an estate may be awarded reasonable compensation from the estate.
      4. When costs and attorney’s fees are to be paid from the estate, the court may direct from what part of the estate they shall be paid.

§733.2121. Notice to creditors; filing of claims

      1. Unless creditors’ claims are otherwise barred by s. 733.710, the personal representative shall promptly publish a notice to creditors. The notice shall contain the name of the decedent, the file number of the estate, the designation and address of the court in which the proceedings are pending, the name and address of the personal representative, the name and address of the personal representative’s attorney, and the date of first publication. The notice shall state that creditors must file claims against the estate with the court during the time periods set forth in s. 733.702, or be forever barred.
      2. Publication shall be once a week for 2 consecutive weeks, in a newspaper published in the county where the estate is administered or, if there is no newspaper published in the county, in a newspaper of general circulation in that county.
        • The personal representative shall promptly make a diligent search to determine the names and addresses of creditors of the decedent who are reasonably ascertainable, even if the claims are unmatured, contingent, or unliquidated, and shall promptly serve a copy of the notice on those creditors. Impracticable and extended searches are not required. Service is not required on any creditor who has filed a claim as provided in this part, whose claim has been paid in full, or whose claim is listed in a personal representative’s timely filed proof of claim.
        • The personal representative is not individually liable to any person for giving notice under this section, even if it is later determined that notice was not required. The service of notice to creditors in accordance with this section shall not be construed as admitting the validity or enforceability of a claim.
        • If the personal representative in good faith fails to give notice required by this section, the personal representative is not liable to any person for the failure. Liability, if any, for the failure is on the estate.
        • If a decedent at the time of death was 55 years of age or older, the personal representative shall promptly serve a copy of the notice to creditors and provide a copy of the death certificate on the Agency for Health Care Administration within 3 months after the first publication of the notice to creditors, unless the agency has already filed a statement of claim in the estate proceedings.
        • If the Department of Revenue has not previously been served with a copy of the notice to creditors, then service of the inventory on the Department of Revenue shall be the equivalent of service of a copy of the notice to creditors.
      3. Claims are barred as provided in ss. 733.702 and 733.710

§733.602. General duties

      1. A personal representative is a fiduciary who shall observe the standards of care applicable to trustees. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent’s will and this code as expeditiously and efficiently as is consistent with the best interests of the estate. A personal representative shall use the authority conferred by this code, the authority in the will, if any, and the authority of any order of the court, for the best interests of interested persons, including creditors.
      2. A personal representative shall not be liable for any act of administration or distribution if the act was authorized at the time. Subject to other obligations of administration, a probated will is authority to administer and distribute the estate according to its terms. An order of appointment of a personal representative is authority to distribute apparently intestate assets to the heirs of the decedent if, at the time of distribution, the personal representative is not aware of a proceeding challenging intestacy or a proceeding questioning the appointment or fitness to continue. Nothing in this section affects the duty of the personal representative to administer and distribute the estate in accordance with the rights of interested persons.

§733.609. Improper exercise of power; breach of fiduciary duty

      1. A personal representative’s fiduciary duty is the same as the fiduciary duty of a trustee of an express trust, and a personal representative is liable to interested persons for damage or loss resulting from the breach of this duty. In all actions for breach of fiduciary duty or challenging the exercise of or failure to exercise a personal representative’s powers, the court shall award taxable costs as in chancery actions, including attorney’s fees.
      2. When awarding taxable costs, including attorney’s fees, under this section, the court in its discretion may direct payment from a party’s interest, if any, in the estate or enter a judgment which may be satisfied from other property of the party, or both.
      3. This section shall apply to all proceedings commenced hereunder after the effective date, without regard to the date of the decedent’s death.

§733.612. Transactions authorized for the personal representative; exceptions Except as otherwise provided by the will or court order, and subject to the priorities stated in s. 733.805, without court order, a personal representative, acting reasonably for the benefit of the interested persons, may properly:

      1. Retain assets owned by the decedent, pending distribution or liquidation, including those in which the personal representative is personally interested or that are otherwise improper for fiduciary investments.
      2. Perform or compromise, or, when proper, refuse to perform, the decedent’s contracts. In performing the decedent’s enforceable contracts to convey or lease real property, among other possible courses of action, the personal repre-sentative may:
        • Convey the real property for cash payment of all sums remaining due or for the purchaser’s note for the sum remaining due, secured by a mortgage on the property.
        • Deliver a deed in escrow, with directions that the proceeds, when paid in accordance with the escrow agreement, be paid as provided in the escrow agreement.
      3. Receive assets from fiduciaries or other sources.
      4. Invest funds as provided in ss. 518.10-518.14, considering the amount to be invested, liquidity needs of the estate, and the time until distribution will be made.
      5. Acquire or dispose of an asset, excluding real property in this or another state, for cash or on credit and at public or private sale, and manage, develop, improve, exchange, partition, or change the character of an estate asset.
      6. Make ordinary or extraordinary repairs or alterations in buildings or other structures; demolish improvements; or erect new party walls or buildings.
      7. Enter into a lease, as lessor or lessee, for a term within, or extending beyond, the period of administration, with or without an option to renew.
      8. Enter into a lease or arrangement for exploration and removal of minerals or other natural resources or enter into a pooling or unitization agreement.
      9. Abandon property when it is valueless or so encumbered, or in a condition, that it is of no benefit to the estate.
      10. Vote, or refrain from voting, stocks or other securities in person or by general or limited proxy.
      11. Pay calls, assessments, and other sums chargeable or accruing against, or on account of, securities, unless barred by the provisions relating to claims.
      12. Hold property in the name of a nominee or in other form without disclosure of the interest of the estate, but the personal representative is liable for any act of the nominee in connection with the property so held.
      13. Insure the assets of the estate against damage or loss and insure against personal and fiduciary liability to third persons.
      14. Borrow money, with or without security, to be repaid from the estate assets or otherwise, other than real property, and advance money for the protection of the estate.
      15. Extend, renew, or in any manner modify any obligation owing to the estate. If the personal representative holds a mortgage, security interest, or other lien upon property of another person, he or she may accept a conveyance or transfer of encumbered assets from the owner in satisfaction of the indebtedness secured by its lien instead of fore-closure.
      16. Pay taxes, assessments, and other expenses incident to the administration of the estate.
      17. Sell or exercise stock subscription or conversion rights or consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise.
      18. Allocate items of income or expense to either estate income or principal, as permitted or provided by law.
      19. Employ persons, including, but not limited to, attorneys, accountants, auditors, appraisers, investment advisers, and others, even if they are one and the same as the personal representative or are associated with the personal representative, to advise or assist the personal representative in the performance of administrative duties; act upon the recommendations of those employed persons without independent investigation; and, instead of acting personally, employ one or more agents to perform any act of administration, whether or not discretionary. Any fees and com-pensation paid to a person who is the same as, associated with, or employed by, the personal representative shall be taken into consideration in determining the personal representative’s compensation.
      20. Prosecute or defend claims or proceedings in any jurisdiction for the protection of the estate and of the personal representative.
      21. Sell, mortgage, or lease any personal property of the estate or any interest in it for cash, credit, or for part cash or part credit, and with or without security for the unpaid balance.
      22. Continue any unincorporated business or venture in which the decedent was engaged at the time of death:
        • In the same business form for a period of not more than 4 months from the date of appointment, if continuation is a reasonable means of preserving the value of the business, including good will.
        • IOn the same business form for any additional period of time that may be approved by court order.
      23. Provide for exoneration of the personal representative from personal liability in any contract entered into on behalf of the estate.
      24. Satisfy and settle claims and distribute the estate as provided in this code.
      25. Enter into agreements with the proper officer or department head, commissioner, or agent of any department of the government of the United States, waiving the statute of limitations concerning the assessment and collection of any federal tax or any deficiency in a federal tax.
      26. Make partial distribution to the beneficiaries of any part of the estate not necessary to satisfy claims, expenses of administration, taxes, family allowance, exempt property, and an elective share, in accordance with the decedent’s will or as authorized by operation of law.
      27. Execute any instruments necessary in the exercise of the personal representative’s powers.

§733.702. Limitations on presentation of claims

      1. If not barred by s. 733.710, no claim or demand against the decedent’s estate that arose before the death of the decedent, including claims of the state and any of its political subdivisions, even if the claims are unmatured, con-tingent, or unliquidated; no claim for funeral or burial expenses; no claim for personal property in the possession of the personal representative; and no claim for damages, including, but not limited to, an action founded on fraud or another wrongful act or omission of the decedent, is binding on the estate, on the personal representative, or on any beneficiary unless filed in the probate proceeding on or before the later of the date that is 3 months after the time of the first publication of the notice to creditors or, as to any creditor required to be served with a copy of the notice to creditors, 30 days after the date of service on the creditor, even though the personal representative has recognized the claim or demand by paying a part of it or interest on it or otherwise. The personal representative may settle in full any claim without the necessity of the claim being filed when the settlement has been approved by the interested persons.
      2. No cause of action, including, but not limited to, an action founded upon fraud or other wrongful act or omission, shall survive the death of the person against whom the claim may be made, whether or not an action is pending at the death of the person, unless a claim is filed within the time periods set forth in this part.
      3. Any claim not timely filed as provided in this section is barred even though no objection to the claim is filed unless the court extends the time in which the claim may be filed. An extension may be granted only upon grounds of fraud, estoppel, or insufficient notice of the claims period. No independent action or declaratory action may be brought upon a claim which was not timely filed unless an extension has been granted by the court. If the personal representative or any other interested person serves on the creditor a notice to file a petition for an extension, the creditor shall be limited to a period of 30 days from the date of service of the notice in which to file a petition for extension.
      4. Nothing in this section affects or prevents:
        • A proceeding to enforce any mortgage, security interest, or other lien on property of the decedent.
        • To the limits of casualty insurance protection only, any proceeding to establish liability that is protected by the casualty insurance.
        • The filing of a cross-claim or counterclaim against the estate in an action instituted by the estate; however, no recovery on a cross-claim or counterclaim shall exceed the estate’s recovery in that action.
      5. Nothing in this section shall extend the limitations period set forth in s. 733.710.

733.707. Order of payment of expenses and obligations

      1. The personal representative shall pay the expenses of the administration and obligations of the decedent’s estate in the following order:
        • Class 1.–Costs, expenses of administration, and compensation of personal representatives and their attorneys fees and attorneys fees awarded under s. 733.106(3).
        • Class 2.–Reasonable funeral, interment, and grave marker expenses, whether paid by a guardian, the personal representative, or any other person, not to exceed the aggregate of $6,000.
        • Class 3.–Debts and taxes with preference under federal law, and claims pursuant to ss. 409.9101 and 414.28.
        • Class 4.–Reasonable and necessary medical and hospital expenses of the last 60 days of the last illness of the decedent, including compensation of persons attending the decedent.
        • Class 5.–Family allowance.
        • Class 6.–Arrearage from court-ordered child support.
        • Class 7.–Debts acquired after death by the continuation of the decedent’s business, in accordance with s. 733.612(22), but only to the extent of the assets of that business.
        • Class 8.–All other claims, including those founded on judgments or decrees rendered against the decedent during the decedent’s lifetime, and any excess over the sums allowed in paragraphs (b) and (d).
      2. After paying any preceding class, if the estate is insufficient to pay all of the next succeeding class, the creditors of the latter class shall be paid ratably in proportion to their respective claims.
      3. Any portion of a trust with respect to which a decedent who is the grantor has at the decedent’s death a right of revocation, as defined in paragraph (e), either alone or in conjunction with any other person, is liable for the expenses of the administration and obligations of the decedent’s estate to the extent the decedent’s estate is insufficient to pay them as provided in ss. 733.607(2) and 736.05053.
        • For purposes of this subsection, any trusts established as part of, and all payments from, either an employee annuity described in s. 403 of the Internal Revenue Code of 1986, as amended, an Individual Retirement Account, as described in s. 408 of the Internal Revenue Code of 1986, as amended, a Keogh (HR-10) Plan, or a retirement or other plan established by a corporation which is qualified under s. 401 of the Internal Revenue Code of 1986, as amended, shall not be considered a trust over which the decedent has a right of revocation.
        • For purposes of this subsection, any trust described in s. 664 of the Internal Revenue Code of 1986, as amended, shall not be considered a trust over which the decedent has a right of revocation.
        • This subsection shall not impair any rights an individual has under a qualified domestic relations order as that term is defined in s. 414(p) of the Internal Revenue Code of 1986, [FN5] as amended.
        • For purposes of this subsection, property held or received by a trust to the extent that the property would not have been subject to claims against the decedent’s estate if it had been paid directly to a trust created under the decedent’s will or other than to the decedent’s estate, or assets received from any trust other than a trust described in this sub-section, shall not be deemed assets of the trust available to the decedent’s estate.
        • For purposes of this subsection, a “right of revocation” is a power retained by the decedent, held in any capacity, to:
          1. Amend or revoke the trust and revest the principal of the trust in the decedent; or
          2. Withdraw or appoint the principal of the trust to or for the decedent’s benefit.

§733.710. Limitations on claims against estates

      1. 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 beneficiaries 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.
      2. This section shall not apply to a creditor who has filed a claim pursuant to s. 733.702 within 2 years after the person’s death, and whose claim has not been paid or otherwise disposed of pursuant to s. 733.705.
      3. This section shall not affect the lien of any duly recorded mortgage or security interest or the lien of any person in possession of personal property or the right to foreclose and enforce the mortgage or lien.

§733.802. Proceedings for compulsory payment of devises or distributive interest

      1. Before final distribution, no personal representative shall be compelled:
        • To pay a devise in money before the final settlement of the personal representative’s accounts,
        • To deliver specific personal property devised, unless the personal property is exempt personal property,
        • To pay all or any part of a distributive share in the personal estate of a decedent, or
        • To surrender land to any beneficiary,

unless the beneficiary establishes that the property will not be required for the payment of debts, family allowance, estate and inheritance taxes, claims, elective share of the surviving spouse, charges, or expenses of administration or to provide funds for contribution or to enforce equalization in case of advancements.

      1. An order directing the surrender of real property or the delivery of personal property by the personal representative to the beneficiary shall be conclusive in favor of bona fide purchasers for value from the beneficiary or distributee as against the personal representative and all other persons claiming by, through, under, or against the decedent or the decedent’s estate.
      2. If the administration of the estate has not been completed before the entry of an order of partial distribution, the court may require the person entitled to distribution to give a bond with sureties as prescribed in s. 45.011, conditioned on the making of due contribution for the payment of devises, family allowance, estate and inheritance taxes, claims, elective share of the spouse, charges, expenses of administration, and equalization in case of advancements, plus any interest on them.

§733.903. Subsequent administration The final settlement of an estate and the discharge of the personal representative shall not prevent further administration. The order of discharge may not be revoked based upon the discovery of a will or later will. §739.201. Disclaimer of interest in property Except for a disclaimer governed by s. 739.202, s. 739.203, or s. 739.204, the following rules apply to a disclaimer of an interest in property:

      1. The disclaimer takes effect as of the time the instrument creating the interest becomes irrevocable or, if the interest arose under the law of intestate succession, as of the time of the intestate’s death.
      2. The disclaimed interest passes according to any provision in the instrument creating the interest providing explicitly for the disposition of the interest, should it be disclaimed, or of disclaimed interests in general.
      3. If the instrument does not contain a provision described in subsection (2), the following rules apply:
        • If the disclaimant is an individual, the disclaimed interest passes as if the disclaimant had died immediately before the interest was created, unless under the governing instrument or other applicable law the disclaimed interest is contingent on surviving to the time of distribution, in which case the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution. However, if, by law or under the governing instrument, the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the dis-claimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution. For purposes of this subsection, a disclaimed interest is created at the death of the benefactor or such earlier time, if any, that the benefactor’s transfer of the interest is a completed gift for federal gift tax purposes. Also for purposes of this subsection, a disclaimed interest in a trust described in s. 733.707(3) shall pass as if the interest had been created under a will.
        • If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.
        • Upon the disclaimer of a preceding interest, a future interest held by a person other than the disclaimant takes effect as if the disclaimant had died or ceased to exist immediately before the time of distribution, but a future interest held by the disclaimant is not accelerated in possession or enjoyment as a result of the disclaimer.
      4. In the case of a disclaimer of property over which the disclaimant has a power, in a fiduciary or nonfiduciary capacity, to direct the beneficial enjoyment of the disclaimed property, unless the disclaimer specifically provides to the contrary with reference to this subsection, the disclaimant shall also be deemed to have disclaimed that power unless the power is limited by an ascertainable standard, as defined in s. 736.0103, as in effect when the disclaimer becomes irrevocable.

26 U.S.C. § 2518. Disclaimers

    • General rule.–For purposes of this subtitle, if a person makes a qualified disclaimer with respect to any interest in property, this subtitle shall apply with respect to such interest as if the interest had never been transferred to such person.
    • Qualified disclaimer defined.–For purposes of subsection (a), the term “qualified disclaimer” means an irrev-ocable and unqualified refusal by a person to accept an interest in property but only if–
      1. such refusal is in writing,
      2. such writing is received by the transferor of the interest, his legal representative, or the holder of the legal title to the property to which the interest relates not later than the date which is 9 months after the later of–
        • the day on which the transfer creating the interest in such person is made, or
        • the day on which such person attains age 21,
      3. such person has not accepted the interest or any of its benefits, and
      4. as a result of such refusal, the interest passes without any direction on the part of the person making the dis-claimer and passes either–
        • to the spouse of the decedent, or
        • to a person other than the person making the disclaimer.
    • (c) Other rules.–For purposes of subsection (a)–
      1. Disclaimer of undivided portion of interest.–A disclaimer with respect to an undivided portion of an interest which meets the requirements of the preceding sentence shall be treated as a qualified disclaimer of such portion of the interest.
      2. Powers.–A power with respect to property shall be treated as an interest in such property.
      3. Certain transfers treated as disclaimers.–A written transfer of the transferor’s entire interest in the property–
        • which meets requirements similar to the requirements of paragraphs (2) and (3) of subsection (b), and
        • which is to a person or persons who would have received the property had the transferor made a qualified disclaimer (within the meaning of subsection (b)), shall be treated as a qualified disclaimer.

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