What Is Probate?
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Probate is a strange word and does not give a modern reader much in the way of clues as to what it all means. To start, the word “probate” is derived from the Latin word “probatum,” which means “a thing proved.” Probate originally meant the judicial process of proving that a decedent’s Last Will & Testament was real. Today, it still means that, however, it encompasses much more than merely proving a will is valid.
Probate is considered an “in rem” judicial process, which means the court has jurisdiction over the property in question. Accordingly, probate is conducted in the state and county in which the decedent died or in the county in which the decedent owned real property (for non-residents of the State of Florida).
So, what is probate? Probate is the court-supervised process of identifying and gathering the assets of a decedent, paying the decedent’s debts, and distributing the balance to the decedent’s beneficiaries. Probate may also be “domiciliary” or “ancillary.” Domiciliary probate administration is probate of assets owned by a Florida resident that has an actual situs in Florida. Ancillary probate administration is probate of assets owned by a decedent who is not a Florida resident that has an actual situs in Florida.
An example of when ancillary probate is required would be if a New York resident owns a condominium in their sole name that is located in the State of Florida. In order to open ancillary administration in Florida, probate needs to be opened in the state of the decedent’s residence regardless of whether there are assets subject to probate in that state.
Does Every Estate Require Probate?
Not all estates are required to go through probate. Probate administration only applies to probate assets, which are the assets that were owned by the decedent at the time of death. If the asset had a joint tenant with a survivorship interest or a designated beneficiary, such as a pay on death account or a designated beneficiary on a life insurance or retirement account, then the asset will not be subject to probate administration.
Why Is Probate Necessary for Certain Types of Assets?
If the decedent is the only person with an ownership interest in an asset, then after their death there is nobody who can dispose of those assets, which means probate is necessary to settle the matter. For example, if the decedent has a checking account with $50,000 in it and they are the only owner, and the account does not pay on death to anybody. Upon the decedent’s death, nobody would have the legal authority to sign the checks. The probate process exists to deal with these sole-named assets, whether they are bank accounts, stocks, real estate, etc.
What If the Decedent Did Not Have Any Probate Assets?
If a person dies without assets in their name, then probate is not necessary, and the Will will not have any effect on the distribution of their estate. This is often something that most people do not understand. For example, a father might make a will leaving his entire estate in equal shares to his three children but then add the child who lives nearby to the bank accounts “for convenience purposes.” Usually, this means that the account is made “joint” with that child and passes directly to that child outside of probate, thereby inadvertently cutting out the other two children the father clearly intended to benefit.
What Do Testate & Intestate Mean?
In Florida, the person who makes a Last Will & Testament is called a “testator” or “testatrix.” The term “testate” means that a decedent died with a valid Last Will & Testament. In Florida, the requirements for execution of a Will are outlined in Florida Statute §732.502. Every Will must be in writing and the testator must sign the Will at the end. The Will must be witnessed by two people who must also sign the Will in the presence of the testator and in the presence of each other. These are the minimum requirements that must be complied with for a Will to be valid in the State of Florida. If any of these formalities are not strictly followed, then the Will is invalid.
Who Oversees a Probate Estate?
Circuit court judges preside over probate proceedings in the state of Florida. A judge will appoint a personal representative, issue a ruling on the validity of a decedent’s Will, determine the rightful beneficiaries, and supervise the payment of valid creditor claims.
What Are Letters of Administration?
Once the judge has determined that a person or an institution is qualified to serve as the personal representative of a decedent’s estate, the judge will then sign Letters of Administration. This is a document that gives the court-appointed personal representative the legal authority to administer the decedent’s probate estate.
Who Is Qualified to Serve as a Personal Representative?
Though there are some limitations, Florida law states that “any person who is sui juris (meaning legally competent) and is a resident of Florida at the time of the death of the person whose estate is to be administered is qualified to act as personal representative in Florida” (Fla. Stat. §733.302). However, even if a person meets those requirements, they might be disqualified if they have been convicted of a felony, are mentally or physically unable to perform duties, or are under the age of 18. Conversely, a non-resident might be qualified if that person is a legally adopted child or adoptive parent of the decedent, related by blood to the decedent, or the spouse of one someone who meets one of those two criteria (Fla. Stat. §733.304).
Should a Personal Representative Be Represented by an Attorney?
Yes, the personal representative should be represented by an attorney. Even seemingly simple probates or small estates can have complicated legal issues arise that will be unfamiliar to a non-attorney.
How Are Creditor Claims Handled?
The personal representative must serve a document called a Notice to Creditors on all known or reasonably ascertainable creditors. Additionally, the personal representative must publish the Notice to Creditors in a local newspaper for a certain length of time. Creditors have a certain amount of time after being served or the notice being published to file a claim in the probate proceeding. The personal representative then has a duty to handle the claims. If there is a legitimate basis for objecting to the creditor's claim, then the personal representative may file an objection and the creditor will have to file an independent lawsuit in order to bring the claim.
The legitimate debts of the decedent must be paid before making distributions to the beneficiaries of the estate. The personal representative must file a report with the court if any claims are not being paid or disposed of properly. A personal representative is free to contact the creditors to negotiate the claims; however, the creditor has little incentive to do this if the estate has ample funds to satisfy the claim. Sometimes estates are insolvent, and creditors must accept less than they are owed. Certain creditors take priority over other creditors. For example, funeral expenses take priority over credit card debt.
What Is a Probate Inventory?
A probate inventory is a list of the decedent’s probate assets which should reflect their values on the decedent’s date of death. The probate inventory is the starting point for an estate accounting. For a comprehensive list of documents you should deliver to your probate attorney, please click here.
What Rights Do Family Have in a Decedent’s Estate?
Florida law protects the decedent’s surviving spouse from being disinherited. The surviving spouse has a right to receive, at a minimum, an elective share. For more information about elective share, please click here. Additionally, certain surviving children are protected against total disinheritance. This protected group includes minors and dependents. Generally, an adult child of a decedent who is without any disability is not guaranteed any inheritance and might be excluded as a beneficiary from a decedent’s estate. Family Allowance, Elective Share, and Homestead are all protected property rights that benefit a decedent’s surviving spouse and certain children.
What Is a Pretermitted Spouse or a Pretermitted Child?
If the decedent dies with a Will but made it before getting married or having children, the law in Florida presumes that the decedent would have intended to make a new Will that included the spouse and/or child and gives that individual the share they would have received if the decedent had died intestate.
How Long Is the Probate Process?
There is no easy answer to that question. Depending on the complexity (which has nothing to do with the size of the estate), it can take anywhere from six months to many years. In South Florida, where the courts are backlogged, the average time it takes to probate an estate is probably in the 6-18 month range.
What If the Decedent Had a Revocable Living Trust?
If the decedent had a revocable trust, also called a “living trust,” then the assets owned by that trust are controlled by the trustee. The trustee is to a trust what the personal representative is to a probate estate. They are both fiduciaries who owe a duty to the beneficiaries and who are accountable for their actions. Ideally, if a decedent has gone to the time and expense of creating a revocable trust, then they should transfer assets to the trust during their lifetime.
For example, a brokerage account with $500,000 in it should be registered to “John Doe, Trustee of the John Doe Trust.” If the decedent did this properly, then that asset is not subject to probate at the time of death and should be administered and distributed according to the terms of the trust. However, sometimes the decedent creates a trust and never puts any assets into it. If the decedent also had a pour-over clause in their Will, then the personal representative will treat the decedent’s trust as the beneficiary of the probate estate. This means a personal representative distributes the estate to the trustee and the trustee then administers or distributes the trust assets according to the terms of the trust.
Do I Have to Report Assets to the IRS That Are Not Subject to Probate?
Currently, most people are not required to file a Federal Estate Tax Return because an individual’s gross estate needs to exceed $5,000,000 before one is due. People often mistakenly believe that only probate assets are required to be counted to determine whether a Federal Estate Tax Return is due, but that is incorrect. The term “gross estate” is defined by the Internal Revenue Code and includes all assets in which the decedent had an ownership interest, wherever situate. For more information about Federal Estate Tax Returns, please click here.
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