Wednesday, April 21, 2010

Understanding Probate and Wills in FL

What is probate? Probate is a legal process that moves assets of a deceased person (decedent) out of an estate and into the hands of family or friends. The probate process also ensures that creditors of an estate are paid from the estate assets.

Types of probate

Under Florida law, there are two types of probate:
  1. Formal administration: Required whenever the estate of the decedent is valued at more than $75,000, while excluding creditor exempt property such as a homestead exemption. The circuit court requires an accounting of all of the assets and debts of the decedent. As a result of the court’s involvement, formal administration may take longer than other options. However, the beneficiaries of an estate under formal administration are not liable for the debts of the estate. Before any distribution is made, all or substantially all of the creditors will have been paid.
  2. Summary administration: Generally available only in cases where the value of the estate is less than $75,000, while excluding creditor exempt property. Additionally, for summary administration to be available, creditors of the estate must agree to the administration or have been fully paid. Because this method is faster, it may seem to be ideal. However, an executor of any estate should consider that any beneficiary who receives assets is liable for any debts that haven’t been paid by the estate and this liability can last for up to 2 years. This means that although the estate may believe it has paid all of the creditors, within 2 years a beneficiary can be asked to pay a debt that the estate missed.
A third option of Disposition Without Administration is also available but would not be classified as probate in FL. This option exists where all property of the estate is considered to be exempt and the total value is not more than funeral expenses (capped at $6,000) plus the decedent’s medical bills for his or her last illness.

The final piece to the probate puzzle involves the type of property subject to probate. Property that is solely in the name of the decedent on the date of his or her death will be subject to probate. For example, a bank account that is in only the name of the decedent would be subject to probate. In the alternative, a bank account that is jointly owned by the decedent and someone else, will automatically transfer to that other person without having to go through the probate process. You need a skilled, experienced attorney to handle probate and wills in FL.

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