As I counsel clients throughout the Orlando area, I often find that people do not have a clear understanding of probate law, and why it matters when it comes to estate planning in Florida.
What is Probate?
Probate is a legal process that ensures that a deceased person’s assets are properly identified, that the property of his or her estate is carefully administered, that all debts and taxes are paid, and that any remaining estate assets are distributed in a fair, lawful, and orderly manner to any heirs or beneficiaries.
Probate is always overseen by a judge in a state court. While the process is generally similar in most jurisdictions, each state has somewhat different rules and statutes that regulate its probate proceedings. By and large, the probate process will depend on whether the decedent’s state has adopted all or part of the Uniform Probate Code (UPC), which is a set of probate laws originally written by legal experts in 1969, and subsequently updated several times since then. If you are anticipating taking part in a probate procedure, you should carefully determine what laws apply in the state and county where the decedent last lived, or, in some cases, where his or her real property exists.
How the Probate Process Works
It bears repeating that every probate court has its own particular rules about what documents it requires, what they must contain, and when they must be filed. However, the following is a general outline of how the process works in states, such as Florida, that have adopted the UPC in its entirety and regulate their probate procedures, more or less, according to the Code. Under the UPC, there are three kinds of probate: informal, unsupervised formal, and supervised formal.
Informal probate is the norm in UPC states. It is a fairly straightforward process and is used when a decedent’s inheritors are not contesting a will and there are no anticipated challenges by creditors. There are no formal court hearings and everything is done via paperwork. Informal Probate is used to settle small estates and uncomplicated larger ones.
The process begins when someone – usually a close friend or family member – comes forward with the decedent’s death certificate and will, and petitions the court to “admit the will to probate” by establishing its validity, and asks to serve as the estate’s “personal representative.” (In non UPC states, this person is called the “executor” or the “administrator.”) In many cases, this individual is the decedent’s surviving spouse or adult child, who is named in the will to take on this responsibility. Once the application is approved by the probate court, and the will is determined to be valid, the personal representative is given official authority via “letters of testamentary,” to act on behalf of the estate.
The personal representative must now perform several tasks, including: sending out written notices to any probable heirs, beneficiaries, and known creditors of the decedent; publishing a notice in a local newspaper of the decedent’s demise and the probate proceedings; preparing an inventory and appraisal of the decedent’s assets that are subject to probate (generally, probate assets are those that were owned alone by the decedent, and non-probate assets are those that were either owned jointly with others, will pass automatically upon a person’s death to a named beneficiary, such as a life insurance policy, or were held in some type of trust); managing, protecting and preserving all estate property during the probate process and accounting for any monies owed to the decedent’s estate; paying all taxes and debts, including funeral expenses and court costs; and distributing any remaining estate assets to heirs or beneficiaries according to the dictates of the decedent’s will, and/or the laws of the state where the probate is being administered.
The personal representative may hire an attorney, an accountant, an appraiser or any other professional he or she deems necessary to help manage the estate, settle claims, or otherwise offer advice on how to invest and/or protect estate assets. The costs of these services can come from the decedent’s probate assets before any other claims will be addressed. In addition, the personal representative may also deduct a reasonable fee from the estate’s assets for performing the role, especially if there is little chance that he or she will be a beneficiary of the estate.
Once the preceding is accomplished to the court’s satisfaction, the personal representative can “close” the estate by submitting a “final accounting,” testifying that all debts and taxes have been paid and that the decedent’s property has been fairly distributed to heirs or beneficiaries.
Unsupervised Formal Probate
Unsupervised formal probate in UPC states follows a similar process as Informal Probate, but in addition to the necessary paperwork, there is a traditional court proceeding, as well. It is used whenever there is a disagreement over the choice of a personal representative; or if there is no valid will and the decedent’s heirs need to be determined by a probate court judge according to the state’s laws of inheritance; or the inheritors are minor children who may be receiving significant property.
Supervised Formal Probate
This form of probate is only used if the court finds it necessary to supervise the entire probate procedure. This can occur if the decedent has left behind a very complex web of liabilities and there are many creditors petitioning the court for payment; or if a vulnerable beneficiary needs to be protected from other heirs who are challenging the specifications in a will; or if the decedent left behind several wills and the court needs to decide which one will receive the force of law; or if an estate is so large and complicated that a probate procedure will drag on for years with many lawyers representing many disparate parties.
Remember, the above summary is merely a rough guideline of what one can expect when dealing with probate in Florida and similar states that have adopted the UPC. Each state and, in some states, even each county, has its own set of probate procedures. While there are many similarities among various jurisdictions, it is absolutely crucial to work with an experienced probate attorney before initiating the probate process. Dealing with the emotions of losing a loved one is difficult enough; trying to navigate the probate laws without professional counsel is simply not a prudent course of action.
While the probate process is often portrayed as an ordeal, if there is no conflict or controversy, it can be a relatively straightforward and smooth process. However, it can also be time consuming, emotionally draining, and costly. Lawyers must be paid and there are mandatory court expenses that must be covered. Therefore, a sound estate plan will often incorporate strategies that can help avoid probate altogether, or at least minimize the assets that are subject to the probate process.
Working with a competent and trustworthy estate planner is the best way to protect your assets from probate and ensure that more of your wealth will be transferred to those heirs and beneficiaries that you specify in your will.