Those estates that are subject to the Formal Administration process outlined in the Florida Probate Code and Florida Probate Rules. A Formal Administration is generally initiated in the county where the Decedent was domiciled on his or her date of death. Any person with an interest in the Estate may petition the Court for a Formal Administration, and the Court will appoint a “Personal Representative” to handle the administration process.
Who Will Serve as Personal Representative?
If the Decedent died “testate,” (meaning died having executed a valid Last Will and Testament), the person nominated in the Will to serve as Personal Representative is generally entitled to serve as Personal Representative.
Making the determination of who will serve as Personal Representative is trickier where the Decedent died “intestate,” (meaning died without a Will). When there is no will, the surviving spouse of the Decedent is first in line of priority to serve as Personal Representative, according to the Florida Probate Code. If the Decedent died without a surviving spouse, the heirs of the Estate are charged with voting for a Personal Representative. The person who receives a majority vote, (determined by a majority in interest in the Estate, as opposed to a majority in number of the heirs), will generally be appointed as Personal Representative. If the heirs cannot reach a decision in nominating a Personal Representative, then the heir nearest in degree to the Decedent is entitled to preference in appointment.
A person cannot serve as Personal Representative if that person: (1) has been convicted of a felony; (2) is mentally or physically unable to perform the duties; or (3) is under the age of 18 years.
Creditors
Once the Court appoints the Personal Representative, he or she must publish a “Notice to Creditors” in a newspaper published in the county where the Estate is being administered. In addition to the published notice, the Personal Representative must serve the Notice to Creditors directly on all known or readily ascertainable creditors. The purpose of this requirement is to put all creditors of the Decedent on notice that an estate proceeding has been initiated, and that each creditor has a limited time frame within which to file a claim against the Estate. Specifically, if a creditor does not file a claim in the probate proceeding within 3 months from the time of the first publication of Notice to Creditors, or within 30 days from direct service of a Notice to Creditors, whichever occurs later, that creditor’s claim is forever barred. In addition to this limitation, the Florida Probate Code also prohibits any claims that are filed more than 2 years after the Decedent’s date of death.
It is the Personal Representative’s responsibility to compromise or pay all valid, timely filed claims against the Estate. The Estate is only liable to the payment of claims to the extent that the Estate is sufficient to satisfy such claims. In other words, the Personal Representative is not personally liable to creditors for claims filed against the Estate.
Taxes
The Personal Representative is responsible for ensuring that all necessary tax returns are filed, and any tax owed is paid. This will generally include the Decedent’s final income tax return for income earned in the year the Decedent passed away, as well as a separate tax return for any income earned by the Estate during the pendency of the Formal Administration proceeding.
Some estates will be subject to the Federal Estate Tax. In 2015, only estates worth in excess of $5.43 million are subject to the Estate tax. This number is referred to as the “federal estate tax exemption.” Estate assets in excess of the federal estate tax exemption are subject to the Federal Estate Tax, and the Personal Representative must ensure that the estate tax returns are timely filed and paid.
Final Order of Distribution
After all valid and timely filed creditor claims have been resolved, taxes have been paid, and the administration of the Estate is otherwise complete, the Personal Representative will petition the Court for a Final Order of Distribution. The Final Order of Distribution generally provides for the payment of any outstanding administrative expenses of the Estate, and directs the Personal Representative to distribute all assets remaining in the Estate to the beneficiaries pursuant to the Decedent’s Last Will and Testament. If the Decedent died without a will, the Final Order of Distribution will distribute the assets of the Estate to the Decedent’s heirs pursuant to the Florida Intestacy Statute.
