One of the primary purposes of probate is to ensure that the decedent’s estate debts are paid in an orderly fashion. The personal representative must use diligent efforts to give actual notice of the probate proceeding to “known or reasonably ascertainable” creditors. This gives the creditors an opportunity to file claims in the decedent’s probate estate, if any. Creditors who receive notice of the probate administration generally have three months to file a claim with the clerk of the circuit court. The personal representative, or any other interested persons, may file an objection to the statement of claim. If an objection is filed, the creditor must file a separate independent lawsuit to pursue the claim. A claimant who files a claim in the probate proceeding must be treated fairly as a person interested in the probate estate until the claim has been paid, or until the claim is determined to be invalid.
The legitimate debts of the decedent, specifically including proper claims, taxes, and expenses of the administration of the decedent’s probate estate, must be paid before making distributions from the will to the decedent’s beneficiaries.
The court will require the personal representative to file a report to advise of any claims filed in the probate estate, and will not permit the probate estate to be closed unless those claims have been paid or otherwise disposed of.
For help or answers to estate-related questions, you can contact BaskinFleece at 727.572.4545.
A will cannot dispose of any of the decedent’s property until it is admitted to probate. In order for a will to be admitted to probate, it must be executed in accordance with the formalities required by Florida law. The testator must sign his will at the end in the presence of two attesting witnesses. The attesting witnesses must sign in the presence of each other and in the presence of the testator. If the testator attaches a self-proof of will, the will may be admitted to probate without further proof. Without a self-proof of will, an oath of one of the attesting witnesses may be required before the will is admitted to probate.
What Happens When a Will Is Lost? Upon the testator’s death, if a will, executed by the testator and kept in his possession, cannot be found, there is a presumption, absent other evidence, that he destroyed it with the intention of revoking it. However, this presumption may be overcome and the will may be admitted to probate if an interested person is able to establish the full and precise terms of the lost or destroyed will. The content of the lost or destroyed will may be proven with a correct copy of the will and the testimony of one disinterested witness. Without a correct copy, the content may be established through the testimony of two disinterested witnesses.
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Baskin Fleece handles all aspects of estate planning, probate administration, and litigation. To schedule an appointment with a BaskinFleece attorney, call (727) 572-4545. For more information about BaskinFleece, please visit www.BaskinFleece.com.
A personal representative has the responsibility to pay amounts owed by the decedent or the estate to the IRS. Taxes are normally paid from probate assets in the decedent’s estate, and not by the personal representative from his or her own assets; however, under certain circumstances, the personal representative may be personally liable for those taxes if they are not properly paid.
1. The estate will not have any tax filing or payment obligations to the State of Florida; however, if the decedent owed Florida intangibles taxes for any year prior to the repeal of the intangibles tax as of January 1, 2007, the personal representative must pay those taxes to the Florida Department of Revenue.
2. The decedent’s death has two significant tax consequences: It ends the decedent’s last tax year for purposes of filing the decedent’s federal income tax return, and it establishes a new tax entity, the “estate.”
3. The personal representative may be required to file one or more of the following returns, depending upon the circumstances:
• The decedent’s final Form 1040, Federal Income Tax Return, reporting the decedent’s income for the year of the decedent’s death.
• One or more Forms 1041, Federal Income Tax Returns for the Estate, reporting the estate’s taxable income.
• Form 709, Federal Gift Tax Return(s), reporting gifts made by the decedent prior to death.
• Form 706, Federal Estate Tax Return, reporting the decedent’s gross estate, depending upon the value of the gross estate.
This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Some of the content of this information is courtesy of The Florida Bar and represents general legal advice. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.
1. Court Oversight of Personal Representative. Probate is a Court supervised process. The actions of the Personal Representative are reviewed by the Court. The Personal Representative has a duty to act in the best interest of your estate and is accountable to the Court for its actions.
2. Reduced Time for Creditors to File Claims. Under Florida statutes, during probate administration, a creditor is limited to a 3-month time period to file a claim with the Court. If the creditor fails to timely file a claim, then the creditor’s claim is forever barred. For comparison, if there is only a trust administration, a creditor has 2 years to file a claim.
3. Orderly distribution of assets pursuant to terms of Last Will and Testament, or laws of intestacy, if there is no Last Will and Testament. After payment of all claims and expenses of the Estate, the Personal Representative, (we recommend with the help of an attorney), prepares an accounting and plan of distribution which is provided to all beneficiaries. Each beneficiary has the right to object the accounting and plan of distribution. Once the accounting and plan of distribution is approved by all beneficiaries (or the time for objecting has expired), the Personal Representative distributes the remaining assets pursuant to the terms of the Last Will and Testament (or laws of intestacy if there was no Last Will and Testament). Prior to discharging the Personal Representative, the Court ensures all beneficiaries have signed a receipt for distribution.
4. Your Estate, while in probate, is a separate tax entity, which may afford income tax savings. Several of the expenses incurred during the probate process, including funeral and internment arrangements, probate administration expenses, personal representative fees, attorney fees, and CPA fees may be deductible against the income generated by the Estate assets.
Many of the tasks and duties listed above can be overwhelming for a Personal Representative. A qualified attorney can help make that process smoother and less daunting for you. If you need an experienced attorney in trust and probate matters, consider contacting BaskinFleece at 727.572.4545.
Pursuant to Florida Statute § 733.617, a personal representative is entitled to a commission payable from the estate assets, without order of the Court, as compensation for ordinary services. The commission shall be based on the compensable value of the estate, which is the inventory value of the probate assets and the income earned by the estate during administration. A commission computed on the compensable value of the estate is presumed to be reasonable compensation for a personal representative in formal administration as follows:
1) At a rate of 3 percent for the first $1 million;
2) At a rate of 2.5 percent for all above $1 million and not exceeding $5 million;
3) At the rate of 2 percent for all above $5 million and not exceeding $10 million;
4) At the rate of 1.5 percent for all above $10 million.
In addition to the previously described commission, a personal representative shall be allowed further compensation as is reasonable for any extraordinary services performed.
For additional information, please contact BaskinFleece at 727.572.4545
This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.
Many clients come into this office and ask whether they should title all of their bank accounts jointly with their children, as joint tenants with right of survivorship, in order to avoid probate and quickly pass ownership of assets to their children upon their passing.
Joint tenancies with right of survivorship are established when two or more people title assets, such as bank accounts or real property, in their joint name, as joint tenants with right of survivorship. With this form of shared ownership, upon the passing of a co-owner, the deceased co-owner’s interest in the property ends and title passes directly to the surviving co-owner(s). This process would continue until there is a single owner of the account. While this method of passing ownership in assets avoids probate, it can present a new set of issues which should be considered prior to taking any action.
Tax Consequences: The moment you add another person on an account as a joint tenant with right of survivorship, you are effectively making a gift of one-half of the value of the account. If the gift is more than $14,000 (meaning the account contains more than $28,000), then you effectively just made a taxable gift to the newly added joint owner, which gift should be reported to the IRS.
Liability Issues: An account titled with another individual as joint tenants with right of survivorship is now no longer your solely owned asset. One-half of this account is now vulnerable to judgments and creditors of the joint owner.
Unintended Estate Planning Consequences: When a parent adds one or more, but not all, of their children to an account as a joint tenant with right of survivorship, upon the parent’s passing, some children may end up inheriting more than others. While the parent may intend for all of the children to receive an equal share of the assets upon their passing, the surviving co-owners of the account have no obligation to share with their siblings. And, if the surviving co-owner of the account does choose to share with their siblings not named on the account, it would be considered a gift.
In order to avoid the outcomes discussed above and create the most effective estate plan for your situation, it is important to consult with an estate planning attorney prior to retitling your assets.
For additional information please contact BaskinFleece at 727.572.4545.