Someone close to you died and you are now charged with getting their affairs in order. This is probably the first time you are faced with this responsibility, and you may have many questions about the probate process. This guide is here to serve as a reference manual to answer some of the common questions and concerns of a first time personal representative of an estate in the Miami, Florida area.
When someone dies in Florida, their assets cannot be distributed without first going through the probate process in the court. The purpose of the probate process is to monitor the personal representative as they discover and collect the assets of the decedent, pay the decedent’s debts and taxes, and distribute their property to those entitled to it. The process is subject to strong control by the court. Reports and legal documents have to be filed and parties have to be notified. Failure to follow Florida law may result in serious repercussions for the personal representative.
Here are the answers to the most important questions you may have:
- What Does a Personal Representative Do?
- How Long Should Florida Estate Probate Take?
- How is a Will Probated?
- How Does the Personal Representative Find the Estate’s Assets?
- How Does the Personal Representative Determine a Decedent’s Liabilities?
- How Should a Personal Representative Manage the Estate?
- What Taxes Must Be Paid?
- When Does the Estate Get Distributed?
What Does a Miami Personal Representative Do? [Top]
A personal representative is there to wind up the decedent’s affairs and to carry out the decedent’s Will if there is one. A Florida personal representative is responsible for collecting the assets of the estate, paying the decedent’s debts and taxes, and distributing the assets to those entitled. If there is a will, the assets are distributed as per the instructions in the will. If there is no will, the assets are distributed in accordance with Florida intestacy laws.
The personal representative is responsible to file all of the forms, documents, reports and notices required by state and federal laws. Not following the law can have serious repercussions for the personal representative. Not knowing the law is not considered an excuse for not following it, as Florida estate attorneys are widely available.
The personal representative is responsible for filing the income tax return for the last year of the decedent’s life and an estate income tax return for the income generated by the estate. If the estate is large enough, estate tax returns need to be paid. All of the tax liabilities have to be satisfied from the estate. If the estate has no cash, the personal representative will need to sell assets to satisfy the tax liability. An accountant and an attorney can help you fill out and file the appropriate forms and make tax-saving elections on those forms. They will also advise you of the amount of taxes that needs to be paid and the options available in paying the taxes.
While the estate is being administered, the personal representative is responsible for safekeeping and managing the estate’s assets, which means making sure that the decedent’s property is secured with a security and surveillance system, and the estate’s property is in a safe place, preferably a safe.
The personal representative has to keep timely records of absolutely everything that is done in the estate, because they will need to render an accounting of the estate once it comes to a close. The accounting may have to include all the assets received, expenses incurred, income and losses during the administration of the estate, claims paid to creditors, and proposed distributions to heirs or beneficiaries of the estate.
How Long Should Miami Estate Probate Take? [Top]
Estate probate will take at least the time it takes to get things together and become appointed the personal representative (about a month or two), the time it takes to publish a notice to creditors in newspapers (another month) and waiting for the deadline for creditors claims to pass (three months is required). Most estate take at least a year to go through probate, because of the multitude of forms to file and the time it takes estate attorneys, courts and government agencies to process paperwork. There’s also estate property to manage, claims, taxes, etc, as described above. So give it at least a year.
More complex estates take more time, about two years or so, and estates with litigation can drag on for a couple of years, although most litigation cases are over in the span of about two and a half years.
How is a Will Probated in Miami? [Top]
If there is a will, getting it accepted by the court is the first step in a probate of a Florida estate. The personal representative will need to file the will with the court and submit the required documents to have the will probated. After that, the personal representative will need to obtain jurisdiction of the parties who are entitled to notice. Once a hearing is held and the nominated personal representative is approved, they are authorized by the court to start fulfilling their duties to the estate.
Most proposed personal representatives do not get challenged. But if there is a challenge, witnesses will have to be examined before the will is probated. It is even possible for a will to be declared void by the court. A will challenge is a complex proceeding that may take months or years to complete and may delay some aspects of the probate of a Florida estate.
How Does the Personal Representative Find the Estate’s Assets? [Top]
The personal representative must locate and marshal of the decedent’s assets. Finding assets can be a challenge, but your authority as the personal representative gives you the power to obtain information from banks, insurance companies, other financial institutions and the government about the decedent’s assets.
Sometimes, tracing an asset can be as easy as finding a list of assets in the decedent’s documents, looking through the decedent’s documents to find statements, looking in the decedent’s drawers to find a key to a safe deposit box, mailbox or storage space, or searching the decedent’s computer and visiting the local banks and financial institutions.
At some point, it’s likely that the assets you’ve found are all the decedent had. But if you think that some assets are missing, you can have an attorney subpoena the people or institutions that you suspect have those assets. If someone took the estate’s assets, it may be the personal representative’s obligation to sue that person on behalf of the estate, even if it’s their relative.
How Does the Personal Representative Determine a Decedent’s Liabilities? [Top]
Determining liabilities is relatively easy – most of the creditors will come to you. Some of the common claims are for unpaid bills and medical expenses. Tax returns have to be filed and taxes need to be paid.
The personal representative is required to pay claims of all known creditors, and is required to publish a notice in newspapers selected by the clerk of the court. Three months after the notice is published, creditors can no longer make clams against the estate.
The personal representative has a duty to carefully evaluate every claim to make sure that it is genuine. If the claim is not genuine, the personal representative will decline to pay the claim, giving the alleged creditor an option to file a lawsuit against the estate in hopes of having the claim recognized by the court. The personal representative also has the power to negotiate the amount to be paid out on a claim.
How Should a Personal Representative Manage a Miami Estate? [Top]
A personal representative has a duty to manage the estate in a way that complies with the applicable law, satisfies creditors’ rights and benefits the recipients of the estate. The personal representative may use the estate’s assets to hire professionals to manage the estate’s assets. Most assets already have managers in place, such as securities brokers and real estate management companies, so all the personal representative may need to do is to instruct those agencies to act the way they’ve acted before the owner’s death. But there are also situations where there are no managers in place, or the personal representative feels that he can find a better manager or do a better job himself. If a crisis occurs to the property, it is the personal representative’s responsibility to manage it.
As part of managing a Florida estate, the personal representative may need to sell estate assets to satisfy creditors or tax liabilities.
What Taxes Must Be Paid in a Miami Estate? [Top]
The personal representative is responsible for having the estate pay the decedent’s outstanding property and income taxes. They will need to file an income tax return for the last year of the decedent’s life, an estate income tax return for income generated by the estate, an estate tax return if the estate is large enough, and gift tax return if the decedent transferred any property prior to his death. The personal representative is also responsible for having the estate pay the taxes. For a large estate, tax elections may be available that may save hundreds of thousands of dollars in estate taxes, so make sure to consult your Florida estate tax attorney and have them be involved in the tax preparation.
When Does a Miami Estate Get Distributed? [Top]
Once assets have been collected and debts and taxes have been paid, the personal representative can distribute the balance of the estate pursuant to the will or in accordance with the Florida intestacy laws. Before distributing any assets, the personal representative would do well to obtain a written release from every recipient, to make sure that the personal representative will never be sued by the beneficiaries of the estate.
If the beneficiaries have a problem with the way the personal representative carried out their duties and they demand a formal estate accounting, disbursements will have to wait until the accounting proceeding is completed. If an emergency situation arises, the personal representative may be able to make some preliminary distributions before the estate is closed, making sure to first consult their estate attorney to draft waiver and release forms and for other precautions.
When the personal representative is ready to disburse the remaining assets and close the estate, they should have their Florida estate attorney apply for a Court Order directing them to make the final distribution and afterwards discharging them from their position as the personal representative of a Florida estate.
I hope this guide was useful to you. If you need a Miami, Florida area estate attorney, give us a call at (786) 522-1411.