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In Florida Probate: Who gets paid and in what order?

On Behalf of | Nov 6, 2017 | Probate |

When a person dies and a probate is opened in Florida, expenses and claims of creditors get paid in a certain order. This becomes especially important to understand when there are not enough assets (i.e. money) to go around.

Section 733.707 of Florida Statutes provides for the order of payment of expenses and obligations in a probate estate. These are set forth in eight different classes. The personal representative must pay the expenses of the administration and obligations of the decedent’s estate in the following order:

(a) Class 1.-Costs, expenses of administration, and compensation of personal representatives and their attorneys fees and attorneys fees awarded under s. 733.106(3).

(b) Class 2.-Reasonable funeral, interment, and grave marker expenses, whether paid by a guardian, the personal representative, or any other person, not to exceed the aggregate of $6,000.

(c) Class 3.-Debts and taxes with preference under federal law, claims pursuant to ss.409.9101 and 414.28, and claims in favor of the state for unpaid court costs, fees, or fines.

(d) Class 4.-Reasonable and necessary medical and hospital expenses of the last 60 days of the last illness of the decedent, including compensation of persons attending the decedent.

(e) Class 5.-Family allowance.

(f) Class 6.-Arrearage from court-ordered child support.

(g) Class 7.-Debts acquired after death by the continuation of the decedent’s business, in accordance with s. 733.612(22), but only to the extent of the assets of that business.

(h) Class 8.-All other claims, including those founded on judgments or decrees rendered against the decedent during the decedent’s lifetime, and any excess over the sums allowed in paragraphs (b) and (d).

An example of how these classes work might be helpful. Consider an estate consisting of only $25,000 in cash. Cost of the probate is expected to be $2,500 for attorney fees and costs (Class 1), and there are the following creditors or obligations: funeral expenses of $5,500 (Class 2), federal income taxes of $4,000 (Class 3), hospital expenses of $5,000 (Class 4), family allowance of $6,000 (Class 5), child support arrearages of $2,000 (Class 6), and credit card debt of $7,500 (Class 8). Of these, the claims and obligations of Class 1 through Class 6 will get paid. The Class 8 creditors are out of luck. Under this scenario, there would be nothing left for the beneficiaries.

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