Probate And Trust Administration FAQ
- What is probate?
- How do I file a Summary Administration?
- How do I open a Formal Administration probate of an Estate?
- What Authority Does the Personal Representative Have to Act for the Estate?
- How Does the Estate Deal with Creditors?
- How Do Beneficiaries Receive Their Distributions?
- Does the Personal Representative Receive Compensation for Services?
- Who Pays the Costs of Administration Such as Attorney’s Fees, Accounting Fees, Etc.)?
- What is Trust Administration and How Does it Differ From Probate?
- How do I find an experienced probate, estates or trust administration attorney?
Probate is the court process through which a person’s Estate is administered. In layman’s terms, probate is one of the means through which a person’s final affairs are resolved. In probate, various matters are addressed. These include matters such as gathering of Estate assets, payment of creditors, payment of any unpaid taxes, determination of beneficiaries, appointment of a guardian, and distribution of a person’s assets. In Florida, there are two types of probate: Summary Administration and Formal Administration. A Summary Administration applies to estates of less than $75,000 (not including exempt assets such as a homestead). A Formal Administration applies to Estates valued at more than $75,000. The determination of whether an Estate requires a Summary Administration or a Formal Administration should be made with the advice of an experienced Florida probate attorney.
Summary Administration is a form of probate intended to deal with smaller estates and in which there are either no creditors or all creditors are known and there is a plan to pay the creditors through the Summary Administration. Unlike a Formal Administration, in a Summary Administration essentially all required documents are submitted to the court at one time and the court enters its Order of Summary Administration. This Order directs the distribution of Estate assets and the payment of creditors. No Personal Representative is appointed in a Summary Administration. This simple form of probate is desirable when appropriate because it can be accomplished at a lower cost and in a shorter period of time. Probate attorneys and estate attorneys in the Tampa Bay area (Hillsborough, Pinellas, Pasco and Hernando counties, including Tampa, Brandon, St. Petersburg, Clearwater, Dunedin, Palm Harbor, Wesley Chapel, Zephyrhills, Dade City, New Port Richey and Spring Hill) typically charge a flat or fixed fee ranging from $2,000 to $3,000 for a Summary Administration. In the Tampa Bay area (including Hillsborough, Pinellas, Pasco and Hernando counties), Summary Administration can usually be completed within 30-45 days from the date of filing. This contrasts significantly from a Formal Administration which can be very expensive and take a minimum of 8-12 months (and frequently longer).
A Formal Administration probate is initiated by filing a Petition for Administration with the Circuit Court of the county where the deceased person resided at the time of death. The Petition requests that the court admit the Will to probate (if there is a Will), that the court appoint the Personal Representative and open the Estate administration. The Personal Representative does not have any authority to act for the Estate until the Court enters its Order Appointing Personal Representative and the Personal Representative has sign an Oath of Personal Representative. Sometimes the court will provide in the Order that the Personal Representative’s appointment does not go into effect until a bond is posted. The purpose of the bond is to secure performance by the Personal Representative. Whether to require a bond and the amount of a bond is determined in the discretion of the probate court. In most instances, a request is made to waive the bond.
Once appointed, the Personal Representative will have authority both under the applicable Chapter 733, Florida Statutes and under the terms of the Will to act for the Estate. These cover a broad range of powers including dealing with Estate assets, resolving creditor claims, distributing Estate assets, etc. In order to exercise his or her authority, the Personal Representative is issued “Letters of Administration” which are signed by the probate judge empowering the Personal Representative to act for the Estate.
One of the first steps taken by the Personal Representative is to publish a Notice to Creditors in a local publication. In addition, a copy of the Notice to Creditors is mailed to any known creditors. Once the Notice to Creditors is published, creditors have the lesser of three months from the date of publication or 30 days from actual receipt of the Notice within which to file a claim against the Estate. If claims against the Estate are not timely filed, they are forever barred. This gives the Personal Representative and the Estate finality in dealing with creditors. If claims are filed which are disputed, the Personal Representative may object to them, thereby triggering a situation where they may be resolved by the court.
Distributions to beneficiaries from the Estate can be made when provision for payment of all creditors has been made. This usually means that the Personal Representative does not distribute the Estate until the creditor period has expired. Distributions can be made “in kind” meaning that the distribution is made from the Estate assets themselves. For example, if there are two beneficiaries and the Estate includes two equally valued motor vehicles, the Personal Representative can distribute one vehicle to one beneficiary and one to the other. Alternatively, the Personal Representative may liquidate or sell the Estate assets and distribute the proceeds according to the plan of distribution. When a beneficiary has received a distribution, the beneficiary gives a Receipt to the Personal Representative.
The Will often addresses whether a Personal Representative is to be compensated for his or her services. If the Will does not address the issue or if it specifically authorizes payment, then the Personal Representative can receive compensation. The amount of compensation will be determined by the Personal Representative but if there is any disagreement, the court makes the final decision. A Personal Representative may receive compensation not to exceed 3% of the Estate value.
Before final distribution to beneficiaries, the Estate pays the costs of reasonable attorney’s fees, accounting fees and any other reasonably necessary fees. This means that these expenses come out of the Estate before distribution, so the beneficiaries share in the costs.
Unless otherwise required by the Living Trust agreement, a Living Trust may be administered by the Trustee without court oversight. However, some of the Trustee’s duties are similar to those of a Personal Representative. Upon the death of a Trust Grantor, the Trustee must gather all Trust assets, determine and pay all legitimate creditors, pay any taxes, and oversee the management and distribution of the Trust assets. Unlike probate, which is governed by the Chapter 733, Florida Statutes and by the Florida Rules of Probate Procedure, Trust administration is usually governed by the terms of the Trust agreement itself supplemented by Chapter 736, florida Statutes. As with probate, the law governing Trust administration is sufficiently complex that a Trustee should seek the advice of an experienced Florida Trust attorney before administering the Trust. The Florida Trust Code has some very specific duties which must be complied with in order to fulfill the trustee’s duties.
The name of an attorney who is experienced in all aspects of probate, estates and trust administration can be found much like finding other professionals, including by asking friends and family, doing research on the internet and elsewhere and through lawyer search sites such as http://www.findlaw.com/, http://www.martindale.com and http://www.lawyers.com. Most importantly, in hiring an attorney, meet with the attorney in person and make sure that you are comfortable with the experience and approach and demeanor of the attorney who will be representing you. The relationship you have with your attorney during this important time will be helpful to you and should be based on a mutually good rapport between client and attorney.
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