You have heard that Probate is something to avoid; however, unless you have been through it, you may not understand why. Here are some basic facts about probate in Florida:
1. Full Probate (assets over $75,000 or under $75,000 with creditors) takes at least six months to a year or longer. During that time, the assets being probated are tied up. If your heirs want to sell your home in probate, they must go through a formal process. This includes filing a Petition to administer the Estate. If successful, the Judge of the Probate Court will sign an Order called Letters of Administration. This could take one to three months.
2. The next step is Notice to Creditors published in a newspaper. This must be done even if there are no creditors. Creditors have 90 days from the date of first publication to file a claim against the Estate. Nothing can be done regarding distribution of the assets until after the ninety days.
3. A tax ID number from the IRS must be obtained for the Estate. Once the Personal Representative (Executor) obtains the Letters of Administration and the tax ID number, an Estate account can be opened to transfer any funds from an account or future proceeds from the sale of a home or other real estate. If real estate is involved, a court order is generally necessary to allow the closing and another court order may be necessary to distribute proceeds.
4. A formal Inventory must be filed listing exact date of death values of all assets being probated.
5. A formal accounting may be necessary if all beneficiaries do not agree to waive it.
6. Once all distributions are made, the Estate cannot be closed without another court order.
7. If an estate asset is discovered after the Personal Representative has been discharged by the court, the Estate must be reopened and The Many Reasons To Avoid Probate Paid Advertisement more formalities must be followed.
8. The attorney’s fees can be quite high, depending on the value of the Estate. Florida law authorizes a 3% fee on the first million dollars, and a sliding percentage thereafter. The Personal Representative can negotiate with the lawyer for a lower fee. If the Estate is valued at $700,000 and the fee is reduced from 3% to 2%, that is still a $14,000 fee, plus about $1,000 in court costs for filing fees, publication in the newspaper, etc. An attorney can also charge an hourly rate, but this could easily exceed the 3%, particularly on smaller estates.
9. The Personal Representative will probably need to pay money out of pocket for initial costs and a Retainer for the attorney, plus funeral bills if not already pre-paid. In addition, if real estate is involved, the Personal Representative may have to pay taxes, utilities, maintenance, mortgage payments etc. until access to Estate funds is authorized. The Personal Representatives will reimburse themselves at that time, but it could cause hardship if personal funds are limited.
10. All of the above is stressful and time consuming for the Personal Representative. Although a fee is allowed, this could be an issue if family members or other beneficiaries object.
That is just a brief summary of why it is so crucial to have proper and complete estate planning with a lawyer to be sure that ALL assets avoid probate. A Revocable Living Trust or a Life Estate Deed are two possible solutions. Please refer to many of my other articles for practical and detailed tips on avoiding probate.
My Dad used to say: “May you live as long as you want and never want as long as you live.” I will add: when you die, may your heirs avoid probate!
Please feel free to call me for a free phone or personal consultation regarding any issues pertaining to Wills, Trust, Deeds, Probate, Power of Attorney or Health Care Surrogate. I am also available for a free consultation regarding personal injury claims or to explain car insurance coverage. Call me at 954-569-4878. My address is 3275 W. Hillsboro Blvd., Suite 204, Deerfield Beach, Florida 33442. My web site is http://www.martinzevinpa.com and my e-mail address is [email protected].
