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DUTIES OF PERSONAL REPRESENTATIVES OF DECEDENTS' ESTATES |
Preface Revised May 2002
This pamphlet is to acquaint persons who may be called upon to serve as
personal representatives of a decedent's estate with the duties and
responsibilities of such a position in Florida.
This pamphlet presents only a basic outline; no attempt has been made to
address the many legal issues which arise during the administration of an
estate in Florida. . Due to the substantial liability exposure in this area,
persons entrusted with the responsibility of administering an estate should
work closely with the estate's legal counsel. A number of probate court
proceedings, such as family administration, summary administration and
disposition of personal property without administration have not been
included in this booklet.
A. FORMAL ADMINISTRATION PROCEEDING:
II. Qualification of Personal Representative
III. Duties and Responsibilities of Personal Representative
IV. Settlement and Distribution
VIII. Frequently Asked Questions
The deceased person is referred to as the "decedent."
Under the law, a legal proceeding known as "probate" usually is required
to settle and dispose of a decedent's estate.
The court proceedings are carried out in the probate court of the county of
decedent's domicile at the time of death.
It is necessary for the estate to be administered so that debts can be paid
and valid title to assets can be transferred to those persons who are entitled
to share in the estate.
Upon a person's death, family members or others interested in the estate
usually locate the will if there is one and contact an attorney to represent the
estate. The estate's attorney will arrange for the probate of the will or for
qualifying an appropriate person to assume responsibility for administering
the estate if there is no will. The attorney will prepare the necessary court
papers for filing with the probate court and will represent the personal
representative throughout the court proceeding and thereafter in the
administration of the estate.
The probate estate consists of personal property (tangible or intangible)
owned by the decedent wherever located, and real property owned by the
decedent in Florida, except homestead. Bear in mind, however, the real
property owned by the decedent in Florida is not homested until the court
enters an order determining that the property is indeed homestead.
Non probate assets pass outside of the decedent's probate estate and are
not subject to administration.
Property not included in the probate estate includes life insurance proceeds
that are not made payable to the decedent's estate, jointly owned property
which automatically passes to the surviving joint owner by right of
survivorship, and property held by a husband and wife as estates by the
entireties. Also, non probate property can consist of an inter vivos trust that
the decedent had the power to revoke (either alone or in conjunction with
another) at the time of his/her death. See, F.S. 689.075. However, the trust
assets may be used to satisfy the expenses of estate administration and the
claims of creditors if the probate property is insufficient. See,
F.S. 733.707(3).
If a person dies leaving a will, he or she is said to have died "testate." If a
person dies without a will, he or she is said to have died "intestate."
In the case of a person who dies having executed a will, a court proceeding
follows whereby the due execution of the decedent's will is proved and an
appropriate person (who usually is named/designated in the will) is
appointed by the Court to serve as the "personal representative" to
administer the estate.
When a person dies intestate (without a will), a petition for administration of
the estate is filed, and the probate court appoints a qualified person to serve
as the "personal representative" to administer the estate. Preferences in
appointment of the personal representative are governed by
F.S. 733.301(1)(b). F.S. 732.101 - 732.111 set forth those who are entitled
to inherit in an interstate proceeding.
The personal representative is responsible for assuming control over all of
the property owned by the decedent for the purpose of administering the
estate. See, F.S. 733.608.
Standard forms have been adopted for statewide use for many probate
court procedures.
II. QUALIFICATION OF PERSONAL REPRESENTATIVE
Any individual who is at least 18 years old who is a resident of Florida at
the time of the decedent's death, is qualified to act as the personal representative. See, F.S. 733.302.
A person who is not domiciled/resident in the state of Florida cannot qualify
as a personal representative of a Florida estate unless he/she meets one
of the criteria set forth in F.S. 733.304.
Trust companies incorporated under Florida law are eligible to serve as
personal representative. Other institutions such as all state banking
corporations, savings associations, national banking associations, and
federal savings and loan associations authorized and qualified to exercise
fiduciary powers in Florida are qualified to serve as personal representative.
See, F.S. 733.305(1).
Every personal representative must be represented by an attorney unless
the personal representative is the "sole interested person" or is an attorney.
See, Fla. Prob. R. 5.030(a). Courts have construed the word "interested
person" to include not only other beneficiaries, but also creditors (if the
decedent has been dead for less than two years).
III. DUTIES AND RESPONSIBILITIES OF PERSONAL
REPRESENTATIVE
A. General. Once a personal representative is appointed by the probate
court, takes the oath of office, and posts bond (if required), the personal
representative is authorized to administer the decedent's estate. The
probate court will issue documents called "letters of administration" which
are the evidence that the person named therein has the authority to deal
with and manage the decedent's property. If the decedent owned property
located outside of Florida, then an ancillary probate proceeding may have
to be instituted in the foreign jurisdiction in order to properly administer the
assets located there.
A duly appointed personal representative is a fiduciary standing in a
position of trust to the estate and its beneficiaries, and is personally
responsible to the creditors (including the taxing authorities) and
beneficiaries of the decedent's estate for a proper administration. If the
estate is administered properly, the personal representative is not, however,
personally responsible for the payment of the debts of the estate.
The personal representative must not commingle any of his or her own funds
with the assets of the estate and must act in a prudent manner in every
aspect of the administration of the estate. Thus, the duties of the personal
representative must be discharged in strict accordance with the law, and
the personal representative must be able to fully account for all of the
decedent's property and the management of it during the period of
administration. See, F.S. 733.609.
The personal representative must take action to gain custody and control of
all of the decedent's assets since he or she will be personally accountable
for the management and disposition of all of the property of the estate. The
basic duties of the personal representative will be to collect and preserve
the assets of the estate; to pay all debts of the decedent and expenses of
administration including taxes; and finally to distribute the remainder of the
estate to those persons entitled to it. A personal representative will be held
liable for a failure to act in addition to being liable for wrongful actions.
In order to raise cash to pay debts and expenses, the personal
representative may be required to sell some of the assets of the estate. In
selling assets, the personal representative will act under the authority set
forth in the will, or generally will act under the supervision of the court.
Securing custody and control of a decedent's property and determining the
decedent's liabilities will involve, in most estates, some of the following
actions (not necessarily in this order, See, F.S. 733.608):
(1) Taking possession of and protecting the real (including protected
homestead) and personal property of the decedent including making
immediate and adequate provision for insurance against loss where
appropriate. Note, however, that the new Florida Probate Rule 5.404
requires a personal representative, who takes possession of what appears
reasonably to be protected homestead pending a determination of its
homestead status, to file a notice of such act and to formally serve a copy
of such notice upon interested persons and any person in actual possession
of the property. The required contents of the notice are set forth in the Rule.
(2) Contacting the Social Security Administration and the Veteran's
Administration to apply for any death benefits or survivor benefits for which
the decedent's estate may be eligible.
(3) Locating insurance policies and applying for benefits if the proceeds
are payable to the estate. If payable to an individual, the personal
representative should deliver the policy to the beneficiary. Generally, when
applying for insurance or other benefits, the personal representative must
present the insurance policy or other benefit certificate, a certified copy of
the death certificate, and letters of authority to act on behalf of the estate.
(4) Contacting the decedent's employer and any club or fraternal
organization to which the decedent may have belonged to determine if the
estate or surviving family members are entitled to any benefits.
(5) Examining the circumstances surrounding the decedent's death to
determine if there are any claims against third parties which need to be
asserted or preserved, such as claims for wrongful death or worker's
compensation.
(6) Giving notice to creditors of the estate to file their claims against the
estate, by publishing a notice in the county legal newspaper. Actual notice
(for example, by regular or certified mail) must be given to known or
reasonably ascertained creditors.
See, F.S. 733.2121; 733.701.
(7) Collecting rents, accounts receivable, interest, dividends and other
income due to the decedent prior to death and that becomes due to the
estate thereafter.
(8) Assuming responsibility for any litigation or settlement of any pending
lawsuit in which the decedent had an interest.
(9) Keeping the property of the estate in good repair.
(10) Keeping the estate property invested properly until the administration
is complete. See, F.S. 733.612; Prudent Investor Rule ss. 518.10-14, F.S.
(11) Reviewing the decedent's personal records.
(12) Having the estate's attorney conduct an estate search of appropriate
county court records.
(13) Opening appropriate estate bank accounts for payment of debts and
expenses.
(14) Locating and accessing any safe deposit boxes in the decedent's
name, F.S. 733.6065 & F.S. 655.936.
(15) Sell real property or continue to make mortgage payments, F.S.
733.613.
However, the personal representative cannot be required to pay debts of
the decedent during a five-month period after first publication of the notice
of creditors. See, F.S. 733.705(1). The personal representative
should consult with his/her attorney to determine which debts/ timely filed
claims to pay. Expenses of administration, debts of the decedent, and
family allowances are divided by statute into eight classes. See, F.S.
733.707. Items in each class have a priority for payment over those of
subsequent classes.
B. Bond. The purpose of requiring a personal representative to post a
bond is to secure creditors and beneficiaries against loss caused by the
improper administration of the estate. According to F.S. 733.403, the
Court has the discretion to waive the requirement of filing a bond, require a
personal representative or curator to give bond, increase or decrease the
bond, or require additional surety. The Court may take into consideration
several factors when determining a bond is required or when waiving the
requirement of bond. The Court has the discretion to allow for a designated
depository in lieu of posting a bond. The Court can decide to require bond
based on the residency of the personal representative, size, nature and
liquidity of estate assets.
C. Accounting - Records. Since the personal representative is personally
accountable for all of the assets of the estate, one of the most important
functions of administration is to maintain accurate and detailed books of
account. The size and complexity of the estate will dictate the degree of
sophistication needed, and the personal representative may find it
necessary to employ an accountant to assist in preparing and maintaining
the estate's financial records. Of course, any bank or trust company serving
as a personal representative will have the expertise and facilities necessary
to prepare and maintain detailed financial records for an estate. In most
estates the accounting records will consist at a minimum of a checkbook,
a journal, and appropriate ledgers to complement entries made in the
journal. The accounts set forth all assets received and disposed of by the
personal representative during the course of administration, all
disbursements to pay debts and expenses, and the balance available for
distribution to the beneficiaries. In many estates it is imperative for the
personal representative to distinguish between income and principal
assets so that proper distributions of income and principal can be made.
In smaller estates, it may be sufficient to handle all receipts and
disbursements through a checking account, as the canceled checks and
deposit slips will provide clear and sufficient records for the purposes of
substantiating the final accounting, required by Fla.Prob. R. 5.400, or any
other accountings.
The basic purpose of maintaining the books and records of the estate is to
set forth the financial history of the estate which serves to protect the
personal representative from liability. Also, properly maintained books of
account are an invaluable aid to the personal representative in making
investment decisions, tax planning, and planning for the payment of debts
and distributions to beneficiaries.
The starting point in establishing books of account is the preparation of an
accurate beginning inventory of the assets owned and debts owed by the
decedent at the date of death. According to Fla. Prob. R. 5.340, within 60
days after issuance of letters, a personal representative...shall file an
inventory of property of the estate, listing it with reasonable detail and
including for each listed item its estimated fair market value at the date of
the decedent's death.
Fla. Prob. R. 5.340 (d), requires the personal representative to serve a
copy of the inventory on the Department of Revenue, the surviving spouse,
each heir at law in an intestate estate, each residuary beneficiary in a
testate estate, and any other interested person who may request it; and the
personal representative shall file proof of such service.
The personal representative may receive assistance from an attorney,
accountant or trust officer in the preparation of the inventory, but it is the
personal representative's responsibility to make sure that the inventory is
accurate and complete.
Normally, the person preparing the inventory must be informed by the
decedent's family, business associates and accountants as to precisely
what property the decedent owned at the time of death. Also, the personal
representative needs to examine the decedent's checkbooks, tax returns,
and other business records, and to explore thoroughly all leads, in order to
ascertain all of the decedent's property and liabilities.
Generally, the following categories of property will be in a typical estate and
included in the inventory:
(1) Real Property. All real estate in which the decedent had any interest
(other than that which passes to another by right of survivorship estates by
the entireties), in fee simple or as a life estate or remainder interest.
The following specific information should be included in regard to each
parcel of real property:
a. The street address or box number, city and state;
b. The legal description;
c. The amount of land and the decedent's interest;
d. Improvements, if any;
e. If rental property, the amount of rent, names of tenants, and description
of leases, if any;
f. If mortgaged, the mortgagee, the amount of the mortgage, rate of interest
and the date payments are due;
g. Taxes on such property and when such taxes were last paid or when
such taxes are presently due;
h. If available, the abstract of title insurance and whether the abstract is
up-to-date;
i. The insurance on the property including each kind, such as fire or liability
insurance, and the amount, company, policy number, local agent and date
of expiration;
j. A history of the use of the property to assess whether there is any
exposure to liability under laws protecting the environment; and
k. Any crops or timber on the property and contracts held by third parties
for the removal of crops or timber.
(2) Personal Property. The personal property inventory will include all
property, other than real estate, owned by the decedent at the time of his
or her death. Since this covers such a wide variety of items, the following
list may be used as a guide in making the inventory. In each case, the value,
location and nature of ownership of the property should be indicated.
a. Automobiles and trucks. Include make, model, year, serial or motor
number, license number, insurance information, liens, cost and date of
purchase.
b. Household furniture. Major pieces are usually described room by
room with pieces of greater value, such as a refrigerator, a stove, laundry
equipment and antiques listed separately. Mortgages or other liens against
the property must be listed.
c. Personal effects. This includes personal jewelry, clothing, furs, and other
valuable items of personal adornment. Generally, paintings, objects of art,
silver, etc., are not considered personal effects but fall under the general
category of tangible personal property and are listed under the heading of
household furniture, or if of substantial value, a separate category is
established.
d. Farm machinery. List each major item separately with make, year and
model number, mortgages and other liens, cost and date of purchase.
e. Farm livestock. List each animal or group of animals or fowl separately,
giving the kind, age and any other identifying characteristics and mortgages
or other liens, cost, date of purchase, and if the property was born on the
premises, the date of birth, if at all possible. Also, it is important to note
whether the property is raised property or purchased property.
f. Business inventory. If the decedent owned an interest in a business
operated as a proprietorship, a separate list should be made for any stock
in trade, fixtures, tools and equipment of the business, stating the cost and
date of purchase for each item in each list. In making these lists, assistance
from an experienced employee may prove invaluable. It is also necessary to
list the inventory value of the property at the time of the decedent's death.
g. Personal insurance. List each insurance policy, such as life, accident
and health, and hospitalization, regardless of whether they are made
payable to a named beneficiary or are on the life of another person, listing
separately for each the company, serial number, amount, beneficiary, and
when the most recent premium was paid and for what period, and any
annuities or retirement benefits. Life insurance that is not payable to the
estate is not included in the value of the estate.
h. Cash assets. List all bank accounts, including checking or savings
accounts, naming the bank, its address and the amount of funds on deposit.
List the exact amount of cash in possession of the decedent or in his or her
safe deposit box or billfold. Joint accounts should include the name and
address of each joint owner and his or her relationship to the decedent.
i. Promissory notes. Include the exact name of the payee on the note, the
name and address of the maker and endorser, the principal amount, the
interest rate, the present balance due, and dates payments are due. Also
list whether the note is secured by a mortgage or other property and
describe the mortgage, if any.
j. Other amounts due the decedent. List all other accounts, debts and
obligations owing to the decedent such as employment related death
benefits and retirement plan benefits.
k. Stocks and bonds, mutual funds, partnership interests, or limited
liability company interests. Include the name of the issuing company or
association, serial or account number, type of issue, registered owner,
interest rate, date on a bond, date last dividend was declared, principal
amount or par value of each bond or share of stock or unit in any other
business entity. If any of the decedent's stock was in a closely-held
corporation, the following information should be recorded:
(i) the number of shares outstanding of all classes of stock on the date of
the decedent's death;
(ii) the number and classes of the decedent's shares;
(iii) a balance sheet as near to the date of death as possible, plus balance
sheets for the five-year period prior to the date of death;
(iv) a profit and loss statement as near to the date of death as possible,
plus profit and loss statements for the five-year period prior to the date of
death; and
(v) any other information concerning the company or industry in general that
may have some bearing on the value of the stock, such as the value of
stock in similar enterprises, prospective net earnings, nature of the
business and history of the enterprise, economic outlook for the industry,
goodwill, majority or minority holdings and the value of stock as used in
previous gifts or sales.
l. Income due the decedent. A listing should be made of all salary or
other income accrued and owing, but not paid to the decedent at the time
of his or her death, including any tax refunds, accrued interest, rents and
dividends. The employer should be reminded to record separately the
accrued compensation items so that they will not be included in the
decedent's final W-2 Form.
m. Collections. All valuable collections such as stamps, coins, books, etc.
should be listed separately.
n. Inherited property. A listing should be made of any other property to be
received by the decedent from an estate or trust. Moreover, it should be
ascertained whether the decedent had any powers of appointment, and (for
estate tax purposes) whether any of the property of the decedent's estate
was received from the estate of another person within ten years prior to the
decedent's death.
o. Miscellaneous property. Any other valuable items including, but not
limited to, boats, boating equipment, camping equipment, snowmobiles,
hunting and fishing equipment.
It should be remembered that the above listing is not intended to be
exhaustive, and should be used only as a guide.
If the decedent is survived by a spouse, some of the items in the inventory
actually may belong to the surviving spouse. and are part of his/her family
allowance or exempt property. Such items would not be subject to the
administration proceedings, except to be set aside and delivered to the
spouse and to be recorded properly for tax purposes. This is a matter that
should be given full consideration prior to the preparation of the inventory.
For the most part, items are entered in the inventory at date of death values,
and written appraisals need to be secured with respect to those assets that
do not have a readily ascertainable market value.
D. Taxes. A personal representative faces four separate sets of taxes: (1)
the decedent's final income taxes (for income paid or accrued prior to death),
(2) the estate's income tax return (for income accrued during the term of the
estate), (3) potentially, an estate tax which is imposed on the transfer of
wealth, and (4) potentially, gift tax returns. The personal representative is
responsible for preparing and filing all applicable state and federal tax
returns on behalf of the decedent for the period of time the decedent was
alive and on behalf of the estate. It is important for the personal
representative to understand that death terminates the decedent's tax year
and thereafter the decedent's estate is a separate taxpayer. Therefore, the
personal representative is responsible for reporting and paying taxes
incurred by the decedent prior to death and taxes incurred by the estate as
a separate taxpayer.
The personal representative should consult with the estate's attorney or
accountant to determine which returns are required and the appropriate
filing deadlines for each return.
(1) Decedent's Final Income Tax Returns. (Form 1040). A Federal final
income tax return must be prepared and filed covering that portion of the
taxable year during which the decedent lived. This return is due for most
decedents on April 15th following the year of death, and may be a joint
return if the decedent has a surviving spouse and otherwise qualifies to file
a joint return for that year. (Also, if the decedent died prior to filing an income
tax return for the year prior to death, the personal representative attends to
the filing of this return in addition to the final return.)
Since certain income tax attributes of the decedent terminate at death, it is
important that the decedent's past income tax returns be reviewed
immediately to determine if any tax planning is needed for the final return.
A personal representative may apply for an extension of time for payment
of the decedent's income tax.
(2) Income Tax Returns for the Estate. (Form 1041). Items of income
received during the administration of an estate must be reported on a
special fiduciary income tax return to be filed with both the federal and state
tax authorities annually.
(3) Federal Estate Tax Return. (Form 706). The personal
representative's duty to file an estate tax return is contingent on the value of
the gross estate exceeding the threshold filing amount prescribed in IRC s
6018. The estate tax is a transfer tax assessed against a decedent's
estate. Under current law, estate tax returns are required to be filed if the
gross estate plus lifetime taxable gifts exceeds $650,000 (for 1999) and
$675,000 in 2000. Additional increases are scheduled thereafter; please
check with your attorney. The filing date is nine months after the date of
death, or on or before the last day of the period covered by an extension of
time for filing. Reg. s 20.6075-1.
In preparing the estate tax return, the personal representative generally
values the estate's assets on the date of the death but may use the alternate
valuation date, which is six months after the date of death, if such election
will result in lower taxes. If the estate elects to use the alternate valuation
date, all assets must be valued as of that date, except any property sold,
distributed, exchanged or otherwise disposed of prior to that date, which
will be valued as of the date of such disposition
The personal representative is responsible for filing the estate tax return
and for paying both the federal and state estate taxes out of the assets of
the estate. Generally, the estate tax must be paid within nine months of the
date of death. There are some circumstances, e.g., if the estate owns a
sufficient interest in a farm or family business, or where the payment of the
tax by the due date constitutes a hardship to the estate, in which the time
for payment of estate taxes may be extended. The personal representative
must keep the filing date in mind and ensure that the estate has sufficient
cash to pay taxes when due, or be prepared to make a timely application
for extension. If the due date falls on Saturday, Sunday, or a legal holiday,
the due date will be the next day that is not a Saturday, Sunday, or legal
holiday.
Generally, an extension, if granted, only applies to the time for filing the
return, and the taxes still must be paid within nine months of the date of
death. The personal representative can be personally liable for taxes if
assets are distributed before the taxes are paid.
State Death Tax Return. (Florida)
A preliminary notice and report (Form DR-301) must be filed within two
months after the personal representative qualifies and must be signed by
the personal representative. See, Chapter 198, Florida Statutes. When a
Florida estate tax return is required, a copy of the federal return must be
filed with the Florida Department of Revenue. Generally, the state death
taxes equal the amount being claimed as a credit shown on the Federal
Estate Tax Return.
A state nontaxable certificate should be obtained when the total value of
the gross estate is insufficient to require the filing of a federal estate tax
return, Form 706. Effective January 1, 2000, for small estates only, the
Department of Revenue will no longer require the filing of a tax return and
the personal representative may execute an affidavit attesting that the
estate is not taxable. The form of the affidavit will be prescribed by the
department of revenue. In the case of a nontaxable estate, the court may
consider the affidavit prepared pursuant to F.S. 198.32(2), as evidence of
the nonliability for tax. Contact the Department for further information.
(4) Gift Tax Returns. (Form 709). The personal representative must
determine whether the decedent made gifts during his lifetime, especially
within three years prior to his death, the size of such gifts, and whether the
decedent filed all required gift tax returns during his lifetime. The personal
representative has the responsibility for filing any gift tax returns that may
be due.
Although the responsibility placed upon a personal representative in the
area of taxation may seem burdensome, his or her advisors can be of
considerable assistance in this area. There are a number of issues and
options that can result in substantial tax savings to the estate and
beneficiaries, including maximizing use of the decedent's income tax
deductions, deducting the expenses of estate administration, elections
regarding the estate tax marital deduction, request for prompt assessment
and discharge from personal liability for taxes, valuation issues, and others.
Also of particular significance is selecting a fiscal year for the estate and
planning for distributions of the estate's assets to the beneficiaries.
E. Disclaimers. Once the approximate size of the estate and estimated
liabilities have been determined, the personal representative should give
consideration to the possible use of disclaimers by beneficiaries. In some
situations a disclaimer allows a beneficiary to disclaim an interest in an
estate and shift income or principal assets to other beneficiaries. The
primary purpose of using disclaimers is to save taxes by diverting assets
to other persons who are often in a younger generation than the disclaiming
beneficiary. Immediate consideration must be given to the use of
disclaimers because they must be made in writing within nine months after
the decedent's death and before distribution of the property being
disclaimed. Because this is a highly complex area, the personal
representative should seek legal advice.
IV. SETTLEMENT AND DISTRIBUTION
A. Claims. The Florida Probate Code provides that claims and demands
must be filed in the "probate proceeding" within the later of three (3) months
after the first publication of the notice to creditors or, as to any creditor
required to be served with a copy of the notice to creditors, 30 days after
the date of service of the copy on the creditor. If a claim is not filed within
the three month/30 day period, it is barred. See, F.S. 733.710, 733.2121,
733.701, 733.702.
The newly enacted F.S. 733.2121, creates a new form for notice to
creditors, which is the form that will be published. The notice to creditors is
published once a week for two consecutive weeks, as the notice of
administration formerly was. A copy of the notice to creditors must be
furnished to known or reasonably ascertainable creditors, as the notice of
administration was. A personal representative is personally liable for
wrongfully furnishing, or failing to furnish in good faith, a notice to creditors. Additionally, requires that known contingent creditors must be furnished a
copy of the notice to creditors. See, also the new Florida Probate Rule
5.241.
After the issuance of the letters of administration, a personal representative
shall serve a notice of administration on the beneficiaries. Notice of
Administration is to additionally be served on persons who may be entitled
to exempt property and on any other person who may claim an interest in
the estate. The amended F.S. 733.212 deletes the publication requirement
regarding the notice of administration; and deletes the requirement that the
notice of administration be served on creditors.
No personal representative shall be compelled to pay the debts of the
decedent until after the expiration of five (5) months from the first publication
of notice to creditors. See, F.S. 733.705(1).
The personal representative is obligated to make payment of expenses of
administration and creditors' claims against the estate in accordance with
the priorities set forth in F.S. 733.707.
As a general rule, the personal representative should not pay any debts or
claims until his or her attorney approves payment.
F.S. 733.708 sets forth the procedure for compromising claims against an
estate. The court may enter an order authorizing the compromise if
satisfied that the compromise will be for the best interest of the
beneficiaries. The order shall relieve the personal representative of liability
or responsibility for the compromise.
B. Debts and Expenses. All debts and expenses, such as funeral
expenses, taxes, fees, commissions, debts of the decedent, bond
premiums, and court costs, must be paid before the assets of the estate
are distributed to the beneficiaries.
C. Distribution. Following the settlement and payment of all claims,
expenses and taxes, the estate's attorney should advise the personal
representative concerning the appropriate manner in which to distribute the
remainder of the estate to the beneficiaries. Normally, a final accounting is
prepared and presented to the beneficiaries for approval prior to
distribution. As stated above in the section on taxes, in most estates
important tax considerations are involved in making distributions from an
estate.
According to F.S. 733.801, a personal representative is not required to
deliver any devise to any beneficiary until the expiration of 5 months from
the granting of letters of administration.
Partial distributions are authorized under F.S. 733.612(26), F.S. 733.802,
and Fla. Prob. R. 5.380. Partial distributions should only be made when
the remaining assets of the estate will be sufficient to pay all taxes, claims,
and costs determined or estimated to be due. The personal representative
will be potentially liable for an improper partial distribution. Each estate
should be viewed on a case by case basis to determine whether it is
prudent for a personal representative to make a partial distribution.
D. Discharge. When all debts and taxes have been paid, and
administration has been completed except for final distribution, the
personal representative must file a final accounting unless waived (See,
Fla. Prob. R. 5.400(f)) and petition for discharge. The petition for
discharge must be filed and served on all interested persons within 12
months after issuance of letters for estates not required to file a federal
estate tax return, otherwise 12 months from the date the return is due,
unless the time is extended by the court for cause shown after notice to
interested persons. See, Fla. Prob. R 5.400(c).
For estates required to file an estate tax return, evidence of payment in the
form of the federal estate tax closing letter should be filed with the court.
A report of distribution is not necessarily required. Pursuant to
Fla. Prob. R. 5.401(f), the presentation of "evidence" that the estate has
been properly distributed and that claims of creditors have been paid or
disposed of is sufficient for the court to enter an order discharging the
personal representative and releasing the surety.
The law recognizes that a personal representative is entitled to
compensation for carrying out the responsibilities of administering an
estate. The commission is payable from the estate assets. In Florida,
these fees are determined by statute unless the decedent during his or her
lifetime or the heirs or beneficiaries contracted with the personal
representative for a different fee arrangement. See, F.S. 733.617.
Although the personal representative is primarily responsible for the
administration of the estate, the law recognizes that the personal
representative is required to retain the services of an attorney and may be
required to obtain the services of other professional such as accountants,
trust officers, appraisers, and in some instances, investment advisors.
The personal representative should be prompt in obtaining all information
or reports that are needed, and should work closely with the advisors in the
preparation of all reports and returns. Keeping the estate's advisors fully
advised of the affairs of the estate will save a great deal of time and
expense, avoid misunderstandings, and enable them to plan properly for
and advise the personal representative regarding the administration of the
estate.
Attorneys for personal representatives shall be entitled to reasonable
compensation for their services payable from the assets of the estate
without court order. See, F.S. 733.6171.
Many factors determine the attorney's fee in the representation of an estate.
The attorney's fee may be determined by private agreement or based on
F.S. 733.6171(2).
Normally, in setting a fee the attorney will consider the size of the estate; the
time involved in the representation; the novelty or difficulty of the legal issues
involved; results achieved in contested matters; and any unusual situations
involving the estate.
VIII. FREQUENTLY ASKED QUESTIONS
1. Why is the Judge requiring the personal representative to post bond ?
According to F.S. 733.403, the Court may determine to require bond based
on the residency of the personal representative, size, nature and liquidity of
estate assets. Even when the personal representative is the only beneficiary,
the Court may still require the posting of bond because it views creditors as
other interested persons. The Court has the discretion to require bond even
when the will waives the requirement of bond, or the other beneficiaries have signed waivers and consents.
2. What are the filing fees for the various estate administration proceedings ?
(a) Disposition of Personal Property Without Administration: $35.00
(b) Summary Administration: $ 57.50
(c) Formal Administration, Ancillary or Conservatorship: $ 147.50
3. What is required to be filed when all the assets are in a Trust ?
F.S. 737.308, requires the trustee to file with the Probate Court a Notice of
Trust for a trust described in Section 733.707(3). The filing fee is $40.00
4. My client is pursuing a lawsuit against the decedent for personal
injuries, do I need to open an estate? and who can be appointed the
personal representative ?
Unless a Formal Administrative proceeding has already been commenced
and a personal representative already appointed, you will need to open a
Formal Administration proceeding and seek the appointment of a personal representative. The personal representative will stand in the decedent's
shoes for purposes of the civil lawsuit including serving the complaint on the
personal representative. If a party pursuing the lawsuit is opening a Formal
Administrative proceeding, the Court typically to appoint an independent
personal representative to represent the decedent's estate if the decedent's
relatives are unwilling. Generally, the Court would prefer not to appoint the
person recommended by the Plaintiff's attorney due to the potential for a
conflict of interest.
The administration of a decedent's estate can be a complex and time
consuming undertaking. No one should be named as or assume the
responsibility of a personal representative unless that person has the
capability and commitment to fully discharge the many tasks involved in
carrying out the responsibilities of his or her appointment.
The Probate Court Judges of Broward County, Florida and their staff are
pleased to present this booklet to give insight into what is involved in
estate administration. The booklet is a basic outline to personal
representatives; however, it is not a "do-it-yourself" guide and cannot be
used as a substitute for attorneys, accountants, trust officers and other
professional advisors necessary for proper estate administration. Nothing
contained in this outline constitutes legal advice. Legal advice should be
obtained from your own attorney. This is not an official record of any court.
Portions of the material on this web site may be incorrect or not current.
Any person or entity who relies on any information obtained on the web site
does so at his or her own risk.
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