Formal Administration in Florida
Formal probate administration is the most common type of probate proceeding in Florida because it is required if a decedent has been dead for less than two years and the value of the probate estate exceeds $75,000.
A decedent's probate estate is not the same as his or her gross estate, which consists of everything in which the decedent had an ownership interest. The probate estate consists only of assets owned solely by the decedent at the time of death. For example: a personal bank account; a home in only his or her name; or a retirement account with no named beneficiary.
Jointly owned property, property with a named beneficiary, any funds held in a living or revocable trust, assets that are payable on death (POD), and/or any exempt property under Florida statute, are not part of the probate estate and are not counted against the $75,000 minimum required for formal administration.
Formal Probate Requires a Personal Representative and an Attorney
The process of formal probate mandates that the decedent's estate be administered by a personal representative (known as an executor in some states), someone who is appointed by the probate court. In most cases, the personal representative is a person named in a will or someone with close family ties to the deceased, but a personal representative also can be a bank, trust company or corporation.
Florida statutes spell out qualifications, duties and powers of the personal representative in detail. For instance, a personal representative must:
Be over the age of 18
Be a resident of Florida, unless he or she is a close relative
Not be a convicted felon
Not be a person deemed incompetent to carry out the duties of the appointment
If no application is made by anyone, the court will appoint someone as the estate's personal representative.
Formal probate administration can be complex and can take from four months to many years to complete. The length of time depends on size of the estate, type of assets involved, number and type of beneficiaries, heirs and/or creditors with claims against the estate and intricacies of any disputes.
Florida law also requires that a personal representative employ a probate attorney as a representative in all matters related to the probate under formal administration. Florida's Probate Code permits both the personal representative and the attorney to be compensated. That compensation is determined by formulas spelled out in the state probate code.
How to Begin the Formal Administration Process
To begin formal administration, an "interested person" must file a Petition for Administration with the probate court. The filing must come in the county in which the decedent last lived and must request that the estate be opened for formal administration. The interested person officially must ask to be appointed as the estate's personal representative.
According to Florida law, this can mean any person "who may reasonably expect to be affected by the outcome of the proceedings." While more often than not the petitioner is a close family member of the deceased – or is someone named in a will as personal representative – a creditor can also be an interested person. The petition must be filed regardless of whether the decedent died testate or intestate. If a will exists, it must be located and provided to the court within 10 days of learning of the decedent's death.
The petition usually includes:
The petitioner's name and address and name and address of the attorney of record
The decedent's name, address and date of death
The relationship the petitioner had to the decedent (for example: "heir and daughter," or "a personal representative named in decedent's will.")
Names and addresses of known heirs and/or beneficiaries
Ages of heirs and beneficiaries under 18
Any qualifications of the petitioner to be appointed as a personal representative
An estimated list of assets of the estate and the estate's value
Filing a Notice of Petition for Administration
Some petitioners are "entitled to preference." That means the court will look to them first to fill the role of personal representative. This category includes anyone named in the testator's will to be personal representative. If there is no will, it includes a surviving spouse or a person selected by a majority of the decedent's heirs.
All other petitioners must file a Notice of Petition for Administration with the court. Then they must send a copy of the petition and a copy of any known will to anyone believed to have an interest in the estate. If there is a will, any surviving spouse and anyone named in the will must be contacted. If there is no will, the petitioner must contact any known heirs.
The Notice of Petition for Administration gives other interested parties time to respond to the petitioner's request to open the estate to formal administration, challenge a will, or nominate some other person to be appointed personal representative.
Once the original petition is filed and the time for response to the Notice of Petition for Administration expires, the court can admit the will to probate. If there is no will, the court can open the estate to formal administration, appoint a personal representative (if one hasn't been appointed already) and issue letters of administration giving that person legal authority to administer the estate.
A personal representative must take an oath to administer the decedent's estate faithfully and to perform all the duties specified by Florida's Probate Code and the probate court.
The personal representative also may be required to post a bond that protects beneficiaries or heirs against any intentional or accidental maladministration or misuse of probate assets, funds, or property.
How at Personal Representative Manages an Estate
Once Letters of Administration are granted, the personal representative takes over the administration of the estate. According to Florida statutes, "the personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent's will," as well as act "for the best interests of interested persons, including creditors."
Tasks a Personal Representative Can Perform
The representative can:
Collect, inventory and appraise the decedent's assets
Retain the assets until they are distributed to beneficiaries and heirs
Collect assets owed to the estate
Acquire, mortgage, lease, sell or dispose of real property
Employ people to help administer the estate
Continue any business of the decedent
Satisfy or settle claims against the estate
Enter into agreements related to federal estate taxes
Make partial distributions to beneficiaries, when allowed by law
Execute necessary legal documents related to being a personal representative
Let Creditors Know about Claims
The representative must publish another Notice of Administration, this time one that alerts any creditors with potential claims against the estate. Those creditors then have three months to file a Statement of Claim with the court.
If no Notice of Petition for Administration was previously required because the original petitioner was "entitled to preference," a copy of this Notice of Administration must go to:
A decedent's surviving spouse
Persons who might be entitled to exempt property
Trustees of any trusts
Any other interested persons who might make an objection to a will or to the qualifications of the personal representative
Representatives Report to the Court
Throughout formal administration, the personal representative reports to the probate court or the probate judge. In most cases, the representative is required to file periodic accounts with the court so the judge can monitor and review the management of the estate.
Making a Final Accounting
After distribution of the estate's assets according to the provisions of the will or according to the dictates of the court if there is no will, the representative must make a final accounting of the administration.
This account should include:
Receipts and records of any transactions
A list of any disbursements made or income received
Compensation paid to professionals
Settlement of any creditors' claims
A list of assets and properties transferred to beneficiaries and heirs
Once a final accounting is filed with the court, a judge holds a formal hearing to approve it, unless waived by all interested parties. An objection can be made to the final accounting within 30 days.
Removing a Personal Representative
A judge or probate court can remove a personal representative and can remove the representative's Letters of Administration. Certain circumstances must exist, however.
Those include failure to comply with a court order or any breach of legal or fiduciary responsibility related to the role of the representative. The court can also step in if the personal representative can't fulfill his duties because of age, illness or disability.
The representative can also resign at any point. If that happens, the court will appoint a successor.
Closing the Estate
Once the personal representative completes all necessary duties and responsibilities, he or she needs to file a petition for discharge of the estate. The petition must include a plan for the final distribution of any estate assets.
When final distribution is complete and evidence is provided to the court that all beneficiaries or heirs have been satisfied, all creditors' claims have been dealt with, and all taxes and administrative costs have been paid, the court will enter an order discharging the personal representative. The Order of Discharge officially ends formal administration and closes the estate.
The probate court may revoke an order of discharge and reopen an estate if it determines that further administration is required for any reason, such as the discovery of any additional property, or fraud on the part of any party.