The purpose of probate is to collect a deceased person’s assets; pay his or her claims, taxes, and administrative expenses from these assets; and distribute the remainder of the assets after administrative expenses to the beneficiaries entitled to receive them. A personal representative (known as an executor) is appointed by the court to pay the deceased’s claims and taxes and to distribute the remainder of the estate assets according to the terms of the deceased person’s will. If a person dies without a valid will, the personal representative then distributes the remainder of the estate assets in fixed percentages to the heirs named in the Florida statute.
A personal representative appointed by a Florida court must take possession of all the deceased’s personal property no matter where it is located. The Florida personal representative also assumes the responsibility for administering the deceased’s real property in this state with the exception of the homestead. Since the Florida courts have no jurisdiction over real property outside the boundaries of the state, the Florida personal representative does not have the authority to control the administration or management of real property in another state. Instead, the beneficiaries of that real property in another state must request that the court where the real property is located appoint a personal representative. This is called an ancillary administration.
A claim must be filed against the estate of the deceased person in the probate proceeding within the later of three months after notice to creditors was first published or 30 days after the personal representative notifies a known creditor.
A personal representative has the authority to represent the interests of all persons affected by the estate proceeding. Since a creditor of a deceased person cannot make a claim against a person who owes the deceased money, it is the responsibility of the personal representative to take steps to collect the deceased’s assets, not just for the beneficiaries but also for the deceased’s creditors.
Personal Representative’s Compensation
The personal representative is entitled to receive compensation from the estate assets for his or her services. The Florida statutes provide that a certain commission will be assumed reasonable for ordinary services rendered to an estate by the personal representative. This commission is based on the value of the probate assets and any income those assets earn. The commission is calculated as follows:
- at the rate of 3 percent for the first $1 million
- at the rate of 2.5 percent for all above $1 million and not exceeding $5 million
- at the rate of 2 percent for all above $5 million and not exceeding $10 million
- at the rate of 1.5 percent for all above $10 million.
In addition to this commission, a personal representative may be allowed additional compensation for extraordinary services, including:
- the sale of real or personal property
- bringing suit for or against the estate
- adjusting or paying taxes
- carrying on the deceased’s business
The compensation for ordinary services (or for extraordinary services) may be increased or decreased by the court. To determine whether to do this for such services, the court must consider these factors:
- the promptness, efficiency and skill with which the administration was handled by the personal representative
- the responsibilities assumed and the potential liabilities of the personal representative
- whether the estate benefited or suffered from the personal representative’s services
- whether the administration of this service was complex or simple
The attorney for the personal representative is also compensated from the estate assets for his or her services. Florida has a statute that allows for reasonable compensation for services provided to an estate by the personal representative’s attorney. This compensation for the attorney in a formal estate administration is based upon the value of the probate assets and all income earned. The compensation is computed as follows:
- $1,500 for estates having a value of $40,000 or less
- an additional $750 for estates having a value of more than $40,000 and not exceeding $70,000
- an additional $750 for estates having a value of more than $70,000 and not exceeding $100,000
- for estates having a value in excess of $100,000, at the rate of 3 percent on any amount above this up to $1,000,000
- at the rate of 2.5 percent for all above $1 million and not exceeding $3 million
- at the rate of 2 percent for all above $3 million and not exceeding $5 million
- at the rate of 1.5 percent for all above $5 million and not exceeding $10 million
- at the rate of 1 percent for all above $10 million
In addition to reasonable compensation for ordinary services, the attorney for the personal representative is allowed reasonable compensation for an extraordinary service, including
- the purchase or sale of real property by the personal representative
- involvement in a will contest
- will interpretation
- a proceeding for determination of beneficiaries
- a contested claim
- apportionment of estate taxes
- any litigation by or against the estate
The attorney is also entitled to compensation for preparation of the estate’s federal estate tax return. Once the gross estate is determined and the return is prepared by the attorney, a fee of one half of 1 percent of the value up to $10 million and one fourth of 1 percent of the value in excess of $10 million of the gross estate is considered reasonable compensation for attorney’s services.
The compensation for ordinary services or for extraordinary services may be increased or decreased by the court, in which case the court considers the same factors it does in deciding whether to adjust the amount of compensation for a personal representative.
Alternatives to Formal Probate
There are times when the value of a deceased person’s estate does not warrant a formal probate administration. These instances are as follows:
- Summary Administration. The Florida Legislature recently increased the fair market value of the assets which can be the subject to a summary administration. Effective for decedents dying after January 1, 2002, the circuit judge is authorized to grant a summary administration when the fair market value of property subject to probate administration does not exceed $75,000. An order of summary administration may also be obtained to confirm the title for a protected homestead passing to a surviving spouse or to an heir-at-law regardless of its value. A protected homestead is the decedent’s residence where he intended to permanently reside at the time of his death. A summary administration is also allowed for a protected homestead because the deceased’s creditor claims cannot attach to this real property. If a petition for the summary administration for assets presently having a value of less than $75,000, or for assets exempt from creditor claims is filed with the clerk of the court by all the beneficiaries and the surviving spouse, the circuit judge may order the immediate distribution of this property to the beneficiaries named in the will. An order of summary administration will not be granted by the circuit judge if the decedent has known creditors which the beneficiaries have not agreed to pay. An exception is when no creditor timely files a claim after receiving notice of the opportunity to file a claim and the three month period has passed since a notice to creditors was published. Another exception would be if the two year statute of limitations for creditors to file claims has expired.
- Disposition without Need of Administration. The Florida statutes allow for the distribution of a deceased’s assets without probate when the value of the deceased’s nonexempt assets does not exceed the preferred funeral expense of $6,000 and the reasonable and necessary medical and hospital expenses of the last 60 days of the deceased’s last illness. If the circuit judge is satisfied after reviewing the petition and the copies of the attached receipts for the paid funeral and medical expenses, the judge may authorize the payment of the proceeds of the bank accounts to the person who paid those expenses.
- Automobile. If there is no need for probate except for the disposition of an automobile, the beneficiary named in the deceased’s last will and testament can apply at the county tax collector’s office for the Florida Department of Motor Vehicles to issue a new motor vehicle certificate of title in the name of the beneficiary. In addition to presenting the deceased’s motor vehicle certificate of title, a sworn copy of the last will and testament must be presented with an affidavit that the deceased is not indebted to anyone.
If a person died without a last will and testament, an heir of the deceased owner can apply to the Department of Motor Vehicles for a new certificate of title with an affidavit that the estate of the deceased is not indebted and the surviving spouse and the heirs have amicably agreed to this title transfer.
This page is excerpted from the Florida Senior Legal Guide.