Handling The Assets Of Loved Ones Who Have Passed Utilizing Probate
When a loved one passes away, it is a difficult time as there is a great deal of emotions, loss, and picking up the pieces that takes place. While seemingly not a good time, there is another task that is involved and should occur immediately, the distribution of the loved ones assets. The distribution of assets can take many steps and occur through different mechanisms.
One of the processes is through the use of the court system in divvying up the property of the loved one. The process is known as the probate process and it is not as simple as it may seem. First, it is important to note the probate court is not limited to matters of the decedent’s asset, also known as the decedent’s estate. It also handles matters for individual deemed incapacitated such as elderly individuals with severe cognitive decline brought on by a medical condition (e.g., dementia, alzheimer’s, etc.).
However, for our purposes, we will focus solely on the distribution of a loved one’s assets of his/her estate. It is often a lengthy process that many individuals are unequipped to handle on their own. At SG Law Group, we understand the ins and outs of probate and guide our clients every step of the way to ensure a smooth process.
As many disputes and unforeseen consequences may arise, it is important to have trusted counsel by your side. Our probate attorneys provide not only sound legal advice, but also peace of mind. Our clients can be confident that their loved one’s estate is being handled properly and efficiently.
What Is Probate?
Probate is the utilization of the court system’s legal process of assessing a deceased person’s estate, ensuring that their debts are paid assets, and distributing their assets to their rightful heirs or beneficiaries.
What Assets Are Processed Through The Probate Process?
The assets passed through Probate Process are those owned by the decedent prior to their passing that did not include a beneficiary designation. Assets placed in a trust are no longer owned by the loved one prior to their passing and would not be part of the probate process. Of course, testamentary trusts are separate matters and are discussed separately.
Does Probate Have Different Levels?
Depending on your state, it may. For instance, there are two primary forms of probate in the State of Florida: Formal Administration and Summary Administration.
What Is Formal Administration?
Formal Administration is the traditional probate proceeding in Florida and the most common. This form of probate requires that the heirs petition the court to open the estate and designate a personal representative. A personal representative is the person that will carry out the will (if one was prepared) and handle the estate matters during the probate process. In many instances, the will may already appoint an Executor to oversee the estate proceedings, and while the Executor may be appointed the personal representative, there is no guarantee as it is ultimately up to the Court to decide. In the case of descendants who pass without a will (also known as intestate), a personal representative must still be selected and a determination of heirs must be determined in accordance with the laws of the state. Furthermore, Formal Administration proceedings can usually take anywhere between six to nine months. However, every estate is different, and depending on the complexity of the estate, the Formal Administration process may continue on for much longer.
Although every estate is different, there are certain steps that usually take place in every Formal Administration process. In Florida, the following occurs:
- Depositing a Will, if available, and Death Certificate with the Clerk: By doing so, the Clerk of Courts is alerted of the deceased’s passing and the probate process begins.
- Filing a Petition for Formal Administration: This document is a formal request to the Court to open the deceased’s estate, and usually tells the Court about the decedent – their date of birth, date of passing, beneficiaries, and an estimated value of their estate.
- Appointing a Personal Representative: As mentioned above, the personal representative is a court-appointed individual who is responsible for overseeing the estate during the probate proceeding and dispersing the assets as written out in the will.
- Notifying the Heirs and Beneficiaries: Once the estate has been opened and a personal representative has been assigned, it may be necessary to send letters of notices to the decedent’s heirs and beneficiaries listed in the will so they are aware of the probate proceedings and have the opportunity to object to the will. If no will is present, the personal representative must ensure the laws of state, or states are following to ensure property distribution of the assets in accordance with the laws of intestacy.
- Notifying Potential Creditors: Once the estate has been opened, it may require the personal representative to publish or serve notices to the deceased’s creditors that the person has passed. Once the creditors have been notified, they have 30 days from the date they were served with the notice or 90 days from the publication of the notice to file any claims against the estate.
- Inventorying of the Assets: It may be important to evaluate the assets to determine a precise valuation of the estate. This information is then filed with the Court and sent to the beneficiaries.
- Responding to Creditor Claims: If creditors have made timely claims against the estate, their claims will either be paid or objected to if the personal representative identifies their claim to be a bad debt. If the latter occurs, the creditor can file an independent action against the estate or the claim will be abandoned.
- Handling the Surviving Spouse’s Election Rights: Each state has laws regarding the elective share of spouses. For example, Florida Law provides surviving spouses with certain benefits and rights. Therefore, if there is a surviving spouse, they have the right, but not the obligation, to exercise these rights. It is important to give them the opportunity to do so before the assets are distributed out. Though, in certain instances, a pre- or post- nuptial agreement may have negated such rights, it is important to confirm whether such an agreement was executed.
- Dispersing the Assets: Once all claims have been paid, the personal representative can begin dispersing the rest of the assets according to the terms of the Will or the law in the case of intestacy. Once each beneficiary has received their share, they will be asked to sign a receipt acknowledging that they received the inheritance. These receipts will then be filed to the Court.
- Closing the estate: Once all the assets are distributed out to the beneficiaries, the personal representative can file a petition to close the estate. This will end the probate process.
What Is Summary Administration?
Summary Administration is essentially a shortened form of probate in Florida that does not require the appointment of a personal representative. This type of proceeding can be significantly shorter and less expensive than Formal Administration. However, not every estate can qualify.
There are two ways in which estates can qualify for Summary Administration in Florida:
- The decedent has been deceased for more than two years, OR
- The estate’s assets do not exceed $75,000.
What Does It Mean To Be Intestate?
If a person dies intestate that means they died without a will. When this happens, the deceased’s assets will be dispersed in accordance with Florida Intestacy laws. These laws set forth a formula to distribute the deceased’s assets to the decedent’s heirs. If the decedent has no heirs, their estate will be dispersed to the state. The outcome of who gets what is based on the rules applied by the particular state. In Florida, the process involves utilizing the concept known as per stripe and, coupled with the anti-lapse statute, assets are passed to descendants of the deceased. If the decedent has no descendants, the assets then flow backwards to the decedent’s antecedents starting with the parents and siblings until an heir or heirs are determined, should they be in existence. However, the most common heirs are spouses and children. Again, if no heirs are determined, the estate would pass to the state.
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