Boca Raton Estate Planning FAQs
If I am named as Personal Representative of an Estate, am I personally liable for claims of the decedent’s creditors?
Estates that are not required to file a federal estate tax return and are not involved in litigation can usually be closed between six and nine months. For estates that are required to file a federal estate tax return, the estate must remain open for two years. However, some distributions may be made to the heirs and beneficiaries soon after the estate is opened. If no probate is required,what must be done to settle the estate? Estate settlement is the process by which a decedent’s total estate, which includes both probate and non-probate assets, is settled. Even if an estate does not require a probate administration,all estates must be settled. There are still documents to be filed, debts and taxes to be paid and assets to be distributed. Estate settlement involves the following steps:
- Collection of decedent’s assets;
- Payment of debts and claims against the estate;
- Payment of estate taxes, if any;
- Determination of heirs if the decedent died without a will;
- Filing certain documents required under state law, in some cases to clear title to real property owned by the deceased; and,
- Distribution of the remainder of the estate of those entitled to it.
The personal representative has tobe approved by the court and those who receive property from the estate must be approved by the court. If the personal representative acts improperly, he or she may be held liable for any resulting damages and his or her appointment maybe terminated by the court. Florida law requires that virtually all estates have a probate attorney or probate law firm assist with the estate administration. The Walser Law Firm is available to help with all probate and estate matters to settle an estate. Please feel free to contact a Boca Raton probate attorney at our firm to learn how we can help you.
In Florida if your total assets are less than $75,000 (excluding homestead property) than a summary administration can be utilized whereby a formal probate is avoided. Otherwise, you will need to prepare a trust in order for your assets to be distributed outside of probate court. It’s in your best interest to consult with an attorney to minimize the chance of legal complications in trying to avoid probate.
Generally the answer is “no.” Heirs and beneficiaries can’t be made responsible for your general debts, at least without their consent. Unless the deceased had gifted away his or her assets to someone shortly before dying, or otherwise acted in concert with them to defraud his or her creditors, beneficiaries should not have any liability to the deceased’s creditors just because they are beneficiaries. Of course, the estate may not have anything left for them, but the beneficiaries would not have to pay creditors out of their own pockets. Of course, if the children or beneficiaries took any property or benefits from the deceased or the estate, or had assumed liability for care given the deceased, or guaranteed payment, they could be held liable for some or all of the deceased’s debts separately, not because they are relatives or beneficiaries.
Objections to a decedent’s will must be filed in probate court within a certain number of days after receiving notice of the death or petition to admit the will to probate. Some of the most common objections are that the decedent lacked mental capacity at the time the will was executed; there force or undue influence; the will was forged, or the will was not properly drawn, signed or witnessed, according to the state’s formal requirements.
Probate is usually required in each state where the real property is owned in the decedent’s name, in addition to the home state. After a personal representative is appointed in Florida, a certified copy of the will, if any, at initial probate pleadings as letters of administration appointing the personal representatives, must be submitted to probate in each other jurisdiction in which the deceased owned real property. That separate probate procedure is formally referred to as “ancillary probate.” Some states insist upon the appointment of a personal representative who is a local resident to administer the in-state property. Where the deceased did not have a will, each state will have its own law for distributing the deceased’s real property. The real estate in State A, all might go to the spouse; in State B, it might go 1/3rd to the spouse, 1/3rd to the son and 1/3rd to the daughter; and in State C, it might go 1/2 to the spouse and 1/4 each child. The laws of the state in which the deceased was a permanent resident or “domiciliary” govern who would receive all the deceased’s personal property, wherever it was located, and all the deceased’s real property located within the state. Thus, probate almost always is undertaken in the home state.
Property passing by contract includes life insurance proceeds, IRAs, and employee benefit plan proceeds, such as the proceeds payable under a pension, profit-sharing, or employee retirement plan. These assets pass outside the will to the persons named by the decedent in the appropriate beneficiary designations. Thus, it is important to periodically review the beneficiary designations with respect to these types of assets and to update them as necessary. Property held by the decedent and another person as joint tenants with right of survivorship passes outside the will directly to the survivor. Survivorship assets typically include certain types of bank accounts, certificates of deposit, stocks and bonds, and certain savings bonds issued by the United States Government, such as Series EE savings bonds. All property held in a trust for the benefit of the decedent passes outside of probate. The trust may have been created by the decedent during his or her lifetime for property management purposes or by someone else, such as a parent of the decedent. Trust assets pass under the terms of the trust rather than under the terms of the decedent’s will. It is important to determine the extent of one’s non-probate assets when planning the disposition of one’s property at death. If a substantial portion of the assets are non-probate assets that do not pass under the will, even a well-drafted will may be insufficient to carry out the testator’s intent in disposing of his or her property.
All assets owned by the decedent in the decedents’ name alone, not in joint tenancy, in trust or with a beneficiary designation, are subject to probate administration upon decedent’s death. Real and personal property owned as a joint tenant pass to the surviving co-owners without going through probate. Other types of benefits, such as a life insurance policy or annuity payable directly to a named beneficiary bypass probate. Money from IRAs, Keoghs, and 401(k) accounts transfer automatically, outside probate, to the persons named as beneficiaries. Bank accounts that are set up as payable-on-death account (POD for short) or an “in trust for” account (a “Totten Trust”) with a named beneficiary also pass to that beneficiary without probate. If a living trust holds legal title to some of your property then the assets held by the living trust also passes to the beneficiaries without probate. (The trust is a legal entity which survives you after your death.)
The personal representative (also known as the “executor” or “executrix”, or the “administrator” or “administratix” in other states) is appointed as part of the probate proceeding and has the responsibility for managing the estate through the proceeding, making a list of all the assets and debts of the estate and seeking to carry out the directives of the will. The probate court oversees the activities of the personal representative, and requires that she or he obtain prior permission of the court before certain actions may be taken, such as selling real estate or business interests owned by the estate
The main function of probate is transferring title of the decedent’s property to his of her heirs and/or beneficiaries. If there is no property to transfer, there is usually no need for probate. Another function of probate is to provide for a mechanism for payment of outstanding debts and taxes of the estate, for setting a deadline for creditors to file claims (thus foreclosing any old or unpaid creditors from haunting heirs or beneficiaries) and for the distribution of the remainder of the estate’s property to ones’ rightful heirs or beneficiaries.
Probate is a court-supervised process of distributing property as directed in a will or in accordance with the law if no will exists. Since there is court supervision of the entire process, the heirs/beneficiaries can be assured of a full and fair valuation and distribution of the estate. Probate is necessary whenever a deceased person leaves titled assets in their name alone.