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PROBATE ARTICLES
WHAT IS PROBATE ANYWAY?
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The legal definition of probate is “a court-supervised process for identifying and gathering the assets of a deceased person (decedent), paying the decedent's debts, and distributing the decedent's assets to his or her beneficiaries.”
I find that most people who ask to have probate consultations were not aware that they even needed to be involved in a probate. The most common statement made by most individuals who consult with me is “well I have a power of attorney so I do not have to go through the probate process.”
A power of attorney ceases to exist the moment the individual giving the power has passed away. What this means is that the power of attorney dies with the person who gave the power.
Probate is a legal process only available for the estate of individuals who have passed away. Simply because an individual has passed away does not mean that they qualify for the probate process. Typically, probate is the process in which assets and debts are administered. If the individual did not have any assets then it is very unlikely that a probate case would even have to be filed with the court.
A majority of the time if an individual only had debts then those obligations die with that person. If there are no assets then the creditors have no recourse. There may be exceptions to this and that is why it is always important to seek legal counsel when it comes to these matters.
When a person dies and has few assets then the estate may benefit from simply having a Summary Administration file. This is an abbreviated version of a formal probate. A formal probate is when you open a probate case for someone who had substantial assets. If an estate is worth more than 75k then it generally qualify for formal administration.
Through the probate process, many things are determined and set the pace of the process. One of the most important facts to remember is if the decedent died with a Last Will and Testament (Testate) or without a Last Will and Testament (intestate).
If a person dies with a Last Will and Testament then essentially the decedent has left a set of instructions for everyone to follow. The Last Will and Testament (if done in compliance with Florida law) will designate a person to be the executor/executrix of the estate. This person will then follow the last wishes of the decent and administer the estate according to the instructions left in the last will and testament.
If a person dies without a last will and testament then Florida law dictates who is designated the “person in charge” also known as the personal representative. This person will then have to adhere to what the Florida Probate Code says must be done. Florida law states who will get to be in charge, who will inherit and who will be paid based on priority.
Often times we find that intestate succession is not what the decedent intended. However, since there was no last will and testament then Florida law prevails. The best way to avoid having your estate fall into the hands of individuals you had not intended to would be to prepare your estate plan. An estate plan begins with a will or living trust. A will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your will must go through your state's probate process before they can be distributed to your heirs.
Another common question asked by probate clients is, how much this will cost me? Unbelievably, some estates will not cost the heirs or personal representatives a dime or the individual may be reimbursed from the assets of the estate for all their expenses and cost. Probate fall into two categories 1) easy or 2) very complex. It is important to seek the advice of a knowledgeable probate attorney. The attorney should be able to provide you with information and give you a piece of mind.
You should always seek the advice of a legal professional that will be able to walk you through this process.
WHO GETS YOUR HOME WHEN YOU'RE GONE?
Prior to 2013 under the existing Florida Homestead Law for Surviving Spouses, a spouse was often left with a life estate in homestead property. A life estate is when an individual is allowed to live in the property for the duration of their life. The life estate is limited to the fact that you can only possess the property but do not own it out right. More often than not the spouse was either not able to afford the homestead or may not have wanted to be responsible to maintain the property for someone else’s benefit.
Florida legislators are trying to alleviate this problem by changing the law to allow surviving spouses to convert the life estate into a one-half tenancy in common. What that means is that the spouse can elect to be one-half owner of the interest that the descendant may have had in the home. The new law allows the surviving spouse to make an election, within six months from the date of death, to take a one-half interest as a tenant in common in the homestead property instead of a life estate.
This one-half tenant in common interest gives the surviving spouse an ownership interest in the homestead property, which allows the surviving spouse to bring a partition action to sell the property. A partition action could be done in one of two ways. A partition can be where a half owner petitions the court to laterally split the property in half. The other and most common partition action is where a party asks the court to force a sale on the property. Typically, this is the most common form of partition used in probate. If the property is sold, the surviving spouse will generally receive one-half of the proceeds of any sale.
Prior to the enactment of the revised Florida Homestead statute, if the homestead was not devised to the surviving spouse in any way then Florida law would permit that the surviving spouse automatically receive a life estate in the property. If there were minor children then the minor children receive a vested remainder in the property. This means that the minor child would be able to own the property once the surviving spouse has either relinquished their rights to the life estate or the surviving spouse has passed away. The life estate interest would not be partitioned, which requires the surviving spouse and children of the deceased to negotiate a sale of the Homestead. If there was no agreement between the children (or their guardian/trustee) then the property could not be sold.
These rules have strained many family relationships especially those that involved spouses in subsequent marriages.
The Florida Principal and Income Act governs the allocation of expenses between the life estate and vested remainder interest (heirs). The surviving spouse is typically responsible for any interest payments on the mortgage, property taxes, property insurance and repairs and the children are generally responsible for principal mortgage payments on the residence and any substantial capital expenditures.
To make things more complicated if the surviving spouse wanted to downsize then the surviving spouse would have to negotiate with the children to allow a sale. As part of the sale, the parties would have to create a formula to determine the value of the surviving spouse’s life estate.
Although there are many benefits to the new law it is also important to note that it is to the disadvantage of the decedent’s minor children in a lot of cases. The law is constantly going through development and restructuring thus making it very complex. Therefore, estate planning becomes trickier with all of the little nuances.
With the new law in place estate planning will require additional planning at the beginning to take into consideration this new contingency. This also leaves room for additional issues to consider during the estate administration process.
ARE YOU THE FORGOTTEN? HOW FLORIDA LAW VIEWS PRETERMITTED SPOUSES
The first time I heard the word pretermitted spouse was in law school. I had never heard the word and needed to get a clear definition of the term if I were ever going to use it in the practice of law. I went to school prior to Google being the source of all information so I researched it in law books. To simplify the definition a pretermitted spouse is a spouse who has been left out of a will.
How do you become the “forgotten?” Typically, this becomes an issue when a person marries after making a will and fails to include the new spouse before passing away. For the most part individuals always think of estate planning as something you can put off until the very end. Unfortunately, none of us are equipped with a timer that will tell us exactly what date and time we will pass. This is how you can become the “forgotten.”
There are some exceptions to this rule. Sometimes married couples have a prenuptial agreement where the intention is spelled out that the spouse is intended to be left out of the will. There are also provisions that can be added to any will that make it clear that the intention is to leave out any future spouse. Then there are those assets that are owned by entities by the entireties, which simply means both spouses own this asset with an undivided 100% interest. An example of this would be a bank account held in the name of the married couple. If one passes away, the other has 100% interest in that account if they are held by entities by the entireties.
If you are a pretermitted spouse or “the forgotten” and none of the above exceptions apply to you then what happens? There are two views on this legal matter.
1. You can be a surviving spouse and have no children or any descendants of the survivor. If the only survivor is a surviving spouse, or if all the lineal descendants are also lineal descendants of the surviving spouse and the decedent, then the surviving spouse receives the entire estate of the decedent.
2. You can be a surviving spouse where there are no surviving descendants from both decedent and the surviving spouse. If there are descendants of the decedent who are not also of the surviving spouse, or if there are descendants of the deceased, but the surviving spouse has descendants not also from the decedent, then the surviving spouse receives one-half of the intestate estate.
The estate of any person carries so many intricacies such as homestead rights, elective share, and election against a will, family allowances, social security death benefits, and marital agreements. Each one of these issues has a specific way that Florida distributes the property of the estate. Moreover, some of these issues have a statute of limitation. That means that the clock starts ticking immediately and you may be running out of time to protect these rights. Do not become one of the “forgotten.”
If you are a pretermitted spouse, you should know your legal rights and how the law protects your interest in the probate estate.