Costs associated with the probate administration process can add up quickly. So, it’s not surprising that so many people create their estate plans with probate avoidance in mind.
One of the most common questions received from individuals in the planning stages is “how much does my estate have to be worth to go through the probate process?”.
How much does my estate have to be worth to go through probate administration in Florida?
While the value of an estate can have an effect on the manner in which it is settled in Florida, it is not so much the worth of the estate that determines whether it is administered through the probate courts, but rather the nature of the assets that make up the estate itself.
Generally speaking, in Florida, there are three main ways in which a person’s estate may be administered or settled after their death. They include (1) estates comprising only of assets that do not go through probate simply by their nature, (2) estates that don’t qualify for the probate process (also known as disposition of assets without administration), and (3) probate administration. As such, certain assets, regardless of their value, may never be administered through the probate courts.
There is one important instance, however, when the value of an estate does have an effect on its administration. For those estates that qualify for probate administration, the value becomes crucial in determining attorney fees. In Florida, probate attorney fees are governed according to statute Fla. Stat. Ann. § 733.6171, although attorneys are not bound to these statutory fee limits. These fees range from $1,500 for smaller, simple estates to percentages of larger estates.
Probate Avoidance Planning
But again, regardless of the value of an estate, the manner in which an estate is settled all depends on the type of assets of which it is comprised. Certain assets are designed for probate avoidance purposes in that they may be transferred to a new owner after the original owner passes without approval from the probate court in Florida. Examples of such assets include:
- Assets accounted for in an Inter Vivos or Living Trust.
- Property owned jointly with others, such as a home owned by joint tenants with rights of survivorship or by a married couple (tenants by the entirety). This also includes jointly-owned banks and other financial accounts.
- Assets that specifically name the intended beneficiary, such as “pay on death” financial accounts, retirement accounts, or life insurance policies.
For a more in-depth review of these options, check out our article on Ways to Avoid Probate in Florida.
Settlement without Probate Administration
An estate that contains assets not designed to avoid probate, may still be settled outside of the probate court administration despite there being a Last Will & Testament.
Usually, a probate case may not be necessary if final expenses (such as funeral costs, certain medical expenses, etc.) are more than the value of the assets of the estate that will be administered through the probate court. In such cases, no property owned by the deceased person will have to be administered through the probate court.
According to Fla. Stat. 735.301, bypassing the probate court can only occur when the deceased person did not leave any real estate property and the only remaining assets do not exceed the amount of the final expenses or are exempt from creditors. The purpose of such a law is to avoid unnecessary delays in administering smaller estates and unnecessary depletion of the court’s resources.
The third manner in which an estate may be settled in Florida is through administration in the probate court. This involves a formalized proceeding in which a personal representative or executor nominated in the decedent’s Will petitions the court to be formally appointed so that they may carry out the wishes stated in the Will.
It should be noted that an estate may be administered through the probate court with (testate) or without (intestate) a Will. However, when a Will is present, Florida law requires that anyone who is in possession of such Last Will & Testament of a deceased person must file it within 10 days of the person in possession becoming aware of the deceased person’s passing.
The court will then determine if the Will is valid to proceed with the probate case. If the Will is deemed valid, then it will be administered in accordance with its terms. If the Will is deemed invalid, then the administration will be according to Florida’s intestacy laws.
After the personal representative is appointed, the beneficiaries, heirs, creditors, and other interested parties are given notice and an opportunity to object to the various requests of the personal representative.
Ultimately, the court will issue Letters of Administration affording the personal representative authority to carry out the testator’s (deceased individual) wishes and to settle the estate under the court’s supervision. After gathering and accounting for all assets, paying off debts and taxes, as well as, distributing assets to various heirs, the personal representative submits a final accounting to the court that can be objected to by interested parties.
After all assets have been distributed, the personal representative would request that the estate is closed and they are relieved of all responsibilities. This process is known as Formal Administration of an estate and may take from six months to a year to complete.
However, given the cumbersome nature of this process, the probate court in Florida allows for a shortened version known as Summary Administration which applies to smaller estates.
This, perhaps, is another instance in which the value of an estate influences the manner in which it is settled. It is available when the death of the decedent occurred more than two years prior to opening the case or when all the property that would be administered through the probate case is valued at less than $75,000.00 (not inclusive of the decedent’s homestead property).
A petition for summary administration must reflect that the estate qualifies for this type of administration, list all the decedent’s assets, and name all known beneficiaries of each asset.
One of the main differences between these types of administration is that a personal representative is not appointed in a Summary proceeding. The court usually issues an order and then releases the decedent’s property to the appropriate beneficiary.
While the worth of your assets can influence the manner in which your estate is administered in Florida, the primary determining factors remain whether your assets were designed to avoid the probate process entirely, the amount of your final expenses in relation to your assets, as well as, the length of time between your passing and the opening of a probate case.
To ensure that your assets are settled in the manner you choose, it’s imperative that your estate plan reflects these intentions with respect to probate court in Florida. For more information on how we may assist with your estate plan objectives, contact us to schedule a consultation.
Welcome to ASR
Welcome to ASR Law Firm! If you’re seeking a welcoming, friendly, and proactive team to help you with your transactional legal matter, I would be honored to speak with you. Let’s schedule a virtual consultation today!