For those of you who’ve had family members pass away in Florida, you may have experienced being appointed to serve as the “executor” or “personal representative” of a Florida probate estate. Those of you who have served in this role may realize that there is much more to it than one might think.
The Business Aspects of Opening a Florida Probate
One analogy that opening a Florida probate estate and serving as a personal representative, is like running a business makes perfect sense for the following reasons:
1. In a Florida Probate, the Deceased Person’s Assets Must Be Located, Inventoried and Accounted For By The Personal Representative On Behalf Of The Beneficiaries.
When a loved one passes, things can start getting complicated in a hurry even if they passed away with a valid last will and testament in Florida. It’s hard to believe, or maybe not, but it is common for adult children to start bickering over assets they sometimes attempt to access mom or dad’s home to secure certain belongings. This is where the Personal Representative’s role begins. The Personal Representative should also make a written list of all assets just in case there are questions about what happened to certain items? It is not really that they are personally liable for every item but they are liable as the “Manager” of the estate and an appointee of the Probate Court.
2. In a Florida Probate, the Personal Representative Is Accountable (To The Court AND The Beneficiaries) Concerning The Handling or Mishandling Of The Assets.
Although the personal representative is not technically given authority by the court until they are “appointed”, they are well advised to be the first person on the scene if possible to take charge of the assets, and this does not mean distributing them unless everyone agrees. Depending upon the tone of the family, they should consider changing the locks in order to control the assets. The same advice applies to cars, boats, bank accounts, business assets, etc. The personal representative may be held accountable to the other beneficiaries if substantial assets go missing, so it is important to be proactive.
3. In a Florida Probate, The Personal Representative May Be Obliged To Address Disputes Between Beneficiaries (stake holders) and May Even Be Entailed In A Lawsuit.
Disputes among beneficiaries are very common, and often the Personal Representative is involved or caught in the middle. In these circumstances, a Personal Representative can be very instrumental in resolving rather than heightening family disputes. Estates are often devoured by legal fees due to endless legal conflicts and the Personal Representative can be the voice of reason.
4. In a Florida Probate, The Personal Representative Is Responsible As A Decision Maker For All Other Issues The Arise and Must Confer With The Probate Attorney On Legal Matters.
In a Probate, the Personal Representative is the chief business decision maker. While the Probate Attorney will generally make all decisions concerning the legal matters, the business decisions will typically be carried out by the Personal Representative, perhaps after conferring with the Probate Attorney. Business decisions would include paying expenses, locating assets, accessing accounts, opening an estate account, selling assets and coordinating the filing of estate tax returns in cooperation with the estate accountant.
5. In a Florida Probate, The Personal Representative May Become Involved In The Negotiation of Creditor Claims and Assuring That All Assets Are Ultimately Distributed Pursuant To The Estate And Court Documents.
Part of the Florida probate process involves publishing a Notice to Creditors and it is up to the creditors to respond. Generally, often the probate attorney will negotiate directly with the creditors and will work closely with the personal representative to determine which claims will be paid and which will be denied. The approach and strategy as well as the level of involvement of the personal representative will vary depending upon the jurisdiction. The probate court will ultimately order the distribution of the assets according to the will, if there is one, or if not then according to the state laws. In most cases, it is up to the personal representative to carry out the court’s order by cutting the checks.
So, now you know…if you’re ever appointed to this role, you’re essentially being directed to open and operate a business for a period of time that can last for years. Did I mention, just running a business, the personal representative is generally entitled to reasonable compensation. Of course, this entire process can be avoided through the prudent use of a revocable living trust…review prior article on avoiding probate in Florida with a Florida living trust and common misconceptions.
This is an update to our article that was originally published on November 19, 2015.
Steven J. Gibbs, Esq.