***You can watch the YouTube Video here: https://www.youtube.com/watch?v=rESeKaRNj08&t=15s
First off, if you are going through this difficult time, I hope that you find my information helpful and fulfilling your needs. If you are just curious, I hope that this is informative and PLEASE read my future Blog and watch my soon coming YouTube video of “How To Avoid Probate”. It could really help those that you love and care about through the difficult process of losing you.
Basically, Probate is the legal process of making sure that the estate left behind by someone who passed away is used to pay anyone owed money, and that money/assets left over is distributed to those who should get it.
The debts and debtors could be known/easily found OR, they could be unknown (even to the person who passed away). The most common “known” debtors are mortgage, homeowners’ insurance, IRS, an HOA, car payments, car insurance, utilities (electricity, water/sewage, cable, gas, etc), credit cards, hospital, etc. These are usually fairly easy to find because mail/email will have bills/invoices/statements of money owed. BUT, there could be “unknown debtors”. So the court wants a Notice To Creditors to be filed in a “local” newspaper for TWO weeks. I put quotation marks around “local”, because it doesn’t have to be the local newspaper with the largest readership. So, it doesn’t have to be the Miami Herald, the Sun Sentinel, or the Palm Beach Post. It just has to be run in a local newspaper that is accepted by the courts. Once this has run for Two weeks, any creditors have 90 days to come forward and make a claim. So, basically, the Notice To Creditors is what “starts the clock” on the Probate case. This is “why” most probate cases take 4-8 months to get finished.
In another video, for “Do It Yourselfers” we will cover A) the legal threshold for DIYers and B) where the three Palm Beach County courthouses are that you could file Probate and what they will tell you to do. NOTE: PALM BEACH COUNTY COURTHOUSES do NOT want everyone who wants to file their own Probate case, to just come on in. There are almost 500 probate cases filed each and every month. That is not a typo. Close to 500 New probate cases each month! They have thresholds set up. If the Estate has More than $75,000 in what’s called “non-exempt” assets, Probate will be REQUIRED to be filed by an attorney. The court doesn’t want to get bogged down with thousands of cases due to inexperienced individuals slowing things down. The simple truth is, with that many cases filed EACH AND EVERY MONTH, each case isn’t a name. It’s a number. And the court wants that numbered case to move quickly and efficiently so that they can keep ALL the cases moving quickly and efficiently. IMPORTANT NOTE: A Florida Homesteaded home/condo property does NOT count in that minimum threshold of $75,000 requiring an attorney for what’s called Formal Administration of Probate. In other cases, a family member or friend will file the Petition for Probate and move the case forward without an attorney. That will be decided by a county judge.
If you will be using an attorney, talk to the attorney about unsecured debt like credit cards and car payments (unsecured means no collateral was put up or signed up against the loan. It is merely a “signature loan” that the debtor promised to pay). An attorney will give you good advice on WHO to pay, WHEN to pay, and HOW MUCH to pay. He/she may even be able to work out a settlement amount on those kinds of debts. No promises, but it is a possibility in their scope of work.
In another Blog, we will discuss the 4 Types of Probate in Florida and you can see A) if you need to file and B) if so, which type might be what you need.
Most people, when they think of Probate, think of the one that’s called Formal Administration. Not everyone needs to file for Formal Administration. In Florida, if the estate has less than $75,000, Formal would not be needed. If there is a house/condo etc. involved, and it is Homesteaded, and the REST of the estate value is less than $75,000, again Formal wouldn’t be needed. If the real estate is co-owned (like a married couple), the house should automatically go to the surviving spouse and that value wouldn’t be added to the estate value. Life Insurance or annuities don’t usually count either because they usually have beneficiaries listed so the proceeds (the money that would be paid out) would go directly to that beneficiary and wouldn’t be counted as part of the estate.
As part of this process, you will hear the word asset a lot. Like whether there is more than $75,000 in assets in the estate or if the estate has assets of less than $75,000 or the estate has $X amount of assets. So, what is an asset? Basically, an asset is anything of value that can be sold for money. Some examples are money, property (land and buildings), equipment, collectibles, amounts to be received. Other less common assets are patents, trademarks, copyrights, and even computer programs created. An interesting story was about the home run baseball that Barry Bonds hit to break the career total. The baseball would be worth a LOT of money. The IRS’ attitude was that AS SOON AS someone got that ball, they owed taxes on it because it had value. Luckily, the IRS doesn’t want to look horrible so they didn’t push the case because it was National news and involved “America’s pastime”. But, as soon as the fellow that got that baseball sold that asset, he owed taxes to the IRS. So, is Uncle John’s fully restored 1955 Chevy Bel Air an asset? If it’s sellable, it’s an asset. Old Baseball card collection? Yup. That’s an asset too. Usually, it’s always a good idea to make a list of assets and a list of debtors to be paid. If it is a Formal Administration of Probate case, those will be required as part of the process.
AS ALWAYS, I would HIGHLY recommend getting a free consultation with an attorney who specializes in Probate. Just an FYI, they also usually specialize in Estate Planning, which is used to proactively avoid the need for a future Probate case. This can be a LOT cheaper than going through the Formal Probate process, so it’s a good idea to talk to this type of attorney BEFORE death, rather than have your family deal with the headaches and expense of Formal probate if needed. I know several attorneys who specialize and am happy to recommend them to you.
ANOTHER HIGH RECOMMENDATION: Try your absolute best to get all family members to agree. Even if you don’t want to agree. The reason is that legal battles cost money. A wise and kind attorney told me many years ago, “in most cases, there is a pile of money on the table. As the lawyers go back and forth, they are billing for their time. And they get their money from that pile of money on the table. The size of that pile doesn’t change, but who gets it sure can change.” So, if you don’t want attorneys getting richer, I would HIGHLY recommend to try your darndest to be agreeable, and help all the family to agree, so that the money stays within the family instead of lining litigation attorneys’ pockets. If you are not the best peacemaker in the family, I’d recommend going to the one who is the best peacemaker, and ask them to use their gift to help the family.
SO, WHY SHOULD YOU CARE ABOUT FILING FOR PROBATE?
The bottom line is, if there is money or anything of value to be inherited, the creditors can come after the recipients for any debt owed. The IRS, local county tax collector, HOA, are the most obvious but there are other potential debtors too. As part of a Formal Administration process, not only would you submit a list of known creditors (you usually make a list based on payments made out of bank account(s) and bills received in the mail), but you would file a Notice To Creditors in a local newspaper to “notify” any unknown potential creditor that the deceased has passed away. They then have 90 days in order to file a claim. This notice needs to be run in the local newspaper for Two weeks. This is VERY important because this “starts the clock”. After the 90 days, the Probate case can move forward. For this reason, Probate cases in Florida usually take 6-12 months (IF not contested). I ALWAYS recommend that families try to get along and not fight/contest. A wise attorney once told me, in most court battles, there is a pile of money on the table. The amount on the table doesn’t change. BUT, the more that attorneys are fighting, more of that money goes to the attorneys than to the parties involved in the case. So, unless you want to give attorneys money, I’d HIGHLY recommend trying to work things out.
*LEGAL DISCLAIMER: I AM NOT AN ATTORNEY. I am a Certified Probate Expert who has experience with Probate real estate and I receive personal satisfaction out of helping people through difficult times in whatever manner they may need. If you do need an attorney, I have several very kind, very knowledgeable, and very experienced Probate attorneys that I can recommend. I say kind because you want someone who is sensitive to what you are going through, but also, you want an attorney who has an attitude of service and helping you. You don’t want to be with a big firm that has 5 people working on your case and their basic attitude is “that’s not my problem” or “we don’t get paid to do that”. You want an attorney who is knowledgeable and experienced, but you want one who helps facilitate and helps you get things done. Not all large firms are that way, but I would counsel to make a decision based on how helpful you feel that they will be to you. It is a difficult time. You want people who are sensitive to your needs and helpful to get you through this process as easily as humanly possible.