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Who Gets Paid First From an Estate in Florida?

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Tampa Probate Lawyer / Blog / Legal / Who Gets Paid First From an Estate in Florida?

Who Gets Paid First From an Estate in Florida?

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Administering a Probate Estate in Florida: Duties and Order of Payment

Upon death, an estate undergoes probate, where a personal representative—commonly referred to as an executor—is appointed by the court to manage the decedent’s estate, addressing all assets and liabilities. If the decedent has passed away intestate, lacking a will, the court is tasked with identifying legal heirs and directing the settlement of the estate, since obligations such as debts and taxes persist beyond death.

The executor is charged with the due diligence of locating all potential creditors to settle the estate’s debts, who are given a statutory three-month period to file claims. In Florida, surviving family members typically hold no liability for debts that are exclusive to the decedent. Florida Statutes §733.707 outlines a specific sequence for disbursing payments from the estate, which includes:

  1. Reimbursement of the executor’s administrative expenditures and legal fees, as per Section 733.106(3).
  2. Funeral expenses, capped at $6,000, shouldered by the executor or guardian.
  3. Settlement of federal debts, including income and estate taxes, along with repayments to government programs like Medicaid.
  4. Medical expenses incurred during the final 60 days of the decedent’s life.
  5. Provision of up to $18,000 for a surviving spouse or dependents.
  6. Clearance of any outstanding child support arrears.
  7. Debts acquired for the decedent’s business pursuits post-mortem, as stated in Section 733.612(22).
  8. All other admissible creditor claims.

Procedures When Estate Assets Are Insufficient

It’s possible for an estate to be insolvent, where liabilities surpass assets. Under such circumstances, priority is given according to the statutory payment order, and some creditors may not receive full repayment.

Distribution to Beneficiaries

Once all obligations are met, the executor distributes the residue to the beneficiaries as delineated in the decedent’s Will. Transference of property titles or deeds of distribution are executed to convey ownership to the rightful heirs. For bank assets, the executor must provide the bank with a certified death certificate and letters of administration to re-title the accounts to the beneficiaries.

It’s imperative to note that executors are bound by the terms of the decedent’s will and are without authority to alter beneficiary entitlements or designate new heirs. All beneficiaries are to be duly informed, as deviations from the will’s provisions could lead to legal challenges.

Conclusion:

The role of an executor in Florida carries considerable responsibility, requiring precise and lawful management of the estate’s settlement. Executors are strongly advised to seek legal counsel from a qualified estate attorney to ensure compliance and proper administration.

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