The probate process is often necessary for sizable estates in Florida. Those with property worth thousands of dollars (or more) and/or real estate in their names when they die will usually need to have their assets pass through probate court before their loved ones and named beneficiaries can receive any of that property.
One of the reasons that probate oversight is necessary during estate administration is to help ensure that the personal representative of the estate properly resolves someone’s responsibilities and financial obligations instead of just quickly transferring the assets they owned when they died to their beneficiaries. The debts someone owes when they die can, therefore, have a major impact on the outcome of the probate process.
Debt delays asset distribution
Creditors owed money by the deceased individual that follow the appropriate processes to make a claim related to those debts in probate court will probably wait months to receive payment. After receiving notice or the publication of notice in a local newspaper, creditors have 90 days, in most cases, to file a claim in probate court. Given that creditors have several months to make a claim, the unpaid financial obligations someone has when they die tend to increase how long it takes to resolve the probate process.
Debt can minimize or eliminate someone’s legacy
Credit card balances, student loans and even medical debt incurred in the last days before someone died will all require repayment using estate assets. Technically, those financial obligations are a top priority for the estate, meaning that beneficiaries don’t necessarily inherit anything unless there are assets left over after fulfilling someone’s financial obligations.
If the personal representative erroneously distributes assets and does not pay creditors as they should, they could face personal liability for those unpaid amounts. Both those tasked with estate administration and those hoping to inherit from an estate may benefit from understanding how debts affect the probate process. Personal representatives may have financial liability for mistakes, while beneficiaries may have unrealistic expectations they need to release.
Learning more about the factors that influence the value of an estate and someone’s claim to an inheritance may benefit those who are estate planning, as well as those who are navigating the probate of a loved one’s estate.
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