Probate is essentially the supervised legal process for closing out the estate of the deceased according to the laws of the state in which they resided. In Florida, there are two main types of probate, formal and summary administration, and there is also a process called disposition without administration. The latter two pertain to small estates or those whose assets are exempt from probate.
Probate will occur in one form or another when a person dies, but many people do not talk to their loved ones about this. The surviving family of the decedent are often surprised by the complexity of the process, and they may also be dismayed by how lengthy and expensive probate can be.
For Tampa and Clearwater residents, getting one’s house in order is not just a matter of setting aside gifts and inheritances for loved ones, but also knowing what is to come and planning ahead. Family discussions should involve talking about who will be responsible for overseeing the process and how to possibly simplify the process and minimize taxes.
The duties of the personal representative
When a person draws up a will, they generally name a personal representative (PR) who will oversee the formal administration of the estate. The named PR petitions the court to validate the will and enforce its provisions through the swearing-in of the PR. The PR may have to post bond to serve.
If there was no will, the surviving spouse will have first rights to serve as PR, followed by the preference of most of the heirs. If neither of these options is available, the judge will choose a PR for the estate.
After swearing in, the court issues Letters Testamentary granting the PR authority to handle probate, which includes taking inventory of the estate and appraising assets, giving notice of the decedent’s death, and receiving creditor notices, paying all federal and state inheritance or estate taxes, distributing the remaining assets as directed before closing of the estate.
Death taxes and minimizing probate
There are a number of forms that the PR must fill out that include:
- final individual income tax return
- income tax return for estates and trusts
- gift tax return
- estate tax return on the gross estate
It is possible to shorten probate to avoid some of these death taxes. Some methods include funneling assets out of the estate by establishing a trust where the grantor can access the funds, setting up joint ownership for real estate, investments and bank accounts, or creating beneficiary designation on annuities, retirement accounts, or life insurance policies.