Probate as a Puzzle: Understanding What You've Been Told to Avoid

The probate process in Florida has garnered quite a negative reputation as lengthy, expensive, and sometimes bitter. In some instances, that reputation is deserved. Then again, just one bad experience can sully a lot of people’s opinions, especially when that is all you have heard. Understanding your options and methods for planning now to make it easier (and less expensive) for your loved ones later is a great gift.

What is Probate?

Although a lot of people think probate is a bad thing, not everyone knows what probate is. Technical definitions of probate involve proving the validity of a will (or handling what happens if no will was written). But essentially, probate is court oversight of the distribution of a person’s estate after that person—the decedent—dies. This oversight includes collecting assets, paying debts, and distributing assets to heirs.

When an estate utilizes the probate process, the court issues orders that allow the estate to be distributed. Especially important, these orders tell the people who are holding assets what to do with them—who has authority to act and who receives things. An order might name someone to serve as personal representative (called executor or executrix in other states); determine that property is homestead property; admit the will (if there is one); or begin the administration, thus directing how assets are to be distributed.

Another part of the probate process is publishing and serving formal notice for debts. If the person died owing money, those creditors need to be notified. Florida has a formal system in place to make sure the notice takes place. But more important to many families is that Florida formally ranks which creditors get paid first. Thus, before writing checks to pay debts, it's often wiser to talk to an attorney first.

Will My Estate Need to be Probated?

The answer to that question echoes the answer many attorneys have for most questions: "It depends." The type of probate someone needs depends entirely on the decedent’s unique situation. This, of course, is why individualized estate planning is best: people’s situations differ; so too, then, do people’s options for their estate plans differ.

In Florida, some estates do not need court oversight at all. For a small estate with almost no assets—that is, less than $2,000.00 which is used to cover funeral expenses or final medical bills—the estate can possibly be handled through a Disposition Without Administration. Other estates might not require court oversight if all of certain types of assets are titled in a trust. Other estates, through careful planning during life in how assets and beneficiaries are designated, have nothing that needs court oversight for distribution. But if that planning has not taken place, and you have more than $2,000 in assets, then yes, likely your estate will need to be probated. (And this does not even address issues involved if you have minor children.)

Is Probate Expensive?

For those estates that do need oversight (that is, those that need to be probated), two types exist in Florida: summary administration and formal administration. For both of these, Florida statutes require that you hire an attorney. Costs with filing with your county and with filing public notices (and formally serving notice) can easily approach or exceed $500.00. And that's before you pay the attorney at all.

The complexity of the administration (summary typically being less complex than full) will drive the expenses in working with your attorney. Whether you need a summary or a full administration will depend on factors such as the size (value) of the estate and where property is held or owned. Yes, some of those formal administrations can drag out for years. And if beneficiaries disagree to the point of bringing lawsuits, the probate process can be tangled and tumultuous. But that tends to be the exception and not the norm.

Many attorneys set a minimum fee to handle a probate case, billing hourly for work in excess of that minimum. Others bill according to a percentage of the estate. Although probate isn't always highly expensive, often what you pay for probating an estate will exceed what clearer estate planning would have cost.

Of course, most people rarely encounter the probate system. Many people never will. And for those who do, likely they are directly involved in a probate only once or twice. Thus, Florida's requirement that an attorney be involved makes sense.

Do I Need to Avoid Probate?

Situations vary. Some individuals or families will benefit greatly from using a revocable living trust. Some people merely need guidance on designating beneficiaries and using particular types of accounts. Others will find it is better to accept a straightforward probate of the estate later than to structure assets in a particular way now. In other words, each person and family is different. Regardless, if you have questions about how probate might affect you and your family, it is best to speak with an estate-planning attorney. Plan now to—hopefully—reduce surprises and frustrations later.