What Are the Rights of Creditors and Surviving Family Members in Probate?

After a loved one passes away, it can be a very emotional, overwhelming time. The last thing on the family’s mind may be settling the deceased’s estate. But unfortunately, the clock is ticking and certain actions must be taken promptly to make sure that beneficiaries and creditors get what they are entitled to. 

Whether there was a will or not, if there are any “probate assets” in the deceased’s estate, then the courts will be involved in overseeing the collection of those assets, paying the debts of the deceased, and distributing anything remaining to the beneficiaries. So, whether you are the estate’s representative, a creditor, or a beneficiary, you need to be aware of these deadlines and requirements.

No matter the size of the estate or the creditor’s claim, you need to act fast to avoid making mistakes down the road. And in almost all probate cases, Florida law requires you to be represented by an attorney. That is why you should contact the experienced and knowledgeable probate lawyers in West Palm Beach at Doane & Doane. We at Doane & Doane know precisely how the probate process works, and we can help you satisfy all of Florida’s legal requirements and preserve all of your rights. We invite you to contact us to learn more about how we can meet your probate needs.  561-656-0200 or fill out our online contact form . 

In this blog, we will discuss the basics of the probate process and who the key players are. We will also explain the specific rights and responsibilities of creditors and family members through the probate process.

Probate is a court-supervised process that is used to collect the assets of a deceased person (also called a “decedent”), to pay the deceased’s debts, and then to distribute any remaining assets to the deceased’s beneficiaries. This process only applies only to “probate assets,” which are those assets that were owned solely by the deceased at the time of death, or that were owned by the decedent and one or more co-owners without a special provision that triggers automatic succession of ownership at death.

As part of probate, the person in possession of the deceased’s will must deposit it (the original, no photocopies) with the proper court within 10 days of learning of the death of the decedent . Admitting the will to probate in court is necessary to pass ownership of probate assets to the decedent’s beneficiaries.

Importantly, even if there is no will, probate is still necessary to pass ownership of probate assets to the decedent’s “heirs,” who are people related to the deceased and described under Florida law.

And who is responsible for correctly following these procedures? Someone called the personal representative (otherwise called an executor or administrator in other states). If there is a will, it will likely name who will serve as the personal representative; if not, the court will select someone to be in charge of the estate.

As described above, one of the main purposes of probate is to ensure that the decedent’s debts are paid in an orderly fashion. It is a thorough way to wind up the deceased’s financial affairs — so long as certain procedures are followed properly. That process starts with the creditors being given notice of the death of the decedent.

Since Florida requires the assistance of an attorney with this, then the attorney of record for the personal representative will take care of sending out the notices to creditors. That is what your probate lawyer in West Palm Beach can do for you if you serve in that capacity.

Delivering that notice begins the countdown for the time period when creditors have an opportunity to file a claim in the probate estate. What kind of notice you receive depends on what kind of creditor you are:

1. known or reasonably ascertainable creditors — these creditors are entitled to direct notice of a Florida probate proceeding; the personal representative must use diligent efforts to determine who these creditors are and must promptly give notice to them;

2. all other creditors — other creditors get notice by publication in a local newspaper; the personal representative must publish this notice to creditors for two weeks. 

After these notices are given, creditors hoping to get money owed to them repaid must file a claim with the probate court within 30 days of receiving a direct notice or within three months after the first date of publication in the newspaper of the notice to creditors, whichever is later. However, known or reasonably ascertainable creditors who did not receive a direct notice to creditors have two years from the decedent’s death to file a claim.

Now, i t is the creditor’s responsibility to file a claim with the court within these time periods ( however , an extension may be granted upon grounds of fraud or estoppel). If not filed on time, the creditor’s claims will be barred forever, and the creditor cannot look to the personal representative or to the decedent’s heirs for reimbursement.

Let’s say you’re a creditor who has properly filed your claim on time. Now what? Well, once the period for creditors to file their claims has expired, the personal representative (or any other interested person) is then permitted to file objections to any of those claims. If an objection is filed, the creditor must file a separate independent lawsuit against the estate to pursue the claim. Creditors have 30 days — counting from the date the objection was formally filed — to take that action. If they don’t, then their claims may be barred by the probate court.

It should be reassuring to know that a creditor who files a claim in probate court must be treated fairly as a person interested in the probate estate until the claim has been paid, or until the claim is determined by the court to be invalid.

For all claims that are deemed to be valid in Florida, the personal representative will have one calendar year to pay the money that is owed to those creditors, starting from the first date of publication of the notice to creditors. But again, under certain circumstances, this time frame may be extended.

As described above, another main purpose of probate is to distribute any remaining assets to the deceased’s beneficiaries after all valid debts of the deceased have been paid or otherwise disposed of. In a will, the decedent can name the beneficiaries whom the decedent wants to receive the probate assets. Usually, those beneficiaries include the deceased’s surviving spouse and children.

What if the deceased tries to cut them out of the will? They may still be entitled to receive probate assets from the estate. Contrary to what you may see play out on television, Florida law protects the decedent’s surviving spouse and certain surviving children even if the decedent’s will gives them nothing.

For example, a surviving spouse may have rights in the decedent’s “homestead real property” (which is a person’s main residence, including the house, land, and outbuildings). The surviving spouse will have the use of the homestead property for life, and the deceased’s descendants would only be allowed to receive the homestead property after the surviving spouse dies. Instead of this option, the surviving spouse also has the right to receive an undivided one-half interest in the homestead property — so long as certain procedures are timely followed.

Other than the homestead options, a surviving spouse may have the right to claim an “elective share” from the decedent’s probate estate. That share is approximately 30% of all of the decedent’s assets (including non-probate assets).  

As for the deceased’s children, one can disinherit adult children. However, Florida law bars you from completely disinheriting a minor child. Nor will Florida allow you to leave your minor child homeless. Similar to what’s mentioned above, Florida’s homestead laws disallow you to leave your residence to someone other than your minor child or surviving spouse.

In case you have children after you have written your will and you fail to update it before your death, those children will get a cut of your estate even if you wished to keep them out of it.

There are two more important rights that a surviving spouse and/or the decedent’s children may have that bear mentioning here:

1. the right to receive a family allowance to financially support them before final distribution of the estate assets is made; and

2. rights in exempt property that will be paid to them instead of to creditors in satisfaction of the deceased’s debts. 

Of course, a spouse may waive these rights in a valid pre- or post-nuptial agreement.  

Finally, if you die without a will or trust, your family has surviving rights under Florida law. Therefore, your estate (after satisfaction of debts) will automatically pass to your surviving spouse and children.

Again, in most circumstances, Florida law requires the assistance of an attorney throughout the probate process. Even when a lawyer is not required, there are so many technical rules and pitfalls that it can be very difficult for the non-lawyer to navigate it without professional, experienced guidance like the kind you will receive at Doane & Doane . 

We welcome you to call us at Doane & Doane, where you will speak with an attorney who knows and thoroughly understands the law. Please give us a call at 561-656-0200 or fill out our online contact form  and schedule a free consultation with one of our probate lawyers in West Palm Beach. We will be able to offer you guidance on how to proceed to protect your rights throughout the entire probate process.