Selling a house you are inheriting in Florida? Probate property is a gift and a challenge. You’ve received an asset worth thousands of dollars, but it is attached to hiring an attorney and months (if not years) of court litigation.
When selling a probate home, there can be sibling disagreements, complex legal issues, legal delays, creditor disputes. All the while, you keep payingtaxes, insurance, utilities, debt payments, regular maintenance, and necessary repairs and renovations. The houses are often full of furniture that need to be removed. Inherited real estate is frequently far away: you didn’t choose the location.
If you are inheriting a house, the first step is understanding the probate process of inheriting property. This arms you with the knowledge to reach the end of the house sale (and the accompanying compensation!) as fast as possible.
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What is Probate?
Probate is the legal process that occurs after a person (“the decedent”) passes away. Probate is the administration of the “estate” (the sum of the decedent’s assets). Probate has two main objectives: (1) debts of the estate are settled, and (2) ownership of property is transferred to heirs and beneficiaries.
Probate includes proving a will is valid (where one exists), identifying the decedent’s property, appraising the property, paying outstanding debts and taxes. If some property remains, it is distributed in accordance with local state law. Probate property includes real state, personal property, as well as financial instruments (stocks, bonds, ownership in business).
The Five Stages of Florida Probate
Probate has five stages: filing a petition and appointment of the personal representative, notice to creditors and heirs, inventory and appraisal of probate property, and transfer of title in accordance with will or laws of intestacy where no will exists.
Stage #1: Filing The Petition.
Probate litigation is instituted by either: (1) an executor (or personal representation) named in the will applying for the court to validate the will; or (2) when there is no will, a person petitions the court to be named executor. The probate petition is filed in the county where the decent lived or owner property. Where there is no will, a spouse or adult child of decedent normally becomes the legal representative of the estate.
Upon approval by the court as the estate representative, written “Letters of Administration” are provided evidencing legal authority to act as personal representative. The personal representative has a multitude of duties after appointment. In Florida, these include:
- Identifying and gathering the decedent’s assets that belong to the estate;
- Diligent search to identify heirs, beneficiaries, and creditors;
- Notice to beneficiaries and creditors;
- Paying valid creditor claims, funeral expenses, federal and state taxes;
- Pay expenses of administering the estate;
- Distributing remaining assets to beneficiaries;
- Closing the probate estate.
Stage #2. Notice To Creditors and Beneficiaries.
The personal representative must provide proper notice to anyone with an interest in the estate (creditors and beneficiaries). Notice allows family members to object to the petition and creditors to make a claim on estate assets.
Some states require probate proceedings to be published in local newspapers. Written notice of probate litigation must be provided to known beneficiaries and creditors. After appropriate notice, personal representatives should file document proof. This creates the requisite “evidence” should a notice objection arise.
States allow family members to contest the will or personal representative. Grounds to challenge a will include improper execution, undue influence, fraud, or duress. In Florida, beneficiaries have 90-days to contest the will after notice.
Stage #3: Payment Of The Estate’s Debts, Taxes, and Expenses
A decedent’s debts do not disappear – they must be paid before you inherit any property. Probate property is commonly to satisfy outstanding debts such as mortgages, back taxes, city violations, credit cards, HOA fees. Relatives are not personally liable for the estate’s debts. However, inheritance only occurs where enough assets existed to pay off the decedent’s debts.
According to Debt.org, not every asset is subject to the probate:
Not every asset someone owns is up-for-grabs when they die. The law divides the deceased’s assets into exempt and non-exempt categories, with the primary distinction being that exempt assets can’t be liquidated to cover debts.
The list of exempt assets varies by state, but two major assets are exempt everywhere: retirement savings and life insurance policies. Those two assets can be distributed to beneficiaries without regard to debts owed by the deceased.
Some states designate other entities as exempt so it’s wise to check the laws where you live. Florida, for example, says the surviving spouse or children has the right to exempt household furniture and appliances up to a value of $10,000 as well as two automobiles.
There is a time limit for creditors to make claims. Time period vary from state to state, but creditors must make claims within a defined timeframe. In Florida, creditors have 90-days to file a claim again the estate after notice is delivered. Personal representative may challenge creditor claims after they are filed.
Stage #4: Legal Title In Property Transferring In According With Will And/Or Local Inheritance Laws.
Once approved creditor claims are satisfied, the personal representative petitions the court to transfer remaining assets to beneficiaries in accordance with the will or local laws. The probate court will issues a written order transferring the assets.
With regard to real property, the personal representative may draw up new deeds of ownership or liquidate the property and distribute the resulting funds. The transfer of property can function differently there exists surviving spouse. According to SF Gate:
In most jurisdictions where both spouses hold title to real property either in joint tenancy, community property or by tenants in the entirety, the property is transferred by operation of law without a probate. If there is a surviving spouse who was not named on the original deed, the deceased spouse’s will determines the distribution of the property. If there is no will, then the laws of intestate succession will determine who is entitled to the property.
Stage #5: Closing the Probate Estate
Finally, there is a formal closing of the estate. The conclusion of probate litigation includes:
- Executor preparing a final account and petition for final distribution;
- Hearing before the court with notice to interested parties;
- Creditors are paid and assets are formally distributed;
- Executor files a “closing statement” or “closing affidavit” establishing that all assets were properly distributed.
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Call Us (954) 676-1846 Send Text Send Text Send Text or Fill Out This Form For Your FAIR Offer.
