The Personal Representative’s first order of business upon being appointed to administer a deceased person’s estate is to ensure that the decedent’s mail, etc. is being forwarded to him/her. The biggest reason for this is so that the PR is kept abreast of the decedent’s obligations to third parties (i.e. phone, power/ lighting, credit card, etc. companies). The decedent’s legitimate debts must be paid out of his/her estate to the extent that funds are thus available before any distributions of probate assets are made, or else the PR may be held personally liable for these debts (i.e. made to pay them himself/herself).
Florida Statute 733.707 provides the order in which the decedent’s debts and/ or expenses associated with the administration of his estate must be paid. All such obligations are divided into “classes” and each creditor in a given class is entitled to full satisfaction before another class is considered. If at any point the funds contained in the decedent’s estate are extinguished, all unpaid creditors in classes not yet reached – and the decedent’s intended beneficiaries/heirs – receive nothing.
- Class 1: The costs/ expenses of administration, and compensation for the PR and the PR’s attorney.
- Class 2: All reasonable funeral, interment and grave marker expenses, whether paid by a guardian, the PR or any other person, not to exceed the aggregate of $6,000.00.
- Class 3: Any unpaid federal taxes, and reimbursement for Medicaid or public assistance payments made on behalf of, or paid to, the decedent.
- Class 4: All reasonable and necessary medical and hospital expenses of the last 60 days of the last illness of the decedent, including compensation of persons attending the decedent.
- Class 5: A family allowance.
- Class 6: Any arrearage from court-ordered child support.
- Class 7: Any debts acquired after the decedent’s death by the continuation of his business, but only to the extent of the assets of that business.
- Class 8: All other claims, including those founded on judgments and/ or decrees rendered against the decedent during his lifetime.
Notice to Creditors in Florida
The PR must use “due diligence” to give actual notice of the probate proceeding to known or reasonably ascertainable creditors, so as to allow them sufficient opportunity to file claims against the decedent’s estate (if any). In Florida, such notice is provided via personal service and/ or publication of a “Notice to Creditors,” which acknowledges the decedent’s death, the administration of his estate and provides information on the process by which a creditor may file a claim against the estate. The PR must formally and individually serve each known creditor of the decedent. A creditor is “known” if he is referenced in the decedent’s files or if a bill, etc. is sent to the decedent and forwarded to the PR. Additionally, the PR must publish the Notice to Creditors in a widely-circulated public newspaper in the counties in which the decedent was domiciled, resided, maintained property, etc. The Daily Business Review is an appropriate medium for this purpose in Broward and Miami-Dade Counties.
Time Limit For Creditor to File A Claim
The time limit for filing a claim for a known or reasonably ascertainable creditor who has been served with a notice to creditors is the later of three months after the first publication of notice to creditors or 30 days after the date of service of the notice to creditors on the creditor.
Further, creditors do not need to file a claim to enforce a mortgage or other liens on the property of the decedent (unless the mortgagee will not be paid off from proceeds of the sale of the property). Finally, and one of the most often asked questions about a decedent’s debts, regardless of whether or not a probate has been opened in Florida, unfiled claims against the decedent’s estate are barred two years after of the date of the death of the decedent. This limitation applies in all administrations, including summary administrations.
Related:
- Can Creditors Force The Sale Of The Decedent’s Home In A Florida Probate?
- What Happens If There’s Not Enough Money To Pay Creditors of A Florida Estate?
- What Is The Deadline for A Creditor to File a Claim Against An Estate?
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