In Florida there are well-established probate laws that place a high burden upon the person who undertakes the job of administering the estate of someone who has passed away. The estate administrator, or “personal representative” (which you may recognize as the “executor” or “executrix”) acts as a “fiduciary” to the decedent’s beneficiaries and creditors. Under Florida law, there is no higher level of responsibility than to act as a fiduciary for someone else or their estate.
What does this mean? All personal representatives, must act with the utmost integrity. They are in a position of trust and must act accordingly. Meaning, they must act in the best interest of the person or estate they are representing. Undertaking the job of a personal representative comes with knowing that their work will be reviewed and questioned, and that’s the best case scenario.
The worst case? Personal representatives can be sued and held liable for financial damages they may cause to the estate and its interested parties, if they are held to have breached their fiduciary duty.
What is Marshaling the Assets?
In Florida, and within 60 days of the issuance of the Letters of Administration, each personal representative is required to prepare and file with the probate court an inventory of all the assets, and their date of death value, owned by the decedent at the time of their death. If a Personal Representative fails to locate a piece of personal property, or track down all the real estate owned by the person who has died, then they can be held personally responsible for that failure. Consequently, most Personal Representatives are careful to make sure that they’ve made every effort to find and collect (and, in some cases, had appraised) all of the decedent’s assets.
It’s in the best interests of the beneficiaries and creditors that they do so. It’s also in the best interests of the Personal Representative, personally.
The process of collecting all of the assets, and preparing the estate’s inventory, is called “marshaling the assets.” And it can be confusing, complicated, and messy.
Marshaling the assets of an Estate is much more than collecting and organizing it for a garage sale.
Finding The Paperwork
Once the Personal Representative has been appointed by the probate judge and is issued the “letters of administration”(the official document that acknowledges the right for the personal representative to administer the estate), one of the first steps is to gather all of the documentation that he or she can find regarding the decedent’s property holdings (real and personal), as well as documentation about any debts (credit card, medical, or otherwise) and other business matters. The Personal Representative has the legal right to search not only the decedent’s residence but also their boat, office, storage room, gym locker, and place of business. The Personal Representative may have a duty to talk with the decedent’s lawyer, accountant and stock broker, as well, in order to track down asset information.
All sorts of documentation may be collected in this process, including things like:
Pension plans
IRAs
Income tax returns for the past few years
Marriage certificates
Trust agreements
Life insurance policies
Divorce documents
Car titles
Bank statements
Insurance policies (health, life, car, long-term care, funeral plan, etc.)
Partnership agreements
Stocks and bonds
Corporate documents
Deeds of trust
Real estate titles
Leases
Certificates of Deposit.
The Safety Deposit Box
As part of gathering all this paperwork, the Personal Representative will often find documents referencing a safety deposit box at a local bank or credit union. Often, there will be more than one name listed with the bank has having the legal right to access that safe deposit box: both the decedent and another person (or several people). Husbands and wives are both listed as having joint access, for example, in many situations. Parents and their children, likewise, may all have legal access to the same safe deposit box.
The bank is legally required to allow anyone to access that safe deposit box at any time; if one of the people listed as having access dies, even the one paying for it, that won’t matter. Two things are important here for the Personal Representative.
- First, it’s important for the Personal Representative to work with bank officials to gain fast access to the box in order to check for any burial plot deeds or funeral instructions — or even another will. This can be done by working with the financial institution officers, who can open the safe deposit box for the Personal Representative in order to remove a will as long as there is an agreement allowing the person to have access or an order from the court.
- Second, the Personal Representative will need to check to make sure that everything in that safe deposit box is collected and inventoried for the estate. If someone has accessed the safe deposit box after the passing of the decedent, or in the months prior to their impeding death, then an investigation into the possibility that valuables belonging to the estate need to be retrieved from that person may be warranted.
Only Probate Assets Should be Marshaled for the Estate
Not everything that is owned by the decedent is part of their estate. There are certain kinds of property that legally are NOT “probate assets.” The Personal Representative cannot marshal these assets for the estate; they are not assets to be inventoried because they are excluded under the law from the probate process.
What are non-probate assets? As a general rule, they are based upon contracts that by the terms of the agreement keep the asset out of probate. Here are three common examples of assets that are NOT to be marshaled by the Probate Representative:
1. Life Insurance Policies
Life insurance policies, by definition, are contracts between the insurance company and its policy-holder to pay a certain amount of money to the selected recipient (beneficiary) upon the death of the policy-holder. The decedent’s passing creates a contractual duty upon the insurance carrier to pay money to the listed beneficiary. This money is never an asset of the estate, unless the estate is a named beneficiary or there is no beneficiary listed on the policy.
2. Jointly Owned Bank Accounts
Many checking accounts are held in the names of more than one person. A married couple may have a joint bank account. A parent and their college-age child may have a joint checking account, used primarily by the student for college expenses. Elderly parents and care-taking relations, likewise, may find a joint checking account to be a great convenience.
The contract between the bank and its account holders will define the rights that they have to the account. If all the signatories to a bank account are listed with the bank as joint owners, then the passing of one of them doesn’t impact the right of ownership held by the other(s) under that contract. They own what’s in the account both before and after the date of death, according to the contract with the bank. The amount held in that account never becomes a part of the estate. These are known as “Joint Tenancy with Right of Survivorship” accounts.
3. Retirement Accounts
Often a retirement account or pension plan is based upon a contract whose language clarifies that ownership passes to named beneficiaries if the retiree (or pensioner) passes away. This is similar to the legal provisions of a life insurance policy: by the contractual terms, the monies are to be paid to the person designated to receive them, and the estate is never involved.
However, just because these kinds of non-probate assets were owned by the decedent, doesn’t mean that the Personal Representative can quickly mark them off his or her list of tasks. It is important that the Personal Representative make sure that they really ARE non-probate assets. For instance, not every bank account with multiple signatures is a JTWROS account — and if it’s not, then that account may be an estate asset even if more than one name appears on the checking account.
Difficulty Finding the Estate Assets?
The Personal Representative’s job of finding and collecting estate assets can be complicated and overwhelming at times. Different kinds of assets mean different tasks to perform and some institutions don’t make it easy to gather assets. Most financial institutions act as if they are in the business of just collecting assets and not in the business of giving them back.
A lot of times, the easy job for the Personal Representative will be to secure property (like storing the car in a garage or other safe location). Another relatively simply task: finding the decedent’s wallet and safeguarding it along with the decedent’s drivers license, passport, voter’s registration card and credit cards.
However, if the decedent ran a business or owned a partnership interest in a going concern, then the job of marshaling estate assets can become very complex. Sometimes, the Personal Representative may even have to take on the role of manager, running that business until things can be sorted out.
Why? The Personal Representative has the job of protecting the value of these estate assets. Part of that job means making sure that the business keeps turning a profit, or that the operations don’t go idle because the decedent isn’t there to run things.
It is in these more complex situations of marshaling the assets that an experienced probate lawyer can be of great help to the Personal Representative. Not only can a probate attorney assist the Personal Representative in protecting these complicated estate assets, the lawyer can work fast to block any attempts by others who may be interfering or attempting to influence the business operations during the administration process.
A good piece of advice if a loved one has passed away and there may be an issue with their assets, is to at least talk with a Florida probate lawyer to learn about your rights. Most probate lawyers, like Larry Tolchinsky, offer a free initial consultation (either over phone or in person, whichever you prefer) to answer your questions.
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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.
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