creditor - Law Office of James W. Martin, P.A.

When Does A Trust Avoid Probate In Florida: Never?

Law Office of James W. Martin, P.A. Team — Mon, 29 May 2017 19:49:00 GMT

People often create revocable living trusts in Florida to avoid probate. And some of those people actually transfer assets into the trust to fund it. And it’s true that the trust’s assets are not assets of the probate estate when the person dies. But probate is still required for another reason: clearing possible claims of creditors.

You see, in Florida, revocable living trusts are liable for the claims of creditors of the probate estate. In addition, creditors have two years to file claims if there is no probate proceeding. The probate proceeding claims process reduces the time to file claims to just 3 months after notice to creditors is published. That’s why a trust almost never avoids probate in Florida. There is no creditor claims process for trusts, but there is one for probate.

If a trustee ignores this, the trustee could be liable to creditors after distributing the trust. That’s why wise trustees always file a probate proceeding even if the trust is fully funded with all the assets the decedent owned at death.

Why Wait To Pay Creditors In Florida Estates?

Law Office of James W. Martin, P.A. Team — Fri, 18 Nov 2011 20:10:00 GMT

When someone dies in Florida, many families are anxious to pay the creditors. Most people want to pay their debts so it’s a natural thing to want to pay the decedent’s debts as soon as someone is appointed as personal representative to sign on the decedent’s bank accounts. But there’s a hidden problem that Florida estate lawyers know: what if it turns out there’s not enough money to pay all the creditors? In that case, the personal representative might be personally liable for the decedent’s debts.

Florida law provides that creditors are entitled to be paid before beneficiaries. It also provides that if there is not enough money to pay all creditors in full, then they are to be paid pro rata. That is, they get paid based on the size of their debt compared to the total debt of the estate. This means that if the personal representative pays out say $10,000 in claims and then finds there are $100,000 in total claims but only has $50,000 left in the bank account, the personal representative might be personally liable for the unpaid claims.

So how does a personal representative protect itself? By following the creditor claims process for Florida estates. First, the Florida probate lawyer will publish notice to creditors in the newspaper. Then, the personal representative will undertake a search for creditors and will serve copies of that notice to creditors on all possible creditors. Generally all claims must be filed within 3 months after the date of first publication, so in just 3 months the personal representative will know the total of all claims and be able to pay them using the funds available.

Something else to keep in mind is that generally only creditors who file claims with the court are entitled to be paid in Florida probate. There are exceptions, such as estate administration expenses and fees, but bills that are sent to the decedent are not claims and are not to be paid unless claims are filed with the court.

Probate in Florida can be simple and easy, but the rules must be followed in order to protect the personal representative from personal liability. The Florida probate lawyer can provide advice on these matters.

What Is A Creditor Of A Florida Estate?

Law Office of James W. Martin, P.A. Team — Sun, 22 May 2011 20:05:00 GMT

The Florida Probate Code generally requires that creditors file claims with the probate court within just three months after notice to creditors is published by the personal representative of the decedent’s estate. If the claim is not properly filed on time, then the personal representative is generally not required to pay the creditor.

Of course, there are exceptions in all cases, which is why the creditor of a Pinellas County decedent should engage a Pinellas County probate attorney to advise the creditor and prepare the statement of claim in the probate estate proceeding.

Stop The Debt Collector Of The Dead

Law Office of James W. Martin, P.A. Team — Thu, 01 Jan 2009 20:16:00 GMT

The NY Times reported (You’re Dead? That Won’t Stop the Debt Collector) on 3/3/09 how a certain debt collector collects from grieving families the debts owed by the deceased even though the family members are not legally obligated to pay. I don’t know about other states, but debt collectors should think twice before calling a decedent’s family member in Florida. Florida Statutes Section 559.72 makes it illegal to “willfully engage in other conduct which can reasonably be expected to abuse or harass the debtor or any member of her or his family.” The comments posted to the NY Times article suggest that calling a family member to seek payment of their deceased’s debt, for which the family member has no legal obligation to pay, is abusive. And the Florida law has teeth: up to $500,000 for statutory damages in a class action suit. Plus, the debt collector could lose its license to collect debts in Florida altogether. So, here’s a message to all debt collection companies on behalf of all Florida family members: “Don’t call us, we’ll call you.”

Debt collectors need to be careful when contacting decedent’s family members in Florida.