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Why Wait To Pay Creditors In Florida Estates?
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.
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