Florida law gives creditors a statutory period to lay claims against a deceased’s estate during probate. The purpose is to verify the validity of the claims and permit legitimate creditors to collect from the decedent’s estate.
Is there an order of payment preference? Who gets paid first from an estate in Florida? Read on to find out.
Who Gets Paid First From an Estate in Florida? – As Provided by Law
When a petition for probate is submitted to the court, the judge will appoint a personal representative (or “executor”) to administer the deceased’s estate and conduct the distribution of assets to their rightful heirs.
One of the personal representative’s duties is to notify all creditors with an interest in the estate, responding or objecting to claims based on their validity. Once all claims are verified, they must be paid based on their statutory priority.
Florida Statutes §733.707 (1) specifies that “the personal representative shall pay the expenses of the administration and obligations of the decedent’s estate in the following order:
Class 1—Costs, expenses of administration, and compensation of personal representatives and their attorneys’ fees and attorneys’ fees awarded under s. 733.106(3)
Class 2—Reasonable funeral, interment, and grave marker expenses, whether paid by a guardian, the personal representative, or any other person, not to exceed the aggregate of $6,000
Class 3—Debts and taxes with preference under federal law, claims pursuant to ss. 409.9101 and 414.28, and claims in favor of the state for unpaid court costs, fees, or fines
Class 4—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—Family allowance
Class 6—Arrearage from court-ordered child support
Class 7—Debts acquired after death by the continuation of the decedent’s business, in accordance with s. 733.612(22), but only to the extent of the assets of that business
Class 8—All other claims, including those founded on judgments or decrees rendered against the decedent during the decedent’s lifetime, and any excess over the sums allowed in paragraphs (b) and (d)”
What If the Value of the Estate is Not Sufficient to Pay all Creditors? – Insolvent Estates in Florida
Florida Statutes §733.707 (2) provide that “after paying any preceding class, if the estate is insufficient to pay all of the next succeeding class, the creditors of the latter class shall be paid ratably in proportion to their respective claims.”
The term “ratable” refers to an estimated or apportioned distribution. In such cases, the personal representative must pay the latter creditors’ tiers in proportion to their respective claims.
Please note that not the personal representative also has the power to object to unfeasible or invalid creditors’ claims. If necessary, the personal representative can work with an expert probate attorney to:
Perform in-depth research of each claim
Check the actual balance on each debt
Verify the validity of any fees involved
Determine whether a creditor incurred unethical or wrongful actions to collect the owed amount
Convince or force the creditor to surrender the right to collect (if applicable)
Handling a Deceased’s Debt in Florida Probate – Your Florida Probate Lawyer is Willing to Help You Succeed
Business and Immigration Lawyer for Entrepreneurs, Start-ups, Small Businesses and Foreign Investors. Romy Jurado grew up with the business dream of becoming a lawyer and starting her own business. And today, she is living proof that dreams really do come true. As the founder of Jurado & Associates, PA, a specialty business, real estate, and immigration law firm, Romy's practice focuses primarily on domestic and international business transactions, with a strong emphasis on company formation, stock sales, and assets, contract drafting, and business immigration. In 2011, Romy earned her Juris Doctor degree from Florida International University School of Law. She is fluent in two languages (English and Spanish) and is the proud author of Starting a Business in the US as a Foreigner, an online business guide. Call 305-921-0976 or email [email protected] for a consultation.
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