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How Are Creditors Paid During Florida Probate [Video]

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How Are Creditors Paid During Florida Probate

Our Probate Department Chair Carrie Felice talks about how creditors are paid during probate in Florida — Find out more about probate, visit our website 👉 https://www.elderneedslaw.com/probate-lawyer

How probate process works in Florida → https://www.youtube.com/watch?v=NoS5EWUIiyQ&t=2s

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Transcript:

Hi, I’m Carrie Felice, the probate department chair with Elder Needs Law. People often ask how creditors are to be paid from the assets of an estate. When gathering the information to file the probate of your loved one, it is important to ascertain all of the known creditors. All known creditors are served with a copy of the Probate Petition once it is filed with the court and only have 30 days to file a claim. Once the probate petition has been filed with the court, a notice of creditors is published in a newspaper local to the county in which the decedent resided. In the unknown, creditors may file a claim within three months from the publishing of the notice to creditors. Only creditors who file a claim with the court within their designated time period are entitled to be paid from the estate. However, there is an order outlined in Florida Statutes of who gets paid first, and depending on whether there are sufficient non exempt assets in the estate will determine if in which creditors are paid. The personal representative of the estate is entitled to a fee that is equal to 3% of the compensable value of the estate. This personal representative’s fee is the first disbursement to be made out of the estate assets, then the compensable value of the estate is an amount equal to all of the non exempt assets included on the estates inventory. Exempt assets, such as the homestead property in most circumstances and certain items of personal property are exempt from creditor claims and are not included in the compensable value of the estate. After the personal representative speed is paid, then attorney fees and other costs of administering the estate, like the court filing fees, the publication costs for publishing the notice to creditors, postage, things like that are either paid or reimbursed to whomever had already paid them. Next, the first $6,000 of the funeral expenses are reimbursed to whomever paid them. At this point, all government debt must be paid taxes with federal tax debt having priority and reimbursements to Medicaid and other public assistance. Next, reasonable and necessary medical and hospital bills that were incurred during the last 60 days of the deceased’s last illness must be paid. Medical and medical debt that accrued before the last 60 days will be paid later, with other creditors like credit cards and things like that. Next, a family allowance of up to $18,000 can be paid to the decedent surviving spouse, or children the decedent was supporting or obligated to support at the time of their death. Any or reducing child support obligations will be paid next, any costs incurred in wrapping up an unincorporated business or venture of the decedent would be paid after that. And then finally, before any disbursements to the beneficiaries are made, all the other creditor claims are paid, which would be older medical debt, credit card debt, things like that. So creditors who file a timely and valid claim with the probate court are entitled to be paid from the estate assets. However, as you can see, depending on the amount of assets in the estate, there’s no guarantee that there’ll be sufficient assets after all of the other obligations of the estate are met to satisfy all or even any of the creditor claims. So if you have more questions or need assistance in navigating the probate process for your loved one, please call us and set up a probate consultation today. Thank you