Whether an individual dies testate (with a will) or intestate (without a will), there are always expenses and obligations that must be paid by the estate. Whether the estate is in Palm Beach, Miami or Fort Lauderdale, each estate has funeral costs, there are probably some medical expenses, there may even be back taxes that must be paid. Those expenses and obligations are paid prior to the beneficiaries receiving their share, if any, of the remaining estate. Florida Statute 733.707 governs the order of payment:
Class 1 – Costs of the estate administration and fees of the personal representative and attorneys.
Class 2 – Reasonable funeral expenses, not to exceed $6,000.
Class 3 – Debts and taxes that have preference under federal law.
Class 4 – Reasonable and necessary medical expenses of the last 60 days from the illness of the decedent. This includes compensation of professional individuals caring for the decedent.
Class 5 – Family allowance. This allowance can be up to $18,000 and provides the spouse and family with some money to live on during the probate administration.
Class 6 – Past due child support that is court ordered.
Class 7 – Debts that come about after death from the continuing on of decedent’s business.
Class 8 – All other claims, including judgments and decrees.
It is up to personal representative to properly ensure that the expenses and obligations get paid. After the personal representative pays a specific class, if there is not enough remaining money to pay the creditors of the next class, then those creditors are paid ratably in proportion to their claims. If an estate cannot pay all of its claims through Class 8, then it becomes insolvent. If the estate becomes insolvent, the beneficiaries receive nothing. For example, an estate may only have enough money to pay the costs of the probate administration from Class 1 and Class 2 expenses for the funeral home in Aventura. This means, if properly paid, no money will be left for the other classes or beneficiaries.
Formal Florida probate, both testate and intestate, is a long and complicated process. It can often be difficult to determine if you as a creditor or beneficiary received your rightful share of an estate. If you live in the West Palm, Fort Lauderdale, or Miami-Dade area and feel you received your improper share of an estate, the probate litigation team at Chepenik Trushin will help you obtain the proper legal relief. Please feel free to contact us for an initial first consultation.