What Creditors Get Paid from a Florida Probate Estate?
When a person dies, they often leave unpaid bills. The decedent’s probate estate is responsible for paying those bills from the available assets of the estate. This requires creditors to present a valid claim to the personal representative or administrator of the estate. And even then, there may not be sufficient assets to pay all valid claims.
How Creditor Claims Are Presented
The personal representative must publish a “Notice to Creditors” informing any known or unknown creditors that an estate has been opened. This notice starts the clock for creditors to file their claims. If the estate directly served a creditor with this notice, the creditor has just 30 days to present their claim. Otherwise, the creditor normally has 3 months from the date the Notice to Creditors was first published to file a claim.
The personal representative may file an objection to any creditor claim. This objection is filed with the probate court and served on the creditor. The creditor can then seek to prove its claim through the litigation process. There are special rules that may apply to certain types of creditor claims, such as secured debts like mortgages or tax debts owed to the government. But in general, the creditor has the burden of proving it had a valid debt and presented a claim that complied with Florida’s probate rules.
Order of Payment
A Florida probate estate is considered “insolvent” if its assets are insufficient to pay all valid creditor claims. In the event of an insolvent estate, Florida law specifies an “order of payment.” This is basically a ranking of various kinds of creditor claims from highest to lowest priority.
Class 1 claims, i.e., those that must be paid first, include the costs of administering the estate itself, including any fees owed to the personal representative or their attorneys. This is followed by Class 2 claims, which cover up to $6,000 owed for the decedent’s reasonable funeral or burial costs.
The remaining creditor claims are classified as follows:
- Class 3 — Any debts or taxes with preference under federal law, such as unpaid income tax or money owed as reimbursement to Florida Medicaid for services rendered to the deceased;
- Class 4 — The decedent’s final medical expenses, i.e., any reasonable and necessary costs for care or hospitalization provided up to 60 days before death;
- Class 5 — A family allowance of up to $18,000, paid to the decedent’s surviving spouse or dependent children;
- Class 6 — Unpaid court-ordered child support debts;
- Class 7 — Debts incurred by the decedent’s business after their death; and
- Class 8 — All other claims.
All claims within a higher class must be paid in full before the estate can pay any claims in the next-lower class.
Contact a Davie Creditor Lawsuit Lawyer
Creditor disputes can delay the final administration and distribution of a Florida probate estate. That is why if you are involved in such a matter, it is important to get qualified legal advice from a Davie creditor lawsuit attorney. Contact Valero Law today at 305-607-7011 to schedule a free consultation. We serve clients in Davie, Broward County, Coconut Grove and Miami-Dade County.
Source:
leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0733/Sections/0733.707.html
