Can Heirs Be Reimbursed Funds Used To Preserve an Asset of a Deceased?
Full Question:
Answer:
If the will does not specifically provide that it be distributed to the heirs unencumbered, then the inherited interest in the home will be precisely the same interest the deceased held at the date of death. In fact, if in the course of the administration of the estate it should become necessary for the executor to pay accruing mortgage payments in order to preserve the asset, the heirs are responsible to reimburse the estate for those payments. It may also be possible to have an heir agree to a disclaimer of interest if the heirs choose to divide title differently from the ownership shares specified in the will. The answer will depend on the facts involved. Generally, funds used to preserve the asset may be repaid to an executor when paid during the probate process to preserve the asset. Funds used to preserve the asset prior to the opening of an estate are likely governed by contract law principles and notions of equity (fairness), based on the agreement of the parties involved and what the terms for advancing the funds were.
If the decedent has been dead for more than 2 years or the assets subject to probate are less than $75,000 then you qualify under the Florida Probate code for a summary probate process. This small estate administration is called Florida Summary Administration. Once the court enters an order of summary administration, the court order can be used to collect and distribute the money in a bank account or other assets of the decedent.
In other cases, where there are no assets that can be used to pay creditors and all the assets are exempt, or nonexempt assets will be used to pay final exprenses for funeral expenses and reasonable and necessary medical and hospital expenses of the last 60 days of the last illness, or pass outside the probate process, administration can be dispensed with. A CD is often a transfer on death assets that passes outside the probate process when a beneficiary is named with the bank.
Please see the following FL statutes to determine applicability:
735.201 Summary administration; nature of proceedings.--Summary administration may be had in the administration of either a resident or nonresident decedent's estate, when it appears:
(1) In a testate estate, that the decedent's will does not direct administration as required by chapter 733.
(2) That the value of the entire estate subject to administration in this state, less the value of property exempt from the claims of creditors, does not exceed $75,000 or that the decedent has been dead for more than 2 years.
735.206 Summary administration distribution.--
(1) Upon the filing of the petition for summary administration, the will, if any, shall be proved in accordance with chapter 733 and be admitted to probate.
(2) Prior to entry of the order of summary administration, the petitioner shall make a diligent search and reasonable inquiry for any known or reasonably ascertainable creditors, serve a copy of the petition on those creditors, and make provision for payment for those creditors to the extent that assets are available.
(3) The court may enter an order of summary administration allowing immediate distribution of the assets to the persons entitled to them.
(4) The order of summary administration and distribution so entered shall have the following effect:
(a) Those to whom specified parts of the decedent's estate, including exempt property, are assigned by the order shall be entitled to receive and collect the parts and to have the parts transferred to them. They may maintain actions to enforce the right.
(b) Debtors of the decedent, those holding property of the decedent, and those with whom securities or other property of the decedent are registered are authorized and empowered to comply with the order by paying, delivering, or transferring to those specified in the order the parts of the decedent's estate assigned to them by the order, and the persons so paying, delivering, or transferring shall not be accountable to anyone else for the property.
(c) After the entry of the order, bona fide purchasers for value from those to whom property of the decedent may be assigned by the order shall take the property free of all claims of creditors of the decedent and all rights of the surviving spouse and all other beneficiaries.
(d) Property of the decedent that is not exempt from claims of creditors and that remains in the hands of those to whom it may be assigned by the order shall continue to be liable for claims against the decedent until barred as provided in the code. Any known or reasonably ascertainable creditor who did not receive notice and for whom provision for payment was not made may enforce the claim and, if the creditor prevails, shall be awarded reasonable attorney's fees as an element of costs against those who joined in the petition.
(e) The recipients of the decedent's property under the order of summary administration shall be personally liable for a pro rata share of all lawful claims against the estate of the decedent, but only to the extent of the value of the estate of the decedent actually received by each recipient, exclusive of the property exempt from claims of creditors under the constitution and statutes of Florida.
(f) After 2 years from the death of the decedent, neither the decedent's estate nor those to whom it may be assigned shall be liable for any claim against the decedent, unless proceedings have been taken for the enforcement of the claim.
(g) Any heir or devisee of the decedent who was lawfully entitled to share in the estate but who was not included in the order of summary administration and distribution may enforce all rights in appropriate proceedings against those who procured the order and, if successful, shall be awarded reasonable attorney's fees as an element of costs.
735.301 Disposition without administration.--
(1) No administration shall be required or formal proceedings instituted upon the estate of a decedent leaving only personal property exempt under the provisions of s. 732.402, personal property exempt from the claims of creditors under the Constitution of Florida, and nonexempt personal property the value of which does not exceed the sum of the amount of preferred funeral expenses and reasonable and necessary medical and hospital expenses of the last 60 days of the last illness.
(2) Upon informal application by affidavit, letter, or otherwise by any interested party, and if the court is satisfied that subsection (1) is applicable, the court, by letter or other writing under the seal of the court, may authorize the payment, transfer, or disposition of the personal property, tangible or intangible, belonging to the decedent to those persons entitled.
(3) Any person, firm, or corporation paying, delivering, or transferring property under the authorization shall be forever discharged from liability thereon.
735.301 Disposition without administration.--
(1) No administration shall be required or formal proceedings instituted upon the estate of a decedent leaving only personal property exempt under the provisions of s. 732.402, personal property exempt from the claims of creditors under the Constitution of Florida, and nonexempt personal property the value of which does not exceed the sum of the amount of preferred funeral expenses and reasonable and necessary medical and hospital expenses of the last 60 days of the last illness.
(2) Upon informal application by affidavit, letter, or otherwise by any interested party, and if the court is satisfied that subsection (1) is applicable, the court, by letter or other writing under the seal of the court, may authorize the payment, transfer, or disposition of the personal property, tangible or intangible, belonging to the decedent to those persons entitled.
(3) Any person, firm, or corporation paying, delivering, or transferring property under the authorization shall be forever discharged from liability thereon.
Please see the following FL statutes:
733.617Compensation of personal representative.
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(1)A personal representative shall be entitled to a commission payable from the estate assets without court order as compensation for ordinary services. The commission shall be based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during administration.
(2)A commission computed on the compensable value of the estate is presumed to be reasonable compensation for a personal representative in formal administration as follows:
(a)At the rate of 3 percent for the first $1 million.
(b)At the rate of 2.5 percent for all above $1 million and not exceeding $5 million.
(c)At the rate of 2 percent for all above $5 million and not exceeding $10 million.
(d)At the rate of 1.5 percent for all above $10 million.
(3)In addition to the previously described commission, a personal representative shall be allowed further compensation as is reasonable for any extraordinary services including, but not limited to:
(a)The sale of real or personal property.
(b)The conduct of litigation on behalf of or against the estate.
(c)Involvement in proceedings for the adjustment or payment of any taxes.
(d)The carrying on of the decedent’s business.
(e)Dealing with protected homestead.
(f)Any other special services which may be necessary for the personal representative to perform.
(4)If the will provides that a personal representative’s compensation shall be based upon specific criteria, other than a general reference to commissions allowed by law or words of similar import, including, but not limited to, rates, amounts, commissions, or reference to the personal representative’s regularly published schedule of fees in effect at the decedent’s date of death, or words of similar import, then a personal representative shall be entitled to compensation in accordance with that provision. However, except for references in the will to the personal representative’s regularly published schedule of fees in effect at the decedent’s date of death, or words of similar import, if there is no written contract with the decedent regarding compensation, a personal representative may renounce the provisions contained in the will and be entitled to compensation under this section. A personal representative may also renounce the right to all or any part of the compensation.
(5)If the probate estate’s compensable value is $100,000 or more, and there are two representatives, each personal representative is entitled to the full commission allowed to a sole personal representative. If there are more than two personal representatives and the probate estate’s compensable value is $100,000 or more, the compensation to which two would be entitled must be apportioned among the personal representatives. The basis for apportionment shall be one full commission allowed to the personal representative who has possession of and primary responsibility for administration of the assets and one full commission among the remaining personal representatives according to the services rendered by each of them respectively. If the probate estate’s compensable value is less than $100,000 and there is more than one personal representative, then one full commission must be apportioned among the personal representatives according to the services rendered by each of them respectively.
(6)If the personal representative is a member of The Florida Bar and has rendered legal services in connection with the administration of the estate, then in addition to a fee as personal representative, there also shall be allowed a fee for the legal services rendered.
(7)Upon petition of any interested person, the court may increase or decrease the compensation for ordinary services of the personal representative or award compensation for extraordinary services if the facts and circumstances of the particular administration warrant. In determining reasonable compensation, the court shall consider all of the following factors, giving weight to each as it determines to be appropriate:
(a)The promptness, efficiency, and skill with which the administration was handled by the personal representative;
(b)The responsibilities assumed by and the potential liabilities of the personal representative;
(c)The nature and value of the assets that are affected by the decedent’s death;
(d)The benefits or detriments resulting to the estate or interested persons from the personal representative’s services;
(e)The complexity or simplicity of the administration and the novelty of the issues presented;
(f)The personal representative’s participation in tax planning for the estate and the estate’s beneficiaries and in tax return preparation, review, or approval;
(g)The nature of the probate, nonprobate, and exempt assets, the expenses of administration, the liabilities of the decedent, and the compensation paid to other professionals and fiduciaries;
(h)Any delay in payment of the compensation after the services were furnished; and
(i)Any other relevant factors.
739.201 Disclaimer of interest in property.--Except for a disclaimer governed by s. 739.202, s. 739.203, or s. 739.204, the following rules apply to a disclaimer of an interest in property:
(1) The disclaimer takes effect as of the time the instrument creating the interest becomes irrevocable or, if the interest arose under the law of intestate succession, as of the time of the intestate's death.
(2) The disclaimed interest passes according to any provision in the instrument creating the interest providing explicitly for the disposition of the interest, should it be disclaimed, or of disclaimed interests in general.
(3) If the instrument does not contain a provision described in subsection (2), the following rules apply:
(a) If the disclaimant is an individual, the disclaimed interest passes as if the disclaimant had died immediately before the interest was created, unless under the governing instrument or other applicable law the disclaimed interest is contingent on surviving to the time of distribution, in which case the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution. However, if, by law or under the governing instrument, the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution. For purposes of this subsection, a disclaimed interest is created at the death of the benefactor or such earlier time, if any, that the benefactor's transfer of the interest is a completed gift for federal gift tax purposes. Also for purposes of this subsection, a disclaimed interest in a trust described in s. 733.707(3) shall pass as if the interest had been created under a will.
(b) If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.
(c) Upon the disclaimer of a preceding interest, a future interest held by a person other than the disclaimant takes effect as if the disclaimant had died or ceased to exist immediately before the time of distribution, but a future interest held by the disclaimant is not accelerated in possession or enjoyment as a result of the disclaimer.
(4) In the case of a disclaimer of property over which the disclaimant has a power, in a fiduciary or nonfiduciary capacity, to direct the beneficial enjoyment of the disclaimed property, unless the disclaimer specifically provides to the contrary with reference to this subsection, the disclaimant shall also be deemed to have disclaimed that power unless the power is limited by an ascertainable standard, as defined in s. 736.0103, as in effect when the disclaimer becomes irrevocable.
