How to Handle a Small Estate in Florida

How to Handle a Small Estate in Florida

 

If you’re wrapping up the estate of a Florida resident who died with an estate that’s worth less than a certain dollar amount, you won’t have to go through a formal probate court proceeding.

 

It doesn’t matter whether or not the deceased person left a will; what matters is the value of the assets left behind. If the estate’s value is under the “small estates” limit in Florida, you can take advantage of a simplified probate procedure, often called a “summary probate.” Instead of having a court hearing in front of a judge, you may need only to file a simple form or two and wait for a certain amount of time before distributing the assets.

 

In some states, it can be even easier: Inheritors can use a simple affidavit to claim assets. (An affidavit is a statement you sign in front of a notary, swearing something is true.) If you live in one of those states, you just have to wait a required period of time, then sign a simple, sworn statement that no probate proceeding is happening in your state and that you are the person entitled to inherit a particular asset–a bank account, for example.

 

When you are trying to determine whether or not an estate’s value is below the Florida small estates limit, the first thing to do is make a list of the assets. A simple spreadsheet or list will do. Not everything a person owns counts, though. For this list, include only the things that pass to heirs and beneficiaries by will or, if there’s no will, by Florida intestacy laws, which determine who inherits if there is no will.

 

Don’t count assets that are held in joint tenancy, retirement plans, payable-on-death (POD) bank accounts, real estate transferred by a transfer-on-death deed, or transfer-on-death brokerage accounts. These assets don’t count towards the small estate limit because they pass to the named beneficiaries regardless of what a will (or state intestacy law) says. If a person had a life insurance policy with a named beneficiary, the insurance proceeds won’t count either.

 

Some states also don’t count the amount of money owed on a car, or a house, while others count the fair market value of an asset, even it is subject to a loan or a mortgage.

 

For example, say Sam died in Florida and owned the following assets:

• A checking account with $2,345
• A savings account with $2,567
• A car with a blue book value of $6,500 (and no loan)
• An IRA with $32,000, naming his son and daughter as beneficiaries
• A life insurance policy worth $15,000, naming his son and daughter as beneficiaries

 

To figure out whether Sam is above or below Florida’s small estate limit, only the bank accounts and the car would be counted, for a total of $11,412. His IRA and the life insurance proceeds aren’t counted towards the limit because they will go to his beneficiaries directly. The value of the car is included because he doesn’t owe money on it.

That means the value of Sam’s estate is under the Florida small estates limit. His son and daughter, who inherit his assets under Florida’s intestacy laws because Sam had no will, would follow this procedure:

 

In Florida, there’s no Affidavit procedure available for small estates. There is a summary probate procedure available for estates that have no real estate and in which all property is exempt from creditor’s claims, except the amounts needed to pay funeral and the last two months of illness expenses.

Fla. Stat. Ann 735.201

There’s another summary probate procedure available for estates that don’t exceed $75,000 or in which the decedent has been dead for more than two years. (This excludes the value of all joint tenancy property and other assets that pass by beneficiary designation, such as life insurance and transfer on death accounts.)