Grief and business do not mix well, but you may have to deal with both matters after a loved one dies. Understanding Florida probate laws is essential for protecting the legacy of business owners and their affiliates.
Our top-rated legal team at BrewerLong can provide clear, compassionate, and effective counsel to individuals who need help with probate and business matters in Florida.
The Basics of Probate
Probate is a legal process that disperses a deceased person’s (decedent’s) assets among their beneficiaries and creditors. On a basic level, the probate process has three main parts, consisting of:
- Selecting a personal representative to administer the estate,
- Paying the decedent’s taxes and debts out of estate property, and
- Distributing the decedent’s remaining estate assets to their beneficiaries.
Each of these parts has its own set of complexities. The specific facts of your probate case will determine how many steps you may need to take to protect your rights in an estate matter. Let’s review each in greater detail and how they work in Florida.
Selecting a Personal Representative
A personal representative, also known as an executor, is the individual the court appoints to administer a deceased person’s estate. This person is responsible for handling the estate according to Florida law and carrying out the deceased’s wishes according to their will or ancillary agreements.
How Is a Personal Representative Selected?
Under Florida law, probate courts select personal representatives in the following ways:
- If there is a valid will that identifies a personal representative, the court typically appoints the person named in the will as the personal representative;
- If there is a valid will that does not identify a personal representative, the court typically chooses a representative who is selected by those with a majority interest in the estate, or the court selects a devisee under the will to be the personal representative;
- If there is no valid will, the court may choose the surviving spouse, the person selected by the heirs with a majority interest in the estate, or the nearest heir (in that order); and
- If no one is qualified or willing to serve, the court may appoint a qualified individual as the personal representative.
As we noted above, a personal representative must be qualified to serve. This means that the personal representative must be an adult and a resident of Florida.
Letters of Administration
After the court appoints a personal representative, it issues “letters of administration” to them. These letters give the personal representative the legal authority to act on behalf of the estate. The personal representative must fulfill several duties in taking on the estate matters.
Duties of a Personal Representative
The personal representative has several key responsibilities. They must:
- Take an inventory of the estate by identifying and appraising all estate assets,
- Provide notice of the administration to all parties who may have an interest in the estate or may be involved in the estate,
- Pay all valid debts and taxes owed by the estate, and
- Distribute the remaining estate assets to the beneficiaries according to the will or Florida law.
Personal representatives have a general duty to administer the decedent’s estate diligently.
How Personal Representatives Affect Business Owners
For business owners, the personal representative’s role can be particularly important. If your estate includes a business, the personal representative may need to:
- Manage business property during probate,
- Transfer business ownership according to your estate plan, and
- Work with your business partners or shareholders.
At BrewerLong, we understand the complexities of probate and how it can impact your business. Our experienced attorneys can help you choose a qualified personal representative and ensure that your business interests are protected during probate.
Understanding the creditor claims process during probate is vital for Florida business owners. At BrewerLong, we recognize that managing estate liabilities can be challenging. We are here to provide clear, actionable insights into how Florida probate laws handle creditor claims and tax obligations.
Notice to Creditors
Florida law requires that the personal representative provide notice to the estate’s creditors. This notice informs creditors of the probate proceeding and their right to file claims against the estate.
The personal representative may have to serve a copy of the notice to certain creditors, and the personal representative must notify other creditors by publishing the notice.
Creditors served with a notice have 30 days to make a claim for payment, and creditors who receive notice only by publication have 90 days to make a claim.
Handling Creditor Claims
Unfortunately, even in times of grieving, creditors may come out of the woodwork to seek payment from a decedent’s assets. The personal representative of a probate estate must review each creditor claim and determine its validity.
If a claim is disputed, the personal representative can file an objection with the court, and legal proceedings (including arbitration) can commence to resolve the issue. Otherwise, a personal representative has a year from publishing the creditor notice to pay valid claims.
Paying the Decedent’s Taxes
In general, taxes are an inevitability when dealing with property and assets. A decedent may owe federal estate taxes on their estate. Florida has decoupled from the federal estate tax, meaning that there is no Florida estate tax for the estates of those who died on or after January 1, 2005.
Deceased business owners might also owe wages to employees and may have to pay taxes on those wages and other business transactions. The personal representative is responsible for filing necessary tax returns and paying any taxes owed by the decedent.
Practical Considerations for Business Owners
If the decedent owned a business, their estate may be responsible for paying business debts. The personal representative must carefully review business records and contracts to identify outstanding liabilities. Business assets and liabilities can also have complex tax implications, so seeking professional tax advice is essential.
Documentation is key to smooth estate administration. The personal representative must maintain detailed records of all claims, payments, and tax filings. Any business owner making an estate plan should keep their records organized and easy to identify to avoid confusion in the event of a tragedy.
At BrewerLong, we understand the complexities of probate administration, creditor claims, and business liabilities. We can provide the guidance necessary for developing a detailed and effective estate plan and administering an estate according to a decedent’s wishes.
Distributing an Estate: Honoring a Decedent’s Wishes
Typically, there are two ways that a decedent’s beneficiaries receive property during probate: According to the terms of the decedent’s will or according to the state’s intestate succession laws.
What Is a Will?
A will is a legal document outlining how you want to distribute your assets after death. These assets can include:
- Investment accounts,
- Personal property,
- Bank accounts,
- Real estate, and
- Business interests.
A will also allows you to appoint a personal representative to administer your estate.
Florida Will Requirements
You have a lot of leeway to create the type of will you want, but you must follow a few rules if you want the court to enforce its terms. The following must apply to your will for it to be valid in Florida:
- Your will must be in writing. Your written will can be a physical or electronic document.
- You must have capacity to write your will. When you write your will, you must be at least 18 years old and of sound mind.
- You must properly sign your will. You must sign your written will in front of two competent witnesses.
- Your witnesses must properly sign your will. Both witnesses must sign your will in front of you and each other.
Your witnesses might have to testify during probate about the signing of your will. However, notarized affidavits from you and both witnesses can simplify the probate process by eliminating the need for witness testimony.
Revoking or Changing a Will
As long as you are alive, you don’t have to be bound by the terms of your own will. You can change your will during your lifetime and revoke your will if you want.
To make a valid amendment (or codicil) to your will, you need to put the changes in writing and have them signed and witnessed in the same way you would have a valid will signed and witnessed.
If you want to terminate your will altogether, you can do so with any of the following methods:
- Writing a document that revokes the terms of your will and signing it in front of two competent witnesses who also sign the document in front of you and each other,
- Burning the physical will with the intent to destroy it,
- Defacing the physical will with the intent to destroy it,
- Taking another physical act against the physical will with the intent to destroy it, or
- Deleting or obliterating an electronic will with the intent to destroy it.
If you try to revoke your will by taking an act to destroy it, an involved party needs to prove by clear and convincing evidence that you were revoking the will.
A divorce can also revoke any provisions in your will that involve your ex-spouse. However, your ex-spouse can retain their share of your assets if you write a will provision for them after the divorce or if your will is clear that a divorce will not affect their share.
What Is Intestate Succession?
When someone dies without a valid will, they die intestate. The court must distribute an intestate estate according to the state’s intestate succession laws. Additionally, if a decedent’s will does not address certain assets, the court must distribute those assets according to the intestate succession laws.
Florida’s intestacy laws favor family members of the decedent over other potential beneficiaries and might not reflect what the decedent wants.
Intestate distribution to the surviving spouse
The first priority in intestate succession goes to the decedent’s spouse. However, a spouse’s share from an intestate estate depends on whether the decedent or the spouse has surviving children or descendants. Florida’s law distributes an intestate estate to a spouse in the following ways:
- If you pass with a spouse but no descendants, the intestate succession laws give all of your estate to your surviving spouse;
- If you pass with a spouse and descendants and all of your descendants come from your spouse, the intestate succession laws give all of your estate to your surviving spouse;
- If you pass with a spouse and descendants but at least one of your descendants does not come from your spouse, the intestate succession laws give half of your estate to your spouse; and
- If you pass with a spouse and descendants and your spouse has at least one descendant that does not come from you, the intestate succession laws give half of your estate to your spouse.
If this type of distribution does not work for you, you should draft and execute an estate plan as soon as possible. We can help you develop an estate plan that protects your business and your loved ones.
Intestate distribution to heirs other than the surviving spouse
If you pass away without a spouse, the intestate succession laws establish a hierarchy of inheritance, prioritizing close relatives in the following order:
- Your entire estate goes to your descendants if there is no surviving spouse;
- Half of your estate goes to each of your parents if there is no spouse or descendants;
- Your estate goes to your siblings and their descendants if you had no surviving spouse, descendants, or parents; and
- If none of the above-listed relatives survives you, your estate goes to other heirs, such as grandparents, uncles, aunts, and other kin.
If the court cannot locate kin to inherit your intestate estate, your assets might go to the kin of a spouse who did not survive you. And if the court cannot locate any kin who has the right to receive your intestate estate, your assets go to the state.
Intestate succession can have significant implications for families and business owners. This type of succession underscores the importance of having an estate plan to ensure the distribution of assets according to your wishes.
While the law provides a framework for asset distribution in the absence of a will, creating a valid will remains one of the best ways to ensure that your wishes are honored.
We Can Be Your Partner in Estate Planning
At BrewerLong, we understand the importance of a well-crafted will or estate plan and proper asset distribution. Our experienced Orlando probate litigation attorneys can help:
- Draft a comprehensive will that reflects your wishes,
- Ensure that your will complies with Florida law,
- Understand business succession planning, and
- Handle the probate process and asset distribution.
We are ready to advocate for your interests in any Florida estate issue.
Probate administers the personal estate of a decedent. However, sometimes, a decedent’s personal property and debts include their business property and debts. Below is a breakdown of the key factors involved in handling business matters after a business owner dies in Florida.
Business Property: Is It Part of Your Estate?
Running a business can mean handling various types of property, including the following:
- Business profits,
- Real estate,
- Business shares,
- Equipment,
- Business accounts, and
- Business investments.
Depending on the type of business you run and the business agreements you have entered, this property might be subject to a probate of your estate.
Look at the law
You can often write your own rules for operating a business and handling business property. However, Florida law has default rules if business owners do not draft their terms for running their companies.
If you have been a business owner for an extended period without customized guidelines for your enterprise, BrewerLong can tailor enforceable business rules to help you get the most out of your business during your lifetime and beyond.
Look at your business formation and operation documents
To form a business, you might have to file certain business documents with the government. Many of these documents have rules about what property belongs to a business and how management must handle business interests. You might also have to enter into agreements that dictate how the business owners must run their business.
Relevant business documents might include the following:
- Corporations—formed by articles of incorporation and governed by bylaws and shareholder agreements;
- Limited liability companies (LLCs)—formed by articles of organization and governed by operating agreements; and
- Partnerships—governed by partnership agreements.
Except for profits, property from your business typically belongs to the business unless you have an agreement that states otherwise. The debts of corporations and LLCs belong to those businesses unless an owner or manager incurs a debt while violating their business duties.
If you want to transfer your business property to someone else when you die, your business’s formation and management documents or Florida law might have specific rules for when you can do it and who can own the business property. We are highly experienced in Florida business law.
Our attorneys can prepare your estate planning and business documents so your business property goes to the beneficiaries you want after you pass.
Business Management: Should You Write a Succession Agreement?
Your business can be a significant part of your legacy, and choosing the right businessperson to take over for you when you die can be crucial. Some business owners depend on their business formation documents, business management documents, or state law to choose for them.
But if you don’t want the choice of your successor to fall into the hands of others, you may be able to write a succession agreement that makes the choice you want.
Succession agreements can take various forms. For example, buy-sell agreements provide for purchasing the deceased owner’s interest, while simple contracts can name the next owner or manager. Florida law allows for the incorporation of business succession agreements into estate planning documents, such as wills or trusts. Of course, these agreements also need to follow the rules of your business, and we can help ensure that they do.
Having a Business Attorney Helps
At BrewerLong, we understand business owners’ challenges when planning for the future. Our experienced attorneys can help:
- Draft and review business formation documents and agreements,
- Develop comprehensive business succession plans,
- Integrate business succession planning with estate planning, and
- Navigate the probate process to ensure the smooth transfer of business interests.
We are committed to providing clear and understandable legal strategies to help you make informed decisions about your business’s future.
Common Setbacks in Probate
While designed to facilitate the orderly transfer of assets, probate can sometimes encounter choppy waters. This is especially true when business interests are involved. So that you can start preparing for the future, let’s explore some common challenges that arise in probates and how to navigate them.
Conflicting Wills or Agreements
Individuals may create multiple wills throughout their lifetime, potentially leading to confusion about which one is valid. Florida law typically prioritizes the most recent valid will. Business agreements may contain provisions that conflict with the will or other estate planning documents.
Resolving these conflicts requires careful legal analysis. Speaking to a lawyer about your will and business plans can reduce undesirable results.
Ambiguous Beneficiary Designations
A will may fail to clearly identify beneficiaries, leading to disputes among potential heirs. This can occur when decedents use nicknames, incomplete names, or titles to identify their beneficiaries instead of names.
Also, changes in family structure, such as divorce, remarriage, or the birth of children, can create ambiguity if the will is not updated to reflect those changes.
Incomplete or Omitted Property
A will may not account for property acquired after its execution. To eliminate confusion, you should regularly review your estate planning documents and update them any time there is a change in the property you own. BrewerLong can monitor your estate matters and help ensure your estate and succession plans stay up-to-date.
Will Contests
Unfortunately, a loved one’s passing can breed many fights among those they leave behind. One of the biggest fights in a probate matter can be whether a will is valid. An interested party can contest a will on one of the following grounds:
- Someone exercised undue influence over the decedent when they wrote the will,
- The will is fraudulent or the product of a fraudulent act against the decedent,
- The will is the product of a mistake,
- The decedent wrote the will under duress due to force or threats, or
- The decedent did not have the mental or legal capacity to write the will when they did.
If you seek to honor the wishes of a loved one or business associate, we can help you prove that a will is valid or invalid. We can also help you draft a will that can hold up against challenges in probate court.
Valuation Issues
Determining the fair market value of business interests can be complex, and ensuring that a personal representative assigns the right value to the business property is crucial. The value of business interests can also fluctuate during the probate process, creating challenges for asset distribution.
We have decades of experience in effectively resolving business matters and can help ensure that any business property in your estate receives the proper consideration.
Contentious Creditor Claims
Any time a creditor comes around can be stressful, and a creditor claim in a time of grief is especially stressful. Business debts may need to be addressed during probate, potentially affecting the distribution of business assets and creating conflicts with beneficiaries.
Also, determining the priority of creditor claims can be complex, especially if both business and personal debts are involved.
Our attorneys can help you ensure that as many business debts as possible are confined to your enterprise and that your personal estate is not touched when you pass. We can also help you make sense of claims against a loved one’s estate and retain as many assets as possible to increase beneficiaries’ shares.
At BrewerLong, we understand the complexities and potential challenges in probate matters, especially when business interests are at stake. We are committed to providing clear and understandable explanations, helping you make informed decisions, and protecting your interests during a challenging time. Trust the firm with decades of experience and multiple legal awards. Trust us. You can call us or contact us online to schedule a consultation.
Resource List:
- Preference in appointment of personal representative, Fla. Stat. §733.301 (2024), link.
- Who may be appointed personal representative, Fla. Stat. §733.302 (2024), link.
- Inventories and accountings; public records exemptions, Fla. Stat. §733.604 (2024), link.
- Notice of administration; filing of objections, Fla. Stat. §733.212 (2024), link.
- General duties, Fla. Stat. §733.602 (2024), link.
- Notifying creditors, Fla. Stat. §733.701 (2024), link.
- Payment of and objection to claims, Fla. Stat. §733.705 (2024), link.
- Florida Estate Tax, Florida Department of Revenue, link.
- Who may make a will, Fla. Stat. §732.501 (2024), link.
- Who may witness, Fla. Stat. §732.504 (2024), link.
- Execution of wills, Fla. Stat. §732.502 (2024), link.
- Self-proof of will, Fla. Stat. §732.503 (2024), link.
- Revocation by writing, Fla. Stat. §732.505 (2024), link.
- Revocation by act, Fla. Stat. §732.506 (2024), link.
- Spouse’s share of intestate estate, Fla. Stat. §732.102 (2024), link.
- Share of other heirs, Fla. Stat. §732.103 (2024), link.
- Escheat, Fla. Stat. §732.107 (2024), link.
- Articles of incorporation; content, Fla. Stat. §607.0202 (2024), link.
- Bylaws, Fla. Stat. §607.0206 (2024), link.
- Restriction on transfer of shares and other securities, Fla. Stat. §607.0627 (2024), link.
- Disposition of assets not requiring shareholder approval, Fla. Stat. §607.1201 (2024), link.
- Liability of directors, Fla. Stat. §607.0831 (2024), link.
- Formation of limited liability company; articles of organization, Fla. Stat. §605.0201 (2024), link.
- Operating agreement; effect on limited liability company and person becoming member; preformation agreement; other matters involving operating agreement, Fla. Stat. §605.0506 (2024), link.
- Transfer of transferable interest, Fla. Stat. §605.0502 (2024), link.
- Operating agreement; scope, function, and limitations, Fla. Stat. §605.0105 (2024), link.
- Limited liability company property, Fla. Stat. §605.0110 (2024), link.
- Liability of members and managers, Fla. Stat. §605.0304 (2024), link.
- Formation of partnership, Fla. Stat. §620.8202 (2024), link.
- Effect of partnership agreement; nonwaivable provisions, Fla. Stat. §620.8103 (2024), link.
- Partnership property, Fla. Stat. §620.8203 (2024), link.
- Transfer of partnership property, Fla. Stat. §620.8302 (2024), link.
- Partner’s liability, Fla. Stat. §620.8306 (2024), link.
- Agreements concerning succession, Fla. Stat. §732.701 (2024), link.
- Incorporation by reference, Fla. Stat. §732.512 (2024), link.
- Effect of fraud, duress, mistake, and undue influence, Fla. Stat. §732.5165 (2024), link.
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