It’s very common for people to die in Florida leaving behind not only assets, but also debts that need to be paid. When a person dies, the debts that person left behind must be paid through his or her estate. After the person dies, a Florida probate court will appoint an executor, also known as a personal representative, to take control of estate property and pay any remaining obligations. Here are some commonly asked questions about Florida estate debts and probate.
Do family members have to pay for any unpaid debt?
No. In most situations, the debts left behind by deceased person are not the responsibility of surviving relatives or family members. For example, if your brother dies and leaves behind an unpaid credit card bill, it is not your responsibility to pay the credit card company. However, if you and the deceased had a joint debt, you are still obligated to make debt payments even though your co-debtor has died.
Which creditors get repaid first?
Florida law establishes a pecking order of creditors who stand to receive repayment from an estate. Here is the basic order:
- 1st. Any administration costs the personal representative incurred during the course of managing and settling the estate.
- 2nd. Funeral expenses of up to $6,000.
- 3rd. Any debts or unpaid taxes given preference under federal law, such as Medicaid, estate taxes, and public assistance payments.
- 4th. Medical expenses incurred within the last 60 days of the decedent’s final illness.
- 5th. Up to $18,000 for payments to a surviving spouse or dependents.
- 6th. Unpaid child support.
- 7th. Business debts incurred after the death of the decedent.
- 8th. All other claims.
What if there isn’t enough money to pay back all debts?
When someone dies leaving behind an estate in which there are more deaths than there are assets, not all creditors will get repaid. In this situation it falls to the personal representative to determine who gets repaid first. Estates that have more debts than assets are known as insolvent estates.
How does the personal representative determine what debts are owed?
As part of the probate process, the personal representative will notify potential creditors that the decedent has died. After receiving notice, creditors have a limited amount of time in which they can file a claim with the court. If creditors fail to file a claim within the allotted time period they are prevented from doing so later.
If the personal representative doesn’t believe submitted claims are valid he or she can object to them. Once a court has made a determination about which contested claims are valid and which are not, the personal representative can then begin using estate funds to pay valid claims.