Probate/Estate | Tom McClellan | BHHS Florida Realty
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Tom McClellan

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XV                                              Probate Estate Glossary / Terminology

 

This is extensive, but a not all inclusive list of common terms you may come across

Administration:          5 Types-

Disposition without Administration (Smaller Estates under $75,000.)

  1. Summary-Independent: Decision without court involvement.  Shorter timeframe.  Not the best when larger #, minor, unknown, refuse to cooperate beneficiaries or if > 2nd anniversary of death comes. 
  2. Formal-Dependent; Requires Court Confirmation.  Takes longer, most common form.
  3. Ancillary-Decease owns Real Estate in Florida, but dos not live in Florida.  The Probate proceedings are transferred to Florida.  
  4. Foreign-Deceased owns Real Estate in Florida, but does not live in Florida.  The Probate is closed in another state.
  5. Homestead- Determination, a special procedure for homesteaded property within Formal Administration.  Court issues an “Order Determining Homestead” which distributes to the persons named in the Will.  If the beneficiary is a spouse or lineal descendant of the decedent, the property is exempt from claims of the creditor.

Administrator:           Individual or institution appointed by the court to oversee the settlement of an estate of a person who has died without a will.

Affidavit:         The written declaration of facts made voluntarily under oath.

Attorney-in-Fact:        Legal term for (Power of Attorney) POA or Agent of.  It is terminated at Death.  

Beneficiary:     Heir at law, in an intestate estate, and devisee, in a testate estate.

Bequest:         A Gift of property given under the terms of a will.

Bond:              Money that backs a promise that an individual will perform a duty.

Caveator:        Interested party requesting the court for a postponement of hearing or decision.

Claim against an Estate:        Refers to a charge against an estate to settle an agreement or an outstanding obligation (as in the case of bills unpaid at the time of death).

Codicil:            A codicil is a document, attachment or rider that is added to an existing will that modifies or supersedes existing provisions or adds new provisions. This is done as an alternative to redrawing the entire will.

Conditional Acceptance:       Once Offer is accepted with specific term periods for inspections/appraisals.  After the Buyer contingencies have been satisfied, a court date for confirmation hearing of the sale is scheduled (30-45 days after satisfied).  All parties attend.

Confirmation Hearing:  When there is a dispute among the heirs on the sale of real estate, the court hearing is held.  The court regulates the sale.  Their deadlines are unforgiving and specialized forms must be used.  Time is of the essence.  Here, any “Over Bidders” can offer to purchase the property.

Conservatorship:        A court proceeding wherein a judge appoints a responsible person (conservator) to care for another person (conservatee) who cannot care for him/her self or his/her finances.

Contest of a Will:       Challenging the validity of a will, through a legal proceeding, to prevent the distribution of   estate assets.

Cross Border Trust (CBT)- Canadians:          Florida Property is exempt from Florida Probate when they die.  Canadian Wills do not void Florida Probate.  Assets inherited thou CBT are safe from divorcing spouses.  Creditors cannot seize the beneficiary's interest in Florida property or proceeds.  No annual filing to IRS or Canadian tax authorities.  Lowest Capital Gain rate.

Curator:          Florida Statute 731.201 defines a “curator” a person who is appointed by the probate court to take charge of the estate until letters of administration are issued (in other words, until a specific personal representative is appointed).  A curator is essentially someone neutral who is appointed to temporarily administer the estate. 

Custodian of the Will:           The person in possession of the will when the person who wrote the will dies.

Decedent:       The person who died.

Devisee/Legatees:      Persons named in the will.

Domicile:        The state and county that the decedents lived (primary residence).

Executor:        A person named in the will and appointed by the Court to carry out the decedent’s wishes. This person is usually names as the Seller of the real property.

Fiduciary:        The individual or institution responsible for acting in the best interests of another party.  They are bound by law to put aside personal interests and act in good faith when making decisions for the benefit of another.

Heir:                A person who inherits Intestate. 

Homestead:    (Article X, Section 4 of the Florida Constitution) A home that is the primary residence of a US citizen or Revocable Trust.  They can have only 1 property homesteaded.  Does not allow forced sale by creditors, provides a tax exemption, and has restrictions on the owner(s) from alienating or devising.  If home is in 1 persons name, then gets married, 2nd person also have the same homestead rights.  When 1 person dies, the spouse gets the home without the home being part of probate. (See protected 4(a)(1) and 4(b) of Article X of the Florida State Constitution.             

IAEA (Independent Administration of Estates Act):            Eases the job of the PR by allowing the personal representative to take certain actions on the estate without obtaining prior court approval.

Intestate:        When someone dies without leaving a Will.  When there is no will, the sale of the decedent’s real property often requires court confirmation.

Legatees/Devisees:    People who are named in a will.

Letters of Administration:     Documentation signed by the probate court give a person authority to act on behalf     of an estate (PR).

Letters of Testamentary:  it allows the PR who is not in title to sign for the estate

Notice of Confirmation of Sale:        A public notice that tells everyone about the sale of the property.

Notice of Proposed Action:  When a property has an accepted offer, notice is sent to all heirs stating the terms of the proposed sale.  Heirs have 15 calendar days to review and pose any objections.  If no objections, the sale may proceed without a court hearing.

Overbider:      At the Court Confirmation Hearing, can bid to purchase home.  Court sets base, but usually bid must me 5% +$500. higher than current bid to start.  Anyone in the courtroom may stand up and Buy on the spot.

Personal Representative (PR) Administrator or Executor: -see VII Personal Representative (PR) …

Petition:          Documents filed in probate court to request that an action be taken, such as a petition to open an estate for probate.

Petitioner:      Any interested person (affected by the outcome) may make a written request to the court for an order to open the estate; usually by a nominated PR, surviving spouse, beneficiaries named in the will, heirs if no will, creditors of the decedent.

Plaintiff:          They are the party that initiates a lawsuit before the court seeking legal remedy.

POD (Payable on Death Account, Totten Trust or ITF (In Trust for) accounts aka Poor Man’s Trust): an account that may help keep money out of Probate.  Easy to create; no limit how much money, designating a beneficiary-no cost, easy for the beneficiary to claim the money only after death.   No alternate beneficiary can be named, must use the money and close account before making a change.  POD is not exempt from Creditors. 

Portability Election:   2021 Fed Tax Rate >$ @40%, but reducing each year.  If “Election” is not filed at 1st death, where spouse inherits significantly amount of assets, it can affect spouse estate later by paying more taxes than necessary.  Tell Attorney to file it even if not needed on 1st death, can be a benefit on the 2nd!

Power of Attorney:    (POA) A legal document authorizing one individual to act as the agent or "attorney" for another (the "principal"). If the attorney is authorized to act in behalf of another for all matters, he or she has general power of attorney. Authority to act solely regarding specific situations is limited/special power of attorney. If the authority granted extends beyond the disability of the principal, the attorney has durable power of attorney.  POA expires upon death.

Probate:          -see II What is Probate?

Probate Court:           Also referred to as a surrogate court, is a specialized court and legal process that deals with matters pertaining to the probate and the administration of the estate of deceased persons.  They determine and certify the validity of wills, enforce the provisions of a valid will (by issuing the grant of probate), prevent improper action or malfeasance by PRs and administrators of estates, and provide for the equitable distribution of the assets of persons who die intestate (without a valid will). In such cases, the court may appoint a PR to administer the matters pertaining to an estate

Probate real estate sale:       The transfer of legal title (ownership) of real property from the estate of the person       who has died to his or her beneficiaries or to a buyer under the supervision of the Court.

Probate referee:         Before real property can be sold through probate, it must be valuated involving a probate referee. They are paid for this service directly by the estate, usually a % of the appraised value.

Real Property:            The term used to refer to real estate (land and buildings) in probate and trust sales.

Statute of Limitation:              A specific time period to perform an action to be valid.  No statute of limitations for admitting a will to probate in Florida

“Stiff” Rule:    The process of sale of real property through Probate Sale with Court Confirmation is a court regulated series of steps that must be clearly and carefully managed. The deadlines are unforgiving, documentation is specialized, the time elements are critical and the court's oversight must be honored.

If you bought a house with a tag that reads: "Probate Sale with Court Confirmation" required.  One question you don't want to hear at the court confirmation hearing? Are there any other bidders?  After being in escrow for 30-45 days, having your loan approved, maybe even having the moving van packed and ready, someone might stand up in court to answer that question and buy the same house on the spot,       or at least make you pay more for it. Be ready to deal with this situation could bring this type of purchase.

Summary Administration:     A simplified probate proceeding for estate valued at less than a stipulated amount (see state statues) and holds no real property.

Testate:           This term refers to a person who has died and left a “Last Will and Testament” that specifies their wishes pertaining to the distribution of the assets of their estate following their death. In this case, the estate will be distributed according to the provisions of the will.

Title Held to Real Property: (obtain legal advice before taking any action)

Sometimes after closing, owners want to change how they took title; (adding family member, spouse, via Corporation, Trust, etc).**BEWARE such transfers can likely create a unintended tax liability and cause title insurance policy ownership  to be ineffective.

.           Community Property Law:    This means that anything acquired during the marriage belongs to both husband and wife. However, it's still possible to own property separately.

.           Homestead Property:            Primary resident of both parties where even if one is not on  deed, still has rights to the property upon death of deeded owner. 

.           Joint Tenancy:              Own Real or Personal Property.   Four main features mark this type of ownership: 

(1) The joint tenants own an undivided interest in the property as a whole; each share is equal, and no one joint tenant can ever have a larger share. 

(2) The estates of the joint tenants are vested (meaning fixed and unalterable by any condition) for exactly the same period of time—in this case, the tenants' lifetime. 

(3) The joint tenants hold their property under the same title. 

(4) The joint tenants all enjoy the same rights until one of them dies. Under the right of survivorship, the death of one joint tenant automatically transfers the remainder of the property in equal parts to the survivors and not subject to probate. However, all parties should be aware of possible tax liability implications of such survivorship.  When only one joint tenant is left alive, he or she receives the entire estate.

.           Joint Tenancy with Rights of Survivorship:  Businesses pass to surviving owners.  Joint tenant (or tenancy) with right of survivorship (JTWROS) is a type of ownership of real property or financial assets in which all joint owners have equal portions of ownership that are immediately re-allocated to remaining owners if one or more owner dies.           

.           Sole Ownership or in Name a Married (Husband/Wife):               One person can own real              property by himself in a sole ownership vesting. Typically, the deed will state if the person is               married, single, widow or widower.  

.           Tenancy in Common:             Property owned by 2 or more have individual undivided ownership interest via deed, will or conveyance without right of survivorship, passes on to Heirs at their % of ownership, which can vary for each.  Decedent will require probate.         

.           Tenancy by the Entirety:       Only created by married persons (Husband and Wife) whereby each owns the undivided whole of the property as a single legal entity and upon death of one, the survivor is entitled to the decedent’s share, without probate.  Divorce will void this.

.           Title Holding Trust:    A private agreement among 1 or more to operate, manage, hold legal                title (Sec. 689.071 Fl. Law) where it appoints another person to serve as trustee with trustee                    holding legal title for the benefit of the beneficiary (trust maker).  It may hold title to more                       than 1 property.  Trustee may be an individual or legal entity (LLC or Corporation).  The Trust                  Beneficiaries are not disclosed.

.           Lady Bird Deed:          Accepted in Florida and only 5 other states.  It’s an enhanced version of a Life Estate.  The owner places a “Beneficiary” on the deed (like Insurance policy) but keeps full rights of ownership during their life.  Upon death, title passes to the beneficiaries on the deed.  It allows them to sell the Property and obtain a mortgage.  It avoids Probate and the jeopardizing owner’s eligibility for Medicaid.  It should be drawn up by an Attorney.

 

Trust:  When a person (trustee) holds property at another person’s (Settlor’s) requests for the                                 benefit of someone else (Beneficiary).  Consult with an attorney before finalizing anything.

.           Invasion of a Trust:    Refers to a distribution of assets made from the principal of a trust.

.           Irrevocable Trust:       A type of trust that cannot be revoked or changed in any way.  It can                      violate            the mortgage due on sale clause and possible payment of doc stamps to Florida for                      transfer of title.

.           Remainder man:        In the case of a trust, this term refers to the individual who will receive the principal of a trust when final distribution takes place.

.           Revocable Trust aka Living Trust:  A type of trust that takes affect while the settlor is still alive.  It can be terminated by the settlor (the opposite of an irrevocable trust).  This type of trust does not violate the mortgage due on sale clause nor require payment of doc stamps to the state of Florida.

.           Successor Trustee or Executor:         An individual or institution taking the place of a trustee or executor unable to continue the responsibilities designated in the trust agreement or will.

.           Testamentary Trust:  A type of trust that is established under the will of a deceased.

Trust Fund:     Property held in trust. This term originally applied only to money held in trust, but is frequently used when referring to all property held in trust.

Trustee:          The individual or institution with responsibility for management of property placed in trust for the        benefit of another individual.

Uniform Partition of Heirs Property Act:     Florida bill SB580 signed in law effective 7/1/2020.  Floridian dies without a Will, one heir can sell their portion of the property independently after the remaining heirs has the “right of first refusal” before an outside party is allowed to buyer the inherited percentage.

Widow:           A woman who has lost her spouse by death and has not remarried

Widower:        A man who has lost his spouse by death and has not remarried

Will:                A legal document that lists a person’s wishes about what will happen to his/her personal and real property after death.  The Will (not Probate) must be filed with the Clerk of Circuit Court within 10 days of receiving information the decedent has passed away. (S. 732-901 Florida Statutes)