What Happens To Debts When You Die? How The Sarasota County Probate Court Handles Creditors
Debts do not disappear when someone dies. Before a single dollar reaches beneficiaries, the estate must settle its debts, and Florida law dictates exactly who gets paid first.
For personal representatives, following payment guidelines is a top priority. Our experienced Sarasota probate litigation lawyer explains how the Sarasota County Probate Court handles debts and what you need to know before making distributions.
Florida Probate Law Sets a Strict Payment Order For Paying Debts
The Florida Probate Code does not leave debt payment up to interpretation. Under Section 733.07 of the Florida Statutes, personal representatives must follow a specific priority order when satisfying an estate’s outstanding obligations.
Creditors at the top of the list get paid in full before those further down receive anything. If the estate runs out of money partway through, the remaining creditors share what is left. The eight classes of payment, in order, are:
- Administrative costs, personal representative compensation, and attorney fees.
- Funeral, burial, and grave marker expenses, with Florida law capping reimbursement at $6,000.
- Federal taxes and debts with federal preference, along with certain Medicaid recovery claims.
- Reasonable medical and hospital expenses from the last 60 days of the decedent’s final illness.
- Family allowance, a court-approved amount set aside for a surviving spouse or dependent children.
- Court-ordered child support arrearages.
- Debts from the continuation of the decedent’s business after death, but only from the assets of that business.
- All remaining claims, including credit card balances, personal loans, and judgments from the decedent’s lifetime.
Beneficiaries wait at the very end, which can be frustrating for family or friends. However, personal representatives must pay all outstanding claims before making distributions.
Other Factors That Impact Payments in Sarasota County Probate Proceedings
It’s tempting to want to pay beneficiaries first, but personal representatives assume significant risk if they do. Florida law holds them personally accountable if that error results in an unpaid claim. Other factors that can impact payments include:
- Creditors have three months from the publication of the notice to creditors to file a claim, and 30 days if they receive direct written notice.
- The personal representative has the right to object to claims they believe are invalid or inflated.
- Some assets, such as life insurance or joint accounts, avoid probate completely.
An estate that cannot cover all its debts is called insolvent, and in that case, beneficiaries typically receive nothing.
Request a Consultation Today With Our Experienced Sarasota Probate Litigation Lawyer
In Sarasota County Probate Court proceedings, beneficiaries naturally want their distributions as soon as possible. For personal representatives, paying all estate debts is a serious legal responsibility, and missteps can expose you to personal liability.
At Suncoast Civil Law, our Sarasota probate litigation lawyer provides the knowledgeable legal guidance you need to avoid potential disputes. With over 50 years of combined experience, we can protect your interests, whether you are administering an estate or waiting on a distribution. Serving clients throughout Sarasota and Pinellas County, contact us today to request a consultation.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0733/Sections/0733.707.html
flsenate.gov/Laws/Statutes/2024/Chapter733/All
sarasotaclerk.com/court-services/probate-guardianship-wills