Restrictions for Out-of-state Personal Representatives
Florida has special rules for non-resident personal representatives. Under Florida law, an individual must be a resident of Florida to act as a personal representative, unless they are a family member of the decedent. The exact statutory authority is as follows:
FL Statute 733.304 Nonresidents. —A person who is not domiciled in the state cannot qualify as personal representative unless the person is:
- A legally adopted child or adoptive parent of the decedent;
- Related by lineal consanguinity to the decedent;
- A spouse or a brother, sister, uncle, aunt, nephew, or niece of the decedent, or someone related by lineal consanguinity to any such person; or
- The spouse of a person otherwise qualified under this section.
Essentially, this means that any individual who does not live in Florida will be prohibited from acting as a personal representative of a Florida probate estate unless he or she is a spouse, child, sibling, parent, or close relative of the decedent. But, as these individuals are usually the ones nominated or appointed to act as personal representatives in the first place, the law does little to restrict non-residents from acting as personal representatives of Florida probate estates. This restriction can present problems where the decedent nominates a friend, or some other professional such as an attorney or CPA located in another state, to serve.
Special Rules for Personal Representatives in Florida
Besides restricting which individuals can act as a personal representative for a Florida probate estate, Florida law also places restrictions on the kinds of business entities that can serve in this capacity. So, while a bank, savings and loan association, or trust company can be named as a personal representative, it will only qualify if has been authorized to serve as a fiduciary in the state of Florida.
Duties and Obligations of the Personal Representative
A personal representative is a fiduciary who shall observe the standards of care applicable to trustees. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent’s Will and the Florida probate code as expeditiously and efficiently as is consistent with the best interests of the estate. Some of the statutory responsibilities of trustees applicable to personal representatives include:
- Duty of administer the estate/trust
- Duty of loyalty
- Duty of care
- Duty to act prudently (prudent investment rule)
The takeaway rule to summarize the core objective of these rules is that the fiduciary must safe guard the assets, administer the estate according to the rules imposed by Will, Florida statute, or via orders from the judge, and that they must always act in the best interests of the beneficiaries.
Professional Executor / Personal Representative FAQs
Planning for end of life is often an uncomfortable subject to address. Establishing your estate plan and confirming how assets are to be divided and distributed amongst various parties can be a tedious task. Selecting the correct person to be in charge of your estate is pivotal, since that person will be responsible for initiating the probate process and enforcing the provisions of the Will. Probate administration is simply the legal process for retitling assets that belonged to the decedent into the names of the correct beneficiaries. The personal representative, aka executor, will be appointed by the probate court to begin the process of administering the estate, which entails identifying and collecting the estate assets, creating an inventory, initiating the creditor period, and eventually making distributions. The role of the personal representative comes with a great deal of power and discretion to act on behalf of the estate, but also a large amount of responsibility.
First and foremost, a personal representative is there to protect and secure, as well as accumulate all of the probate assets. Probate assets are only those items which are titled in the sole name of the decedent, without a joint owner or a designated beneficiary. Second, the personal representative will initiate the 90-day creditor period in which potential creditors can file claims in the estate for money that is owed to them by the decedent. The personal representative will review each claim to confirm the legitimacy of any and all creditor claims that materialize during the probate process. The personal representative is not personally liable for the debts, but instead he or she is responsible for utilizing the decedent’s assets to pay the debts, as required by Florida Statute or court order. Lastly, the executor is there to ensure that the final distribution of the assets is accomplished as stipulated in the decedent’s Last Will and Testament.
Being empowered to collect assets, pay administrative expenses and eventually responsible for making distributions, puts the executor in an extremely influential position. As such, a person looking to name a personal representative in their estate planning documents, must look for someone reliable and trustworthy to serve in the role. Ideally, you want someone who is familiar with the beneficiaries of the estate and who will treat all interested parties fairly. You also want someone who is capable of expeditiously moving forward with the administration, since unnecessary delays will only increase the likelihood of disputes, as well as increase costs of the probate proceeding. If you don’t have a family member, or close friend, that fits the bill, you should consider appointing a professional personal representative, such as an attorney from the Florida Probate Law Firm.
During a formal probate administration, the court will appoint a person to serve as fiduciary of the estate. The fiduciary oversees administering the estate, collecting assets, handling creditor claims and eventually making distributions to the identified beneficiaries. In Florida, the fiduciary in charge of the estate is referred to as the “personal representative.” Other states use the term executor (male), executrix (female) or administrator but they all refer to the same role. Executor is the term utilized for testate estates, those with a Last Will & Testament, while the term administrator is often utilized for intestate estates, those without a Last Will & Testament.
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The selection of a competent and reliable fiduciary to represent a decedent’s estate or trust can be pivotal in efficiently transferring assets in a timely and cost effective manner. A fiduciary is responsible for safeguarding the assets on behalf of a beneficiary, and has legal responsibilities to act in the best interest of the beneficiaries as well as other interested parties such as potential creditors. A fiduciary for an estate or probate is referred to as an executor, or a personal representative. A fiduciary for a trust is referred to as a trustee.
It is primarily the responsibility of the personal representative or trustee, to ensure that the provisions of the estate planning documents are honored and that the administration proceeds in a timely fashion. Selecting the wrong fiduciary can cause a number of unnecessary delays in the administration process, as well as frustration for the potential beneficiaries. If the beneficiaries are unsatisfied with how the fiduciary is acting, then they have the option of petitioning the relevant court to intervene in the administration, either by ordering the fiduciary to act, or not act, in some way. In extreme situations, an interested party may need to seek to remove the executor or trustee. Whether due to incompetence, negligence, or intentionally malicious activity, getting an executor or trustee removed can be tedious process, requiring discovery as well as hearings in front of the judge. Florida probate code provides a number of potential factors which may require the removal of a fiduciary.
733.504 Removal of personal representative; causes for removal.—A personal representative shall be removed and the letters revoked if he or she was not qualified to act at the time of appointment. A personal representative may be removed and the letters revoked for any of the following causes:
(1) Adjudication that the personal representative is incapacitated.
(2) Physical or mental incapacity rendering the personal representative incapable of the discharge of his or her duties.
(3) Failure to comply with any order of the court, unless the order has been superseded on appeal.
(4) Failure to account for the sale of property or to produce and exhibit the assets of the estate when so required.
(5) Wasting or maladministration of the estate.
(6) Failure to give bond or security for any purpose.
(7) Conviction of a felony.
(8) Insolvency of, or the appointment of a receiver or liquidator for, any corporate personal representative.
(9) Holding or acquiring conflicting or adverse interests against the estate that will or may interfere with the administration of the estate as a whole. This cause of removal shall not apply to the surviving spouse because of the exercise of the right to the elective share, family allowance, or exemptions, as provided elsewhere in this code.
(10) Revocation of the probate of the decedent’s will that authorized or designated the appointment of the personal representative.
(11) Removal of domicile from Florida, if domicile was a requirement of initial appointment.
(12) The personal representative was qualified to act at the time of appointment but is not now entitled to appointment.
Considering how costly it can be to the beneficiaries to have to deal with the removal of a fiduciary, it is important that the decedent select a competent person for fulfilling his/her wishes with regard to the estate or trust. Selecting a professional, independent personal representative with no beneficial interest in the estate, can go far to reduce tensions between beneficiaries, and to ensure all interested parties are protected.
Having a competent personal representative, aka executor, nominated in your estate planning documents will go a long way to ensuring your wishes are honored as far as the distributions of your estate are concerned. However, not just anyone can be appointed as a personal representative by the probate court. There are a few rules that must be adhered to, and it is important to know all of the fundamental elements of the probate process to fully understand who should and can be appointed as a personal representative, aka executor.
In order to be appointed the nominated party must be:
1.) Over the age of 18
2.) Non felon (must not have any felony convictions)
3.) Must be a Florida resident, or if a non-resident he or she must be a family member of the decedent.
It is important to note that the specific limitations as to who may be appointed as personal representative are in place to help ensure that a responsible party will be put in charge of the estate’s finances and will treat all interested parties fairly.
Typically, the nominated personal representative, aka executor, is someone close to the decedent, generally a family member or relative that is also a beneficiary of the estate. In Florida, the executor will owe a fiduciary duty to the estate and should be someone that can live up to this duty. Sometimes more than one person will serve jointly in the role of co-personal representatives.
When a person, agrees to be appointed as the personal representative of a particular estate, they will be required to execute an Oath of Personal Representative in which they swear to follow all applicable laws in order to administer the estate. If the personal representative breaches his fiduciary duty to creditors, or to beneficiaries, the personal representative can be sued on behalf of the estate in order to address the grievance. In extreme situations, the personal representative can even be held personally liable for damages to the estate. For example, if the personal representative collects $1,000,000 of estate assets into a bank account in the name of the estate, and then flees the country with all of that money, the beneficiaries can sue the personal representative and that person will be personally liable for up to $1,000,000, which should have come into the estate.
A personal representative should also execute an Affidavit of No Felony Convictions. If it is discovered that the personal representative does in fact have a felony record, such information should be presented to the probate court and the judge will remove the acting personal representative.
In general, both the personal representative and attorney working on your estate will expect, and be entitled to, reasonable compensation for the services they provide to the estate. These reasonable fees are often determined either contractually before offering services, or can be based off the safe harbor provisions provided by FL probate code for what fee is presumptively reasonable.
To avoid any confusion as to whether fees will be permitted, it is common practice for drafting attorneys to include a clause in estate documents that allows for the payment of fees. Even with a clause that allows for the payment of fees, the amount is often not spelled out and exact dollar figures will need to be agreed upon by the parties involved. While every situation is unique, 3% of the estate assets is considered a presumptively reasonable fee for both personal representatives and attorneys managing the administration of an estate in the state of Florida.