When a person passes away, you may find yourself in a situation where the deceased person (Decedent) owns a piece of property, and the heirs of that person want to sell it. The heirs oftentimes hire an agent, list the property, get a contract, deposit escrow, schedule inspections, and then realize that the title company is requiring a probate as a requirement to close. This is because the property is still in the name of the Decedent, and there has not been a legal devise out of the Estate. The title company needs to know who the owner of the property is as a prerequisite to closing the transaction because they need to know who can legally sign the closing documents. 

In short, a requirement for Probate means that the Decedent’s assets and debts need to be located and accounted for, and any remainder needs to be distributed to the beneficiary(ies). Further, the exact beneficiaries need to be determined because it will depend on whether any Trusts/Wills/Enhanced Life Estate Deeds/Pre-Nuptial/Post-Nuptial Agreements or other Estate Planning documents are available for the Decedent, or whether the Decedent died “Intestate” (without a will). There are two main types of probate administration under Florida law that you will run into as a real estate agent: Formal Administration and Summary Administration. 

FORMAL ADMINISTRATION:

Formal Administration is required when the assets of a deceased person are valued at $75,000.00 or more and the Decedent has been dead for less than two (2) years. Most clients will fall into this category because (1) the value of non-homestead property pushes them past the $75,000.00 threshold, and (2) the heirs want to sell the property within two years following the death of the Decedent. This is a “full” probate and could take more than six (6) months to complete. This is the most complex form of probate, and it will be the costliest. Clients will always ask how much a Probate is going to cost. That answer ultimately depends on many factors, but for general guidance see Florida Statute § 733.6171(3): 

“[C]ompensation for ordinary services of attorneys in a formal estate administration is presumed to be reasonable if based on the compensable value of the estate, which is the inventory value of the probate estate assets, and the income earned by the estate during the administration as provided in the following schedule:

(a) One thousand five hundred dollars for estates having a value of $40,000 or less.

(b) An additional $750 for estates having a value of more than $40,000 and not exceeding $70,000.

(c) An additional $750 for estates having a value of more than $70,000 and not exceeding $100,000.

(d) For estates having a value in excess of $100,000, at the rate of 3 percent on the next $900,000.

(e) At the rate of 2.5 percent for all above $1 million and not exceeding $3 million.

(f) At the rate of 2 percent for all above $3 million and not exceeding $5 million.

(g) At the rate of 1.5 percent for all above $5 million and not exceeding $10 million.

(h) At the rate of 1 percent for all above $10 million.

SUMMARY ADMINISTRATION:

Summary Administration is a second type of Probate in Florida. A Summary Administration is only available if the value of the estate is less than $75,000 (the homestead property does not count toward the $75,000.00), OR if the Decedent has been dead for more than two years. This type of Probate is an ideal type of Probate for a client as it is usually finished within three (3) to six (6) months and can be completed for less money than a Formal, generally speaking. 

AGENT PERSPECTIVE:

The length of time a Probate takes is dependent on many factors, including but not limited to, the County, the Judge, whether the property is Homestead property or whether it is investment property, whether the Decedent was married and/or had children, whether the Decedent had adequate estate planning documents in place, whether there are creditors to the estate, whether the creditors actually make a claim against the estate, and whether a Formal or Summary Administration was required. 

If you are going to list a property, make sure you are checking who the owner is. If the owner is listed as “Estate of (name of Decedent),” or if you are dealing with an heir of the property instead of the owner, make sure you do your due diligence prior to accepting the listing for the sake of your own time. Oftentimes Seller(s) will walk away from a deal when they find out they have to probate the property. You want to minimize the amount of time you invest in the transaction by asking the title company to run your title search to see if they will call for a probate requirement BEFORE OR SIMULTANEOUSLY WITH SIGNING THE EXCLUSIVE LISTING AGREEMENT. If you do not watch for this, eventually you will take a listing, pour dozens or hundreds of hours into it, then find out that it cannot close (or the seller simply will not close) due to Probate related issues.