Summary Administration: Florida & New York

BARRY:
Hello, welcome back to Coordinated Counsel. Today we’re getting into summary administration in Florida. I’m pleased to be here today with Cristin, Shelbie, Kaleem, and Joe. We’re going to make it quick, easy, and cover what you need to know — along with some really interesting, thought-provoking points.

Let’s start with: what is summary administration in Florida? And I definitely want to hit on other states and whether they have something similar.

I would describe summary administration as an abbreviated — a shorter — administration for when you pass away and need to get your affairs in order. Remember from our last episode we talked about the ABCs: assets, beneficiaries, and creditors. Typically, summary administration is appropriate when you have an estate that is smaller than $75,000. I always remind clients that that value does not include the primary residence — what we call homestead here in Florida. So if you have a $10 million house and $50,000 in the bank, you could still qualify for summary. Whether it’s the right approach is a whole other story — we’ll get to that in a minute.

There are two ways to qualify. First: $75,000 or less in assets. Second: your loved one has been deceased for 2 years or more. We’re going to talk about some really interesting aspects of both in today’s episode.

CRISTIN:

The next thing to cover is what assets are subject to the summary administration process. Typically, those are the assets that are in the decedent’s name — a house in their name, a bank account in just their name. Those are the assets we typically see in a summary administration.

BARRY:

And to clarify — even though I’ve practiced in both New York and Florida — when we’re talking about real property in summary administration, we’re specifically talking about homestead property.

CRISTIN:

Right. There’s virtually no property in Florida worth less than $75,000 these days.

BARRY:

Exactly. So there is no dollar-value threshold on homestead property. Technically, it’s a non-probate asset — even though it has to go through probate for title purposes. That frustrates everyone involved, but it is what it is.

So assets in the decedent’s name alone are subject to summary administration. What would not be a probate asset? How do people distinguish between different forms of ownership? Shelbie, what do you think?

SHELBIE:

If it’s owned jointly with someone else, or if there’s a named beneficiary or a payable-on-death designation.

BARRY:

What about assets in a trust?

SHELBIE:

Those too — all examples of where the decedent doesn’t own it in their name alone.

BARRY:

Correct — unless the beneficiary is the estate itself, which does happen occasionally. Payable-on-death, transfer-on-death, joint tenancies, and various types of trusts — all good examples of assets that don’t go through the probate process at all. In another episode, we’ll talk about how assets can be brought into the process, but that requires an affirmative action and is beyond the scope of today.

Next question: do you need an attorney to do a summary administration in Florida? Cristin?

CRISTIN:

Technically, no. But probate is full of details. There are statutes and rules you have to follow — creditor notices, homestead property rules. If you make a mistake, it can delay everything. It’s easier to have an attorney make sure it’s done correctly.

BARRY:

That sounds self-serving — attorneys telling you to hire an attorney when you’re not legally required to.

JOE:

Everything is electronic these days. If you’re trying to do it yourself, you have to figure out how to file things electronically, how to handle orders electronically, and then deal with all the rejections that come back from judges.

BARRY:

Judges, case managers, clerks — each county is different. They have different rules, different policies, different requirements for everything. You can do it on your own, and I tell clients that — especially when it’s a small amount of money. But I also tell them: you’re likely going to run into trouble. We do this all the time and we still encounter friction. So yes, it sounds self-serving, but it really is a challenge.

CRISTIN:

Unfortunately, if clients try to do it themselves and run into trouble, it’s going to cost more to bring an attorney in to clean it up.

BARRY:

And it will take longer than it originally would have. Timing matters too — we’ll talk about how that can affect your strategy and decision-making.

On timing: in our last episode, we discussed that the summary administration process in Florida typically takes 3 to 6 months. I tell clients 3 months because there is a 3-month period during which you have to wait after giving notice to creditors for them to come forward and make a claim. It cannot possibly take less than 3 months — and that doesn’t count the time to get retained, meet with the client, prepare the filings, get them accepted, and so on. Cristin?

CRISTIN:

The caveat is: if your loved one has been gone for more than 2 years, there are certain things you don’t have to wait for, so it could be completed in less than 3 months.

BARRY:

That’s fair. If your loved one has been deceased for more than 2 years, you don’t have to publish notice to creditors because of something called a statute of repose — which most people have never heard of. A statute of limitations is different: it’s a moving target that can be extended for discovery or fraud. A statute of repose in Florida is a hard 2-year deadline. No exceptions, no extensions. It is a hard deadline on creditors’ claims, and that’s why filing after 2 years means you don’t need the creditor publication period at all.

Now — you have formal administration as well as summary administration. Is there a preferred method? Summary sounds better on the surface, but is there actually a preferred method? Cristin?

CRISTIN:

Every attorney has their preference, and it depends on the situation. Formal administration allows a personal representative to be appointed with broader authority. There are certain circumstances where summary is more appropriate. But every attorney is different.

BARRY:

Our analysis is this: while you may qualify for summary in one of the two ways I described, you may still want to choose formal for strategic purposes.

For example, clients often come to us needing to sell homestead or real property right away — it’s too expensive to carry, there’s no insurance, there are many reasons you might need to sell quickly. In a summary administration, you can’t really do that until you’re done — until the property title vests in the name of the beneficiary. You have that waiting period of 3 to 6 months, and longer if there are problems.

In contrast, in a formal administration, someone is appointed as a personal representative — or executor, as it’s called in New York. Joe, what’s it called in Georgia?

JOE:

Executor and executrix.

BARRY:

To clarify — executor and executrix apply when there’s a last will and testament. When there’s no will in New York, it’s called an administrator.

In Florida, it’s a male/female designation. In a formal administration, the personal representative or executor is appointed by the court and has the legal authority to act on behalf of the estate — including selling real property. The proceeds go into an estate bank account. The asset converts from real estate to cash and stays in the estate, so everyone can account for it. We can move much faster.

But to the point about county-by-county differences in summary — formal administration is the same way. It really requires understanding the venue you’re operating in.

So if you need to sell homestead real property quickly, you might want to do formal instead of summary — even though you qualify for the seemingly cheaper and faster alternative. What are other reasons you might want to choose formal?

JOE:

If you have to discover assets. In a summary administration, you have to be specific in the initial pleadings about what the assets are and their approximate value. If you don’t know that, you’d want formal administration to figure it out.

BARRY:

Say the deceased had a Schwab account — can’t you just say “all assets at Schwab, to be distributed to so-and-so”? That’s identifiable. Isn’t that specific enough?

KALEEM:

Easy.

JOE:

But if we don’t know how much is in it, the court isn’t going to take our word that it’s under $75,000.

BARRY:

Exactly. The answer is no. You have to be very specific — account number 123 at Schwab, worth $65,462.85.

JOE:

Yes.

BARRY:

What about assets that aren’t so easily valued?

I’ll answer that in two parts. First: assets you don’t even know exist. You have to canvas for assets and find them. Sometimes people pass away and their families have no idea what they owned. Did they have life insurance? Annuities? IRAs, 401(k)s, bank accounts, brokerage accounts, stocks, bonds, real estate, boats, vehicles? You have to find all of it. And the only way to do that is to have a personal representative or executor — what’s it called in Missouri?

SHELBIE:

Personal representative.

BARRY:

You have to have the legal authority to go to a bank or institution and say: “Tell me what you have.” If you walk into a bank and say your relative passed away — can I have the assets? — you’re going to get a letter telling you to get certain documents, go to court, and hire a lawyer. Same routine everywhere.

The second part is how to value those assets — a house, a car, something that doesn’t have a neat bank balance on a statement.

JOE:

You have to value them and put them on the inventory. Also important for tax purposes.

BARRY:

There’s no inventory in summary administration. And if it’s homestead, you don’t need a value.

JOE:

Right — I was thinking in formal mode. There’s no inventory in summary — it goes on the petition.

BARRY:

Typically you need a valuation. Real estate is relatively straightforward. Business valuations can run $15,000 to $25,000 easily — a lot goes into them. We’ll have a guest speaker on valuations in a future episode.

Intellectual property is another area. We once had a musician pass away with a long list of copyright-protected songs that had to be valued and transferred. And lawsuits: if you have a wrongful death or untimely death, the family may want to initiate a lawsuit. You cannot do that unless a personal representative or executor is appointed to act on behalf of the estate. So that connects asset discovery, pursuing claims on behalf of the estate, and Joe’s point — the value is a question mark until you know what it is.

There are cases where you’d strategically choose formal even though you otherwise qualify for summary. Kaleem, why would we do that?

KALEEM:

The biggest reason is to limit creditors’ claims. You mentioned the hard 2-year deadline — but you can shorten that to 90 days by doing a publication. So even if none of the decedent’s assets are going through probate, it can still be smart to open a summary administration just to run that publication and cut the creditor period short.

BARRY:

But why does it matter? Two years isn’t that long. Why would you want to do that?

KALEEM:

Beneficiaries want their money. The sooner you resolve creditors, the sooner you can distribute.

BARRY:

We advise clients to open a summary administration for the sole purpose of publication — to condense that creditor period from 2 years down to 3 months — because sometimes you have adversarial beneficiaries. Not just impatient ones, but threatening, demanding people. And if something goes wrong with a creditor and you didn’t take this step, you — as a fiduciary, whether a trustee, personal representative, or executor — could be personally liable for having reduced a beneficiary’s interest when you could have avoided it. It’s very common and very prudent to do that, unless you have a fully cooperative family.

Now — converting between summary and formal. What’s that about?

KALEEM:

It’s straightforward, especially when it comes to assets. Sometimes you start a formal administration and later find out the estate is under $75,000, so you petition to convert to summary. Or you start summary, discover there are more assets than expected, and you petition to convert to formal.

BARRY:

The example that comes to mind: a client was certain — despite us asking them to confirm — that an account was co-titled as joint ownership and that the estate was under $75,000. They were wrong. The estate exceeded $75,000, so we had to go through the conversion process — which cost more time and expense than simply starting with formal from the beginning.

What about compensation? In summary administration — Cristin?

CRISTIN:

The person signing the pleadings is called the petitioner, not a personal representative or executor, and they receive no compensation — regardless of how much work they put in.

BARRY:

How is that fair? There is real work involved.

CRISTIN:

There is. Document gathering, signing paperwork, getting other beneficiaries on board — yes, there’s meaningful work involved.

BARRY:

And that’s another factor that might lead you toward formal administration — depending on the size of the estate, the nature of the creditors, and everything involved. It could make sense.

CRISTIN:

Absolutely.

BARRY:

To recap: summary administration is the shorter version. You qualify one of two ways. You may still want to choose formal for strategic reasons — summary isn’t always the best solution even when you qualify. You don’t have to hire an attorney, but going it alone is probably not your best bet.

One more topic — New York. Does New York have a summary equivalent? Cristin?

CRISTIN:

Yes. It’s called voluntary administration, or small estate administration. It covers personal property only — no real property — and the estate must be under $50,000. The program is designed for individuals to complete without an attorney. It’s a $1 filing fee. The courts help you with the forms, there’s an online program, and it can be completed in as little as 3 weeks.

BARRY:

A dollar?

CRISTIN:

Literally $1. It’s a very simplified process. The courts actively want individuals to do it without attorneys.

BARRY:

That is the polar opposite of summary administration in Florida.

Missouri — Shelbie, does Missouri have something similar?

SHELBIE:

Yes — it’s called a small estate affidavit. It’s for estates of $45,000 or less and can cover any asset — real estate, personal property, titled property. If it’s under $45,000, it’s handled under a small estate.

BARRY:

$45,000 — that’s a shed in South Florida. What about Georgia, Joe?

JOE:

There are a couple of different kinds of probate in Georgia. There’s solemn probate and regular probate, depending on whether you have a will, and there is an asset limitation.

BARRY:

Solemn probate — that name is entirely appropriate.

One more thing in Florida that we don’t often do: it’s called disposition without administration. It’s for estates with $6,000 or less in assets, and it’s very specific about what those assets are and what they’re used for. We tell clients to handle this themselves — it’s not something that makes sense for us to take on, and the estates we work with generally far exceed $6,000.

What about vehicles in Florida? Does the DMV allow a title transfer without a summary administration?

KALEEM:

About 8 times out of 10, yes. The DMV will do it if you bring the will or the trust. They may require a few steps — you go in person, make appointments, fill out forms from multiple parties — and eventually you’ll get the title changed. It takes a while, but you’ll get there. In more contested matters, there are also petitions and court orders — like a family allowance — that can carve out specific assets, including a vehicle.

BARRY:

Thank you all for participating. We’re wrapping today on summary administration. The next episode is on formal administration — looking forward to getting into it with you. Stay tuned.