What happens to your debts and liabilities under Florida law when you die?

by Kellen Bryant

With the economic climate we are in, my question here is very relevant.  There are tons of foreclosures going on and people are losing the jobs.  It makes sense that some folks end up passing away with a lot of debt.  Now, what happens to this debt if you pass away in Florida or if a family member passes away in Florida.

There are several results:

Debts of the deceased go unpaid

In this case, the creditors go home unhappy.  In the early life of this blog, I talked about how you do not need to pay a deceased person’s debts in Florida.  Indeed, a creditor gets paid when someone dies in Florida if the decedent had some assets.  The dead person’s family does not have to pay the bills out of their own bank account.  This is good.

Some debts are paid in probate, some are not

In some instances, the probate estate may be insolvent.  Some will believe that it will not be worth the time and attorney fees to try to probate a will where you end up paying mostly creditors.  In some instances, this might not be the case.

  1. Probate administration costs are the first creditors to be paid.  Personal representative’s fees are considered administration costs.  So why not at least get a personal representative’s fee out of the estate along with the exempt assets.
  2. You might also be able to get a family allowance up to $18,000 if the debts are not too bad.
  3. In the best scenario, the creditors do not show up at the probate court and they lose their claim to the debt completely.

Some debts could be paid, but certain assets are exempt from being used to pay the debt in Florida probate

If the decedent owned a Florida homestead residential property, then the deceased person’s homestead will pass according to the will or trust (if devised to a family member), or intestate law free of the debt.  However, if there is a mortgage, back taxes owed, or unpaid construction workers, then you may have some more issues to deal with.  Vehicles can pass to family members free and clear of the decedent’s debts.  The household furnishings up to $20,000 are exempt from being used to pay the decedent’s debts.

 Putting debts and death all together

Somehow through my writing of this blog post, I did not directly answer the question above.  Well, I will give the typical lawyer answer, “It depends.”  If your family member died in debt, there are still things you can do to get money or assets to the beneficiaries free and clear from the deceased’s debts.

 

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