In the state of Florida, a formal probate process filing is required for any estate that is valued at $75,000 or higher. Probate is the formal legal process that is used in every state to help transfer assets from the name of a deceased person to his heirs and beneficiaries. Probate also helps close the estate by paying off all outstanding debts and making sure the terms of the decedent's will are carried out according to his wishes.
Leaving Debt Behind
Many people pass away while still owing some type of unpaid debt. By law in most states however, the decedent's assets -- or items they own that have some value -- are used to pay those debts so that surviving family members and beneficiaries do not need to.
Estate Assets
In the state of Florida a probate case must be opened for any estate that is worth at least $75,000. If a woman owns a home and passes away for example, her home is an asset of value that is counted as an estate asset. Motor vehicles, retirement and bank accounts, investment accounts and collectible items are all potential assets of a decedent's estate.
Assets Pay for Debts
Florida has an informal probate process for estates that are valued at less than $75,000. This process, disposition without administration, works in a similar way to formal probate procedures. Assets of the estate are used to pay off any outstanding debts, even if that means some assets need to be sold in order to generate cash for debt payments. If the estate does not contain enough assets of value to cover the outstanding debt amounts, the Florida probate judge usually orders debts to be paid in a specific order and some creditors may be required to accept a percentage of the total amount owed on the debt account. If needed, creditors may be ordered to write off the debt as a loss.
Life Insurance is Non-Probate
Life insurance is a type of asset that automatically gets paid to the individual who is named as the beneficiary of the policy. Because there is a named beneficiary, the life insurance proceeds are not included as an estate asset in the probate process. Life insurance income goes directly to the beneficiary and is not used to pay off outstanding debts the deceased left behind.
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