When someone dies, their estate goes through probate. This is where the executor of the estate gathers all the assets and makes an accounting of all debts or liabilities. In Florida, creditors have a certain window of time, typically within three months after the first notice to creditors is published, to submit claims for what’s owed, and the executor is responsible for paying these debts from the estate’s assets.
So, do estate creditors always get priority?
Yes, generally, creditors have a priority claim, but there are exceptions and specific rules that govern the order of payment. In Florida, the order of payment is determined by the state’s probate laws and the specific circumstances of the estate.
A homestead exemption can protect a primary residence’s value from creditors, but it’s not a complete shield. For example, if the decedent had a mortgage on the homestead property, the mortgage holder can still foreclose on the property to collect the debt, even if the spouse or minor children are entitled to a homestead exemption.
Certain statutory entitlements, such as the spousal elective share (30% of the estate), child support or Medicaid reimbursement, may take priority over creditor claims.
Not all assets may be subject to creditor’s claims. For example, assets held in a living trust might not be part of the probate estate, though a revocable trust does not protect assets from creditors.
Navigating the probate process can be overwhelming. Seeking legal advice from an estate attorney can be beneficial, especially if there are disputes among heirs or if the estate has significant debts. An attorney can clarify which debts are valid and sort out any other issues.
While creditors generally have a priority claim on the estate’s assets, there are exceptions and specific circumstances where heirs may receive assets before creditors are paid. It’s essential to understand these exceptions and the probate process in Florida.