Personal Representative Compensation

Personal Representative Compensation

personal representative compensation, attorney fees, and other professionals whose services ARE required in administering the probate estate – are entitled by law to reasonable compensation.

Personal RepresentativePersonal representative compensation is usually determined in one of these five ways:

1. As set forth in the will; 

2. As set forth in a contract between the personal representative and the decedent;

3. As agreed among the personal representative and the persons who will bear the impact of the personal representative’s compensation;

4. The amount presumed to be reasonable as calculated under Florida law, if the amount is not objected to by any of the beneficiaries; or 

5. As determined by the judge

Personal Representative CompensationA Personal Representative Must Be Appointed by a Judge Before He or She Can Serve.

If the decedent’s will designated a personal representative, the judge will decide if that person is qualified to serve. A circuit court judge supervises or presides over probate administration and also rules on the validity of the decedent’s will. If the decedent died without a will, the judge will consider evidence to confirm the identities of the decedent’s heirs as those who will receive the decedent’s probate estate.

If the designated personal representative meets the statutory qualifications, the judge will issue “Letters of Administration,” also referred to simply as “letters.” These “letters” are important evidence of the personal representative’s authority to administer the decedent’s probate estate.

The judge will hold a hearing, as necessary, to answer any questions or to resolve disputes that arise during the course of administering the decedent’s probate estate. The judge’s decision will be set forth in a written direction called an “order.”

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868  

Some of the content of this information is courtesy of The Florida Bar and represents general legal advice. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

IRS and Estate Taxes

The IRS, Estate Taxes and Personal Representative

IRS and estate taxesA personal representative has the responsibility to pay estate taxes owed by the decedent or the estate to the IRS.

Estate taxes are normally paid from probate assets in the decedent’s estate, and not by the personal representative from his or her own assets. However, under certain circumstances, the personal representative may be personally liable for taxes due to the IRS  if they are not properly paid.

Estate taxes and the IRSThe estate will not have any tax filing or payment obligations to the State of Florida. However, if the decedent owed Florida intangibles taxes for any year prior to the repeal of the intangibles tax as of January 1, 2007, the personal representative must pay those taxes to the Florida Department of Revenue.

The decedent’s death has two significant tax consequences. It ends the decedent’s last tax year for purposes of filing the decedent’s federal income tax return, and it establishes a new tax entity, the “estate.”

The personal representative may be required to file one or more of the following returns, depending upon the circumstances:

The decedent’s final Form 1040, Federal Income Tax Return, reporting the decedent’s income for the year of the decedent’s death.

  • IRS estate taxesOne or more Forms 1041, Federal Income Tax Returns for the Estate, reporting the estate’s taxable income.
  • Form 709, Federal Gift Tax Return(s), reporting gifts made by the decedent prior to death.
  • Form 706, Federal Estate Tax Return, reporting the decedent’s gross estate, depending upon the value of the gross estate.

The personal representative may also be required to file other returns not specifically mentioned here. 

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868  

Trust and Trustee

Trustee Responsibilities for an Estate.

Trustee: If the decedent had established what is commonly referred to as a “Revocable Trust”. to work properly, assets must be transferred to it. 

Important: Titles must be changed from an “individual” name to the name of the revocable living trust. Because the name is no longer in the titles, there is no reason for the Florida probate court to be involved. What happens if the Trustee becomes incapacitated or when the person dies? The estate assets in the decedent’s revocable trust are a part of his or her gross estate. – Mainly for the purposes of determining federal estate tax liability.

TrustWhen a Revocable Trust is executed, the Trustee is usually the person who executed the trust.

Married couples are often co-trustees. When one dies or becomes incapacitated, the surviving spouse continues to handle the finances with no other actions required. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. However, they are ultimately responsible to the beneficiaries for prudent management of the trust assets. Therefore they should also consult with an experienced estate planner and trust attorney.

The Settlor of the trust could appoint another person or financial institution as the Trustee of their revocable trust. If you have been named as a current Trustee or Co-trustee, you may already be acting in that capacity. So you need to be aware of your duties and responsibilities as trustee of the estate.

Trustee and Court ClerkThe Trustee is always required to file a “Notice of Trust” with the clerk of the court. It should be in the county in which the decedent resided at the time of the decedent’s death. The purpose of the notice is to make the decedent’s creditors aware of the of the trust’s existence. They have rights to enforce their claims against the trust assets.

All of the tasks which must be performed by a personal representative, in connection with the administration of a probate estate, must also be performed by the Trustee of a revocable trust. They generally will not need to file the same documents with the clerk of the court. Furthermore, if a probate proceeding is not commenced, the assets comprising the decedent’s revocable trust are subject to a two-year creditor’s claim period, rather than the three-month non-claim period available to a personal representative.

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868