The Personal Representative is responsible for gathering the assets of
the decedent into the probate estate and safeguarding the assets for the
benefit of the beneficiaries. However, before the assets can be distributed
to the beneficiaries, the Personal Representative has to determine if
there are any creditors of the decedent.
Creditors are identified in two different ways. The Personal Representative
publishes a Notice to Creditors in the newspaper. This is the public notice
that tells anyone who feels they are owed money by the decedent that now
is their chance to present a claim for payment. In addition to publishing
the public Notice to Creditors, the Personal Representative has to send
an individual Notice to Creditors to any known creditors or creditors
that it is reasonable to expect that the Personal Representative would
know about by reviewing the records of the decedent.
Once the claims are filed, creditors are paid based upon which priority
class they fall into. The priority classes are set by the Florida statutes.
If there are enough assets in the probate estate, then all the creditors
with valid claims are paid. If there are not enough assets in the probate
estate then all the priority class 1 creditors with valid claims are paid
and then if there is money left the chance for payment moves to priority
class 2 creditors with valid claims etc.
In general, once all the creditors are paid then the remaining assets can
be distributed to the beneficiaries. However, there may be certain assets
that are considered exempt from the claims of creditors and the Personal
Representative is responsible for working with the probate attorney to
identify these assets and follow the procedures necessary to have them
deemed exempt assets.
It is very important that the Personal Representative closely follow all
the steps in the creditor identification and payment process because the
Personal Representative could be personally liable for payments that are
paid or denied inappropriately.