Why Summary Administration is NOT always the best choice

In Florida Probate Tips by Long

Summary or Formal Administration
In a nutshell, Summary Administration in Florida is a type of probate proceeding for small estates.

To be eligible:

  1. The estate must contain less than $75,000 in non-exempt assets (typically, assets other than the decedent’s home) OR
  2. At least 2 years have passed since the date of death

No brainer right?

Not exactly.

Lately, I’ve had to remind clients and prospective clients that summary administration has disadvantages.  Not long ago, I discussed the pros and cons of summary administration vs. formal administration and it became clear that I didn’t emphasize the cons very well.

The number one thing you must know about summary administration is that a personal representative  (PR) is not appointed by the court.

In Summary Administration, there is a petitioner, but no PR.  A petitioner does not have the same license to inquire, collect, manage or dispose of assets in the same manner that an appointed PR does.

Example:  A recent client (let’s call him Frank) hired us to handle what appeared to be a relatively straightforward summary administration.  The assets included a homestead (the decedent’s home), 2 cars and a checking account.  That was it.  No other assets.  Frank was sure of it!

Thankfully, Frank’s not a betting man because 3 months later, he learned that there was another asset…approximately $40,000 worth of CDs that the decedent, Frank’s mother, never mentioned.  Because the designated beneficiary was the decedent’s husband (who died a year earlier), the proceeds were now part of her estate and required probate.

The CDs were at the same bank where the checking account was held, but the bank representatives never told Frank about them.

Why not?

Because Frank had no authority to inquire about other assets at the bank and the bank reps had no legal authority to discuss other accounts with Frank – unless – he was the appointed PR!

Coming full (vicious) circle, recall that Frank chose summary administration and as a result, he was not appointed PR, which limited his ability to inquire about other assets.

So what now?

Luckily, all we had to do was amend the summary administration pleadings to reflect the CD’s and reopen the case briefly.  But what if there are more assets mom didn’t tell us about?  What if Frank wanted to do some more digging?

Florida probate rules allow a petitioner to convert a summary administration into a formal administration if need arises, but I’m not going to sugar coat it, amending pleadings and converting case types takes time and can be frustrating.

Other reasons summary administration might not be best:

  • The decedent’s assets are known, but there is a wrongful death lawsuit in the works which may require an appointed PR to prosecute the case (as a representative of the decedent’s estate.)
  • There might be Federal Tax liens (IRS) or back taxes owed (the IRS can clean out an estate in a heartbeat), and an appointed PR needs to negotiate with big brother
  • There are lots of creditors who will undoubtedly require a formal accounting in order to even consider negotiating a debt settlement – formal accountings are an element of formal administration only
  • A property is in foreclosure and an appointed PR is necessary to discuss alternatives with the bank
  • There are rent payments which need to be deposited asap (before those tenants think they are living rent-free!)

There are other applicable situations which warrant a formal administration but the point is clear – every case is different.

Yep, no matter how simple you think it is.

Sidebar:  If I had a dollar for every time a prospective client told me how easy and simple their probate was going to be…

When you’re ready to talk to an attorney, check that, a Florida Probate attorney, about your matter, be prepared with to list all of the assets and discuss all of the variables that might help determine the best type of probate administration to choose.