When creditors make claims on your loved one’s estate in Florida

What you need to know about settling debts in Florida after someone dies

• In Florida, you are required to notify creditors that your loved one has died, so that you can settle their debts.

• State law requires that you publish a notice to creditors in a local publication for two consecutive weeks.

• In addition, the representative of the estate is expected to do their best to personally contact any creditors.

• After your loved one dies, creditors in Florida have two years to make any claims.

• Debts are settled in an order set by state law. If the estate runs out of money before a creditor is paid, then they will not be reimbursed.

Fielding aggressive phone calls from creditors, opening scary-looking notices, and even dealing with illegal collection are unpleasant tasks on top of the pain and grief of loss.

Unfortunately, resolving debts is a necessary part of the probate process after a loved one dies. But before you pay any debts in Florida, make sure you understand the process.

Specific state laws protect the estate, as well as creditors. And, most importantly, there is an order of priority that must be followed in settling debts.

First step: Notify creditors

The estate’s personal representative is responsible for alerting creditors to your loved one’s death to give them the necessary time to make any claims.

First, a notice to creditors must be published twice, one week apart, in a publication in the county where your loved one lived. State law mandates that the following information be included:

• Your loved one’s full legal name.

• The file number that has been assigned to the estate.

• The court (and its address) where it will be filed.

• The name and contact information of the estate’s personal representative.

• The name and contact information of the personal attorney (if there is one).

• The date of the notice’s first publication.

• A statement that creditors can only file their claims within a certain period of time (as stipulated under Florida Statute 733.702 and 733.710).

Proof of publication of the notice to creditors must be filed with the court within 45 days of the first day it was published. Florida also requires that the representative of the estate do their best to personally contact any creditors that they might be aware of.

Creditors typically have three months from the date the notice is published to file claims against the estate. With known creditors, a personal representative can speed up probate by sending them a separate document, known as a Formal Notice, that gives them 30 days to respond.

Creditors who did not receive notice to creditors, however, can make claims for as long as two years from the date of death.

Throughout this period, the personal representative must make a list of all known and potential creditors and file this with the court.

The order for paying creditors in Florida

Even if the estate doesn’t have enough money to pay all the debts it might have left behind, there’s still an order that’s to be followed in regard to which of the creditors will be paid first.

According to Florida law, the obligation of payments is broken up into classes:

Class 1: Costs and expenses of the estate’s personal representative, and attorney fees.

Class 2: Funeral costs up to $6,000.

Class 3: Taxes and debts with preference under federal law, such as Medicaid debt.

Class 4: Hospital and medical expenses of the last 60 days of your loved one’s life, if applicable.

Class 5: “Family allowance,” which is money set aside to maintain a surviving spouse and children. This amount can be paid for up to a year after your loved one’s death.

Class 6: Past-due child support.

Class 7: Debts related to your loved one’s business, if they had one. These are paid only from their business’ assets, not their personal assets.

Class 8: All other claims.

It’s only after all debts are paid that the beneficiaries can receive anything from the estate. If there is nothing left, or not even enough to cover all the debts, then those of lesser priority (as in, the furthest down on the list) won’t be reimbursed.

Assets that creditors can claim

Although creditors do have a right to post claims against the estate in order to settle debts, non-probate assets are usually off limits.

For example, in Florida, the homestead is exempt from probate but only if the property is the place where your loved one lived during their lifetime.

If there’s property that can’t be determined as being the actual homestead under the Florida Constitution, then creditors can step in to demand that it be sold so they can collect their debts.

A way to possibly get around this is to petition the court in the hopes of receiving an order that states that the status of the property is the homestead, officially making it non-probate and out of the grasp of creditors.

Creditors and the assets of a spouse or adult child

When it comes to settling a debt, some creditors will go to great lengths to do so.

Some will even go so far as to demand that the surviving spouse, an adult child, or another family member is responsible for repaying the debt of the person who has passed away, but that’s not true.

When it comes to asset protection from creditors, the laws in Florida play in favor of the family—as long as things are filed correctly.

For example, life insurance policies are protected from creditors unless the policy has to go through probate. The reason a policy might have to go through probate would be if your loved one never listed a beneficiary.

This error would make the policy’s proceeds a probate asset, and creditors could make claims against it.

In regard to filial responsibility laws, meaning the family could be liable for paying for their loved one’s long-term care after they pass away, Florida doesn’t currently have these laws in place as other states do.

The only way a family member could be held liable to cover these costs is if they signed a contract with the care facility in which they agreed to be responsible for the expenses.

Paying back Medicaid in Florida

However, Medicaid is a different story. In Florida, both the federal and state law regard Medicaid as a debt that must be reimbursed if the person was over 55 when they passed away. Although this reimbursement doesn’t technically come out of the pockets of the family, it does come out of the estate. 

While there are protections in Florida that help family members avoid losing assets to creditors during probate, there are certain circumstances and laws in which the creditors will find a way to be reimbursed. With this in mind, it’s important to be aware of what they legally can and can’t claim, and not just take the creditors’ word for it.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.