Probate Administration and Taxes


Probate administration requires a careful examination of the decedent’s assets. These should be both identified and claimed. After that, debts and estate and income taxes will need to be paid. Only after these steps are taken will the remaining assets be transferred to beneficiaries. If you are dealing with probate administration and taxes, you may have a lot of questions. The experienced Ocala probate attorneys of the Dean Law Firm can help you navigate all aspects of this process.

There are two kinds of probate administration in Florida: summary administration and formal administration. Probate is needed to pass a decedent’s probate assets to a decedent’s beneficiaries. When there is a valid will, the will needs to be admitted to probate in court, or it will not be effective to pass ownership. If the decedent didn’t have a will, probate is needed for ownership of probate assets to pass.

Probate courts need to make sure that personal representatives or executors carry out their duties during estate administration. The personal representative gathers assets. If an asset doesn’t have a joint owner or a particular beneficiary designation, it’s deemed a probate asset. Probate assets can include real property, stock titled only in the decedent’s name, and bank accounts.

After gathering the assets, the personal representative files an inventory of probate assets with the court before paying bills and filing tax returns. Usually, the personal representative needs to get a federal tax ID number on behalf of the estate and open an estate checking account. The personal representative is also responsible for things like selling real estate and vehicles, and liquidating or transferring probate assets. A seasoned probate lawyer can provide guidance regarding the details of this process.

Debts, including taxes, need to be paid prior to making estate distributions. The personal representative needs to file a report regarding claims filed with the probate estate. The probate estate won’t be closed unless claims are paid or otherwise closed.

The date of death establishes the decedent’s last tax year for purposes of federal income tax returns. It also generates the entity to be taxed as the estate. The personal representative will likely need to file multiple returns, including a federal income tax return for the estate and a federal estate tax return. The federal estate tax return reports the decedent’s gross estate, depending on the gross estate’s value. A personal representative can also be asked to file other returns. Generally, an estate does not have a tax filing or payment obligation to the State of Florida. However it is important to be aware that there are circumstances under which a personal representative could become personally liable for paying certain taxes if he or she didn’t pay them appropriately on behalf of the estate.

When an estate doesn’t need to file a federal estate tax return, the final account and other documents needed to close the probate estate must be paid within 12 months after the court issues Letters of Administration to the personal representative. This amount of time can be extended. When the estate must file a federal estate tax return, the return will be due 9 months after the date of death, but this deadline can also be extended. There are twelve months given to do the final accounting and other documents, but the timeline can be extended when needed.

The length of time needed for the probate process can vary, as can the rules an estate may be subject to based on the circumstances. If you are concerned about probate administration and taxes in Ocala, you can consult a knowledgeable lawyer to provide you with guidance. Michael E. Dean and Timothy S. Dean of the Dean Law Firm have decades of combined experience representing clients. Call us at 352-387-8700 to set up a free consultation or contact us online.