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The Complete Guide To Creditor Claims In Florida Probate

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A creditor claim in Florida probate is a claim filed by a person or entity (a “creditor”) that the decedent owed money to at the time decedent died.  A creditor must file a timely statement of claim in the probate estate in order to pursue satisfaction of their creditor claim.

Unless creditors’ claims are barred, every personal representative is required to cause notice to creditors to be published and served.  Section 733.701, Fla. Stat.

 

What Is The Deadline To File A Creditor Claim in Florida Probate?

  • 30 days after the date of service of the notice to creditors on the creditor
  • 3 months after the first publication of the notice to creditors
  • 2 years from date of death for known or reasonably ascertainable creditors who did not receive notice to creditors

These deadlines can be broken down into deadlines applicable to known or reasonably ascertainable creditors and unknown creditors.

Creditor Claim Deadlines For Known or Reasonably Ascertainable Creditors – Up To Two Years

If you are a known or reasonably ascertainable creditor then you are entitled to direct notice of a Florida probate proceeding.  The Florida Supreme Court, in Jones v. Golden, resolved any confusion over when a creditor claim needs to be filed for a known or reasonably ascertainable creditor:

Creditors who are known or reasonably ascertainable need not rely on publication for notice of the pending administration of an estate. Section 733.2121(3)(a) requires a personal representative to “promptly serve a copy of the notice” on those creditors who are known or reasonably ascertainable after a diligent search. The limitations period applicable to known or reasonably ascertainable creditors does not begin to run until service is perfected. Once served with a copy of the notice, a known or reasonably ascertainable creditor must file any claim within the later of “3 months after the time of the first publication of the notice to creditors or . . . 30 days after the date of service on the creditor . . . .” § 733.702(1), Fla. Stat.

Under the plain language of section 733.702(1), where a known or reasonably ascertainable creditor is never served with a copy of the notice to creditors, the applicable limitations period never begins to run and cannot bar that creditor’s claim. “[A]s to any creditor required to be served with a copy of the notice to creditors,” the [**15]  limitations period can only be triggered by “service on the creditor” of the required notice. § 733.702(1), Fla. Stat. A known or reasonably ascertainable creditor is absolved from the limitations of section 733.702(1) by virtue of the fact that the personal representative failed to serve the creditor with the required notice. The  [*248]  only instance in which a known or reasonably ascertainable creditor is required to file any claims before the expiration of the three-month window after publication of the notice is where the last day of the three-month window occurs more than thirty days after service of the required notice.

Accordingly, if a known or reasonably ascertainable creditor is not served with a copy of the notice, section 733.702(1) does not govern the timeliness of that creditor’s claims. Instead, the claims of such a creditor are only barred if not filed within the two-year period of repose set forth in section 733.710. Thus, the claim of a known or reasonably ascertainable creditor who was never served with a copy of the notice to creditors is timely if filed within two years of the decedent’s death. Further, because the limitations periods in section 733.702 are inapplicable under such circumstances, it is not necessary for the creditor to seek an extension of time [**16]  under section 733.702(3) since that section applies only to claims that are untimely under section 733.702.

Creditor Claim Deadline For Unknown Creditors – 3 Months After First Publication

If you are not a known or reasonably ascertainable creditor, then you get notice by publication in a local newspaper.

The limitations period applicable to unknown creditors, set forth in section 733.702(1), begins to run upon publication of the notice to creditors and ends three months after the date of the first publication.

You can find out more about the Jones v. Golden case here.

 

Surviving Spouses, Ex-Spouses, and Creditor Claims In Florida Probate

Creditor claims and divorce often intersect, and an ex-spouse and a surviving spouse may have to file a creditor claim to enforce their rights.

Ex-Spouses Must File a Creditor Claim To Pursue Marital Agreement Rights

A premarital or postnuptial agreement can be enforced after a prior spouse’s death, but the prior spouse must file a creditor claim to enforce this contract right.  See Spohr v. Berryman, 589 So. 2d 225 (Fla. 1991).

A Spouse in The Middle Of A Divorce Does Not Have to File a Creditor Claim, But Probably Should

In Passamondi v. Passamondi, (2nd DCA 2014), Mr. and Mrs. Passamondi filed for divorce.  Mr. Passamondi requested that the divorce proceedings be bifurcated, because Mr. Passamondi was suffering from a terminal illness and presumably wanted a final judgment of divorce entered sooner rather than later, even if it meant other issues such as distribution of property would determined after entry of the judgment of divorce.

A final judgment of divorce was entered on May 24, 2006.  The final judgment “reserved jurisdiction over this cause and each of the parties to enter such further Orders, Judgments, and Decrees as may be necessary at any time in the future to resolve all equitable distribution issues and any other issues which have been pled.”

Mr. Passamondi died in July 2006.  The former wife filed a creditor claim in Mr. Passomondi’s Florida probate estate.  The basis for the former wife’s claim was an “undetermined marital interest in all of the real, personal and intangible property of decedent preceding his death as so determined in” the pending dissolution of marriage proceeding.

The former wife also filed a supplemental petition for relief in the dissolution of marriage proceeding against Mr. Passamondi’s estate and his three children.

Four years passed.  A final hearing was set in the dissolution proceeding for October 2011.  In the meantime, the probate proceedings were terminated in May 2011.

When the parties appeared for final hearing in the dissolution proceeding, the court declined to hear and determine the remaining issues, ruling that Mr. Passamondi’s death and opening of Mr. Passamondi’s estate vested the probate court with “exclusive jurisdiction to determine the proper manner of distribution of the Former Husband’s assets after payment of all creditors of the Estate of which the Former Wife was one…”  The trial court dismissed the former’s wife’s claims.

The Florida appellate court reversed the ruling of the trial court, stating:

If a trial court bifurcates a proceeding for dissolution of marriage by entering a judgment dissolving the marriage but retaining jurisdiction to determine property issues, the subsequent death of a party does not deprive the trial court of jurisdiction to determine the issues reserved.

Although filing a creditor claim was ultimately not necessary in this case, it is prudent to file a creditor claim to make sure your client’s rights are protected.

A Surviving Spouse With Community Property Rights Must File A Timely Claim

A surviving spouse who has community property rights must file a claim in the deceased spouse’s estate to enforce community property rights.  We have written about this requirement under Florida law here.

 

Child Support And Creditor Claims In Florida

A child support arrearage can be pursued with a creditor claim in Florida probate by the parent owed the support, or by an emancipated child if the parent is unable or unwilling to pursue.

In Davis v. Hengan, a father died owing child support arrearages.  The father died intestate, and was survived by his daughter, his daughter’s mother, and his current wife.  The daughter and current wife were appointed co-personal representatives of the father’s Florida estate.

The mother, as a creditor of the father’s estate, filed a statement of claim in the father’s Florida estate for child support arrearages.  An objection was made to the mother’s claim, and the mother filed an independent action against the co-personal representatives of the estate for the child support arrearages.

The daughter (a co-personal representative), also filed a statement of claim against the estate for child support arrearages.  The current wife (the other co-personal representative) objected to the daughter’s claim.  Like the mother, the daughter filed an independent action on her claim, and then moved to consolidate her independent action with her mother’s independent action.

The father’s current wife, as co-personal representative, moved to dismiss the daughter’s independent action.  The current wife argued that the daughter lacked standing to pursue child support arrearages because the right to pursue the arrearages vested solely in the daughter’s mother.  The Florida trial court granted the current wife’s motion to dismiss.  The daughter appealed.

In a short opinion, the Florida appellate court affirmed the dismissal of the daughter’s independent action, stating:

Parents have a legal duty to support their children.” Dep’t of Revenue v. Jackson, 846 So. 2d 486, 492 (Fla. 2003); see § 61.09, Fla. Stat. (2015). “An obligation to pay accrued support is not extinguished even when the child reaches majority, notwithstanding that the parent’s obligation to support normally ends when a child reaches eighteen.” Kranz, 661 So. 2d at 878 (citation omitted). We have held that a child has standing to enforce rights that ripen after the child reaches the age of majority. Brown v. Brown, 484 So. 2d 1282 (Fla. 4th DCA 1986). But we have never held, nor has any other court held, that the rights that accrue during the age of minority can be enforced by anyone other than the child’s legal representative.

The Florida appellate court noted that the opinion should not be read to prevent a child who has been emancipated from pursuing child support arrearages if the parent is unable or unwilling to pursue the arrearages.

Can A Creditor Claim Be Filed Before The Appointment Of A Personal Representative?

Yes, and it will relate back.

In the case of Richard v Richard, (3rd DCA 2016), the court was faced with the issue of a potentially late-filed creditor claim in the Florida probate.  The notice to creditors was published one day prior to the order appointing the two personal representatives.  The trial court held that the notice to creditors was not validly published, which had the effect of making the creditor claim not late (because the three month claim period, otherwise triggered by the publication of the notice to creditors, had not yet started to run).

In reversing, the appellate court relied on the “relation back” doctrine, as well as specific statutory authority to ratify acts taken prior to the appointment of a personal representative.

As explained by the court:

The roots of the “relation back” doctrine run deep in Florida law. In 1954, the Florida Supreme Court referred to it as an “ancient doctrine” when considering whether or not a trial court erred in dismissing a wrongful death claim brought by a father on behalf of his deceased son’s estate prior to his appointment as personal representative of the estate. Griffin v. Workman, 73 So. 2d 844, 846 (Fla. 1954). The Court further noted the doctrine, which provides that “whenever letters of administration or testamentary are granted they relate back to the intestate’s or testator’s death,” had “been accepted with virtual unanimity, since it was promulgated, in a long line of cases” throughout the country.

The court also looked to a Florida Statute, which provides as follows (Section 733.601):

The duties and powers of a personal representative commence upon appointment. The powers of a personal representative relate back in time to give acts by the person appointed, occurring before appointment and beneficial to the estate, the same effect as those occurring after appointment. A personal representative may ratify and accept acts on behalf of the estate done by others when the acts would have been proper for a personal representative.

In summarizing its holding, the court explained:

We hold that the relation back doctrine, codified in section 733.601, applies to the personal representative’s act of publishing the notice to the creditors, and that the order appointing personal representative relates back and validates the pre-appointment act of publication of the notice to creditors.

Creditor claim deadlines in Florida probate can be quick, and a trap for the unwary.  Figure out if you need to file a creditor claim, and file your claim as soon as possible.

Objections To Florida Creditor Claims

Just because a creditor claim has been filed does not mean that the claim is automatically deemed valid and paid.  Creditor claims can be objected to.

Who Can Object to a Florida Creditor claim?

The personal representative of the estate or other interested person may file an objection to a creditor claim.

An “interested person” is defined in section 731.201(23) as any person who may reasonably be expected to be affected by the outcome of the particular proceeding involved.  In the context of a creditor claim, this would include the beneficiaries and other creditors.

What is the deadline to file an objection to a creditor claim?

The deadline to file an objection to a creditor claim is the later of:

  • On or before the expiration of 4 months from the first publication of notice to creditors or;
  • Within 30 days from the timely filing or amendment of a claim.

What Happens If An Objection To A Creditor Claim is Filed?

Once an objection to a creditor is filed, the claimant (the person who filed the creditor claim) has two options.

File An Independent Action

If the claimant wants to pursue their creditor claim, the claimant must file an independent action.  Pursuant to section 733.705, a claimant has 30 days from the service of the objection to the claim to file the independent action.  The independent action is a separate lawsuit, and cannot be filed in the probate estate.

No Longer Pursue the Creditor Claim

The other option for the claimant is to let go of the creditor claim.  If 30 days passes without the filing of an independent action, then the creditor claim will not be paid, and will effectively be abandoned.

 

Complete Guide to Florida Probate

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