Detailed Answer
When someone acts as a personal representative (executor) in a Florida probate, accurately recording third‑party claims and payments protects the estate, prevents duplicate payments, and reduces later disputes. The core tasks are: identify claims, verify them, record them in the estate accounting, notify interested persons, obtain court approval when required, and preserve supporting documentation.
Step‑by‑step actions a personal representative should take
- Identify all third‑party claims and payors. Ask banks, insurers, medical providers, mortgage companies, and known vendors whether they have outstanding claims. Check decedent records, mail, and email for invoices, contracts, or notices.
- Require written claims and documentation. Ask each claimant to submit a signed, written claim with the invoice, the contractual basis for the debt, and proof of any third‑party payment (receipts, remittance advices, or explanation of benefits).
- Verify amounts and priority. Confirm which claims are legitimate and whether any third party has subrogation or lien rights (for example, a health insurer that paid medical bills may have a subrogation interest). Verify whether a creditor has a perfected lien (mortgage, mechanics’ lien) that affects priority.
- Record payments and credits in the estate accounting. Maintain a dedicated estate ledger or accounting software entry for each claim: show the original claim amount, payments made by third parties, payments made by the estate, and any balance. When a third party pays a claim, record the payment as a credit against the creditor’s claim and as estate income (or receipt) if appropriate.
- File required court records and inventories. Under Florida probate practice, a personal representative must prepare and file inventories and accountings with the court that detail estate assets, liabilities, and distributions. Include summaries of third‑party payments and attach supporting documentation to your accounting records so the court and interested persons can verify them. (See Florida Statutes, Chapter 733: Administration of Estates: florida statutes ch. 733.)
- Serve notice to creditors and interested persons when required. Follow the court’s notice procedures for creditors and known interested parties so claimants have the opportunity to assert or contest claims. Keep proof of service for each notice.
- Get releases or negotiated settlements in writing. When a third party pays a claim (for example, an insurer pays a hospital), obtain a written release or settlement that confirms satisfaction of the estate’s liability. Keep releases in the estate file and reference them in accountings.
- Seek court approval for disputed or large transactions. If a creditor disputes the amount or if a proposed payment/distribution is significant, petition the probate court for instructions or approval. Court approval protects the personal representative from later claims for mismanagement.
- Close out accounts and reconcile bank records. Reconcile estate bank accounts to the accounting entries, showing deposits from third‑party payments and disbursements to creditors. Retain bank statements and reconciliations as evidence.
- Include clear explanations in the final accounting and obtain discharge. When you file the final account, explain third‑party payments, attach receipts and releases, and request the court’s discharge. That step helps cut off future personal liability for the personal representative.
Practical checklist to apply these steps
- Create an indexed paper or electronic file for every creditor and payor.
- Track each claim with: claimant name, date, original amount, payments (date and amount), documents attached, and balance.
- Always obtain written confirmation when a third party pays a claim on behalf of the estate.
- Keep originals or certified copies of releases and lien satisfactions.
- Mark distributions in the court accounting as “paid” only when supported by cleared checks or bank transfers and receipts.
Hypothetical example (illustrative)
Suppose a hospital submits a $12,000 medical claim against the decedent’s estate. The decedent’s health insurer pays $8,000 directly to the hospital and notifies the personal representative. The personal representative should: (1) obtain the insurer’s payment remittance and the hospital’s invoice showing the $12,000 charge and $8,000 payment; (2) record the hospital claim in the estate ledger showing a $12,000 claim, $8,000 third‑party payment, and $4,000 balance; (3) obtain a hospital receipt or lien release for the $8,000 payment or confirmation that the $4,000 balance remains owing; (4) if the personal representative pays the $4,000, record the payment with the cleared check and include both the insurer remittance and hospital release in the accounting filed with the court.
Statutory and procedural guidance
Florida’s probate statutes govern administration, inventories, and accountings for estates. See the Florida Statutes, Chapter 733 (Administration of Estates) for statutory duties of a personal representative and requirements that guide inventories and accountings: Florida Statutes ch. 733. Local probate court rules and the Florida Probate Rules (available from the Florida Courts or local clerk of the court) add procedural detail on filings, notices, and hearings.
When to get legal help
If claims involve subrogation, liens, conflicting payors, or disputed balances, consult a probate attorney before making payments. Court approval can be essential if a claim risks personal liability for the personal representative. An attorney can prepare petitions, draft releases, and help ensure compliance with Florida statutes and local court rules.
Helpful Hints
- Keep a single, organized accounting ledger for the estate and update it as soon as you receive invoices or payments.
- Scan and back up all receipts, releases, and correspondence to avoid lost evidence.
- Use clear labels in accountings: “Third‑party payment – insurer remittance” rather than vague notes.
- When in doubt, ask the court for instructions or seek counsel before distributing estate funds.
- Maintain proof of mailing and service for notices; courts treat documented notice very seriously.
- Before final distribution, reconcile every creditor file to ensure no outstanding balances remain hidden.
Disclaimer: This article explains general steps under Florida probate practice but is not legal advice. It does not create an attorney‑client relationship. For advice applying law to specific facts, consult a licensed Florida probate attorney.