Estate Administration Explained

This is the court process of using a decedent’s Will to appoint a personal representative (i.e., “executor”) to settle the estate’s tax and other financial obligations, and ultimately transfer the decedent’s estate assets to the beneficiaries. The estate assets consist of the decedent’s property that was owned solely in their name, without a surviving joint owner, surviving directly designated beneficiary (such as a beneficiary listed on a life insurance policy), or titling in a trust. The probate process is generally and primarily (though not exclusively) governed by Sections 732, 733, 734, and/or 735 of the Florida Statutes. Chapter 733 in particular is known as “The Florida Probate Code.”

This process is contemplated by Section 736 of the Florida Statutes, said section being known as “The Florida Trust Code.” Most typically, initial trust administration entails the installment of a successor trustee who endeavors to settle the decedent’s tax and other financial obligations, and ultimately to transfer to the trust beneficiaries (or otherwise manage on the trust beneficiaries’ behalf) any assets that were either (i) effectively titled in a trust while the decedent was alive, or (ii) were transferred to the decedent’s trust post-death via a probate process or via direct arrangements such as transfer-on-death accounts or Ladybird Deeds for real estate.

it is not unusual for a decedent to have one or more financial accounts that are controlled by a beneficiary form on file with the relevant financial institution. These forms are completed and submitted during the owner’s lifetime. When processed correctly, such beneficiary forms serve as a contract between the decedent and the financial institution. Upon receiving proof of death of the owner (usually by way of a death certificate), the financial institution agrees to transfer the asset to the beneficiaries per the designations on the beneficiary form. Similar in concept, real estate effectively controlled by a Ladybird Deed transfers promptly upon the owner’s death, provided that certain documents are prepared and recorded in the public records. Often-used monikers for beneficiary forms tied to financial accounts include:

• Transfer on Death (TOD) – usually this applies to stocks, mutual funds, and other funds that may be transferred in kind.

• Pay on Death (POD) – usually this applies to banks accounts that pay out in cash.

• In Trust For (ITF) – not to be confused with assets owned by or payable to an actual trust, the “ITF” designation is functionally the same as “POD” and has been retained by some financial institutions as a term for paying out bank accounts in cash.

• Beneficiary – for IRAs, 401ks, annuities, and life insurance policies, it may be simply said that the owner has “a beneficiary” designation on file.