What Is Asset Abatement in North Palm Beach?

Many people in North Palm Beach pass away with unresolved debt. If this sounds familiar, you might need to familiarize yourself with a process called “asset abatement.” This applies to those making their estate plans, and it also applies to beneficiaries and executors dealing with estates with unresolved debt. How exactly does this process work? Can a North Palm Beach probate lawyer help with asset abatement?

Abatement Is the Order of the Asset Sale 

When a person passes away with unresolved debt, the personal representative (also known as the “executor”) needs to use the remaining assets to pay off this debt. But what happens if the decedent has real estate, cash, investments, vehicles, and fine art? Which asset does the personal representative liquidate first?

Florida law specifies the order of the asset sale in this situation, and this process is called “asset abatement.” In this situation, the type of asset is irrelevant. Instead, Florida probate courts consider the following:

Did the Individual Die Intestate? 

When someone passes away without a Will, that individual is said to have “died intestate.” With no Will to go by, the probate court follows a system called “intestate succession.” While the specifics of this system can become extremely complex, the decedent’s spouse and children generally receive the estate (assuming they exist). These are the first assets that the executor will use to pay debts.

What if the Decedent Left a Will? 

If the decedent left a Will, the personal representative will first use assets associated with “residual clauses.” For example, the decedent might include a statement like “I leave the rest of my assets to my children.”

Next, the personal representative will turn to any assets “not specifically or demonstratively devised.” For example, the Will might include a statement such as: “I leave $50,000 to my uncle” without specifying where this $50,000 should come from. Finally, the personal representative will use specifically or demonstratively devised assets to pay off unresolved debt. An example is a statement like “I leave my primary residence to my grandson.”

You Can Specify How You’d Like Your Debts to Be Paid 

Note that these rules only apply if you don’t leave behind any specific instructions about your unresolved debt. A common strategy is to establish a separate bank account, which will serve as a reserve from which to pay off your debts. Not only will this make your personal representative’s job easier, but it may prevent the sale of more sentimental or important assets.

Can a Probate Lawyer in North Palm Beach Help With Asset Abatement? 

A probate lawyer in North Palm Beach may be able to help with the asset abatement process. Although resolving debts during probate can be challenging, a legal professional can make it as seamless as possible. To learn more about the next potential steps, feel free to schedule a consultation with Kitroser Lewis & Mighdoll at your earliest convenience.

Sources: 

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0733/Sections/0733.805.html

help.flcourts.gov/Other-Resources/Probate