Florida Probate Statute 733.809: Right of Retainer

Because of the close relationship that beneficiaries typically have with decedents, it is not usual for a beneficiary to be indebted to the decedent. Since debts owed to an individual do not go away simply because of the death of the individual, in Florida the personal representative has an obligation to collect all debts owed to the estate, including debts owed by beneficiaries. To learn more about the estate debt collection process, including the requirements of Florida Statutes, section 733.809- Right of retainer, contact a skilled Fort Lauderdale estate administration attorney at the Law Offices of Stephen Bilkis & Associates. We have over 20 years of experience representing clients in complex probate matters, including matters related to problems related to asset distribution. We can help.

If someone owes debt to a decedent, typically it does not go away simply because the person who loaned the money dies. However, the lender can choose to forgive the debt if it remains unpaid at his or her death, by adding language in his will forgiving the debt. Otherwise, if the debt remains unpaid at the time of the death of the lender, the debtor would still owe the money and the personal representative would be obligated to attempt to collect it on behalf of the decedent’s estate.

If the debt is owed by a beneficiary and failure of the decedent to forgive the debt could result in the beneficiary being required to pay back the debt after the testator's death. If the beneficiary fails to repay the loan, the personal representative may apply the unpaid amount to reduce any distribution the beneficiary would otherwise receive from the estate. Under FL. Stat, section 733.809- Right of retainer, the amount of an indebtedness due from a beneficiary to the estate may be offset against that beneficiary’s interest. However, that beneficiary shall have the benefit of any defense that would be available in a direct proceeding for recovery of the debt. That means that the beneficiary could dispute the debt with evidence that, for example, it was forgiven or that it was repaid. If you are a beneficiary and are concerned about how a debt owed to a decedent, discuss your concerns with an experienced Fort Lauderdale estate administration lawyer.

Unpaid loans owed to the decedent can cause issues or complications in the administration of an estate beyond simply resulting in the beneficiary who is a debtor having his (or her) distribution reduced. The debt can result in disputes among beneficiaries. For example, siblings who would normally each expect to receive equal distributions from a deceased parent may be resentful of a sibling who failed to repay a significant loan. These bad feelings may spill over into outright litigation.

As a skilled estate administration lawyer in Fort Lauderdale will explain, the best way to avoid disputes related to beneficiary-debtors is for lenders to clarify with the debtor how the loan is to be treated. If the lender expects for the debt to be paid, then he should include language in his will indicating that. If the lender intends for the debt to be forgiven upon his death, he should put language in his will that makes that intention clear. If the lender wants the distribution to the debtor to be reduced by the balance owed on the debt, he should indicate that in his will. In others, whatever his intentions are, the lender should make them clear in his (or her) will.

1. Delivery of devises and distributive shares: § 733.801, Fla. Stat.
2. Distribution in kind; valuation: § 733.810, Fla. Stat.
3. Distribution; right or title of distributee: § 733.811, Fla. Stat.

The amount of a noncontingent indebtedness due from a beneficiary to the estate or its present value, if not due, may be offset against that beneficiary’s interest. However, that beneficiary shall have the benefit of any defense that would be available in a direct proceeding for recovery of the debt.

As with every aspect of estate administration, distribution of assets from the estate of a decedent can sometimes be complicated. One complication is where a beneficiary also owes a debt to the estate. Florida probate law provides guidance as to how the personal representative must handle such situations. Whether you are a personal representative, beneficiary, heir, or other party, if you have concerns about asset distribution, including questions about the requirements of Florida Probate Code, section 733.809- Right of retainer, it is important that you discuss your concerns with an experienced estate administration attorney serving Fort Lauderdale. The attorneys at the Law Offices of Stephen Bilkis & Associates have years of experience working closely with personal representatives and other interested parties in all aspects of estate administration including complex asset distribution. We can help. Contact us attorneys at 561-710-4000 to schedule a free, no obligation consultation regarding your case.