Notifying creditors of the estate is one of the most important duties of Florida personal representatives. Since resolution of creditors’ claims is one of the fundamental purposes of probate, it is no surprise that Florida personal representatives are required to do what they can to notify creditors that the estate has been opened for probate.
Florida Statutes Section 733.2121 requires the personal representative to “promptly publish a notice to creditors.” The statute further requires Florida personal representatives to do their best to locate any known creditors of the estate:
The personal representative shall promptly make a diligent search to determine the names and addresses of creditors of the decedent who are reasonably ascertainable, even if the claims are unmatured, contingent, or unliquidated, and shall promptly serve a copy of the notice on those creditors.
But what if the Florida personal representative is also a creditor of the estate? This could happen, for example, if the personal representative is a family member that lent the decedent money prior to his or her death. In this case, the person serving as personal representative would be wearing two hats: one of a personal representative and one of a creditor of the estate.
As you can image, conflict of interest issues can arise in this situation. Since the personal representative has a claim against the estate and is responsible for paying claims against the estate, the personal representative could be open to an accusation of self-dealing for paying his or her claim from estate assets.
Thankfully, there are a few procedures in place to protect both the personal representative and the Florida probate estate. If the personal representative is filing against the estate in his or her individual capacity, the personal representative must notify all interested parties of the claim and give them an opportunity to object to the payment.
Florida Probate Rule 5.12(a) provides that, when a personal representative is enforcing his or her own claim against the estate, the court may appoint an administrator ad litem for the estate. An administrator ad litem would serve as personal representative for the particular purpose of making sure that the estate’s interest is protected. This introduces a neutral third party into the proceeding to ensure that the estate and the personal representative are protected.
Although the appointment of an administrator ad litem is not a strict legal requirement, it is good practice (and Florida probate courts typically require it) if the personal representative has a claim against the estate. Florida probate attorneys and personal representatives should utilize this procedure if the personal representative files a claim, especially if there are other interested parties who do not consent to payment of the claim.