MUST READ:

Letters of Administration (LOA’s) are court orders.

• They are issued as PART of a FORMAL ADMINISTRATION of the estate (Probate)
  
• The court clerk will not simply give you an LOA.
  
• The only way to receive LOA’s is to start formal administration.
• The court will issue the LOA’s after a completely probate pleadings/petitions package is submitted by your attorney.
  

Now that you’re clear on what LOA’s are…

Way back in April of 2009, I wrote about the common mistake that banks make when they think they need Letters of Administration to release funds.

This hasn’t changed but I think it’s time I split some hairs to help folks understand when LOA’s are really necessary and when they aren’t.

Let’s approach this on a case by case basis:

1.  Do you need to know how much money is in the account?

If you answered YES, you won’t get that answer from the bank unless you provide LOA’s.   The bank can stay tight lipped until you present them with LOA’s showing that they have the authority to discuss the account with you.  Sometimes, you can sweet talk a bank rep into releasing a bit of information to you, but they are well within their rights (and corporate policies) to clam up if you don’t have LOA’s

2.  Do you need access to a Safe Deposit Box?

LOA’s can give you access to a Safe Deposit Box but you could also simply file a petition the court for an order to open the safe deposit box.  The problem with a simple order to open the box is that you won’t be able to remove any contents from the box and take them with you.  You would only be allowed to take an inventory of the box.  So if you find a bunch of cash in the box, you must leave the money in there until you actually have a court order distributing the cash to the intended heirs.

3.  Do you just want the account liquidated directly to the heirs?

If you answered YES, then you don’t need LOA’s.  An Order from a summary administration of the estate will suffice.  Note that summary administration IS a form of probate administration, albeit much less expensive, quicker and a more deliberate process.

4.  What if the bank is actually a brokeragefirm holding investment positions such as stocks, mutual funds, etc.?

This is a bit tricky.  Let’s say the decedent had a brokerage account at a fictitious firm we’ll call Morgan Schwabb.  The account holds several stock investments which have not been liquidated.  In this case, securing LOA’s are the way to go because you need the authority under the LOA’s to order the closing of those stock positions.  In other words, if you want to sell all of the decedent’s stock in GOOGLE, you must be the authorized personal representative with LOA’s in order to make that call.

Still unsure if you need Letters of Administration?  Fill out my contact form and we’ll chat about it!

While Florida probate administration may have many parallels to administration in other states, there are certainly some unique requirements and customs that are unique to Florida. For example, many states have a proceeding refererred to as “small estate administration” while Florida’s rough equivalent is called “summary administration.” In some states, small estate administration is often confused with small estate affidavits (which are legally distinct from actual administration.)

In order to determine if an estate is eligible for small estate administration or a simple small estate affidavit depends on the type of assets and whether or not they exceed a specified threshhold value. Florida’s summary administration generally requires that either non-exempt assets do not exceed $75,000 or that more than 2 years have passed since date of death. Furthermore, attorney involvement is almost always required. To be clear, Florida does not have a procedure called “small estate administration.”

One of the most frequent questions I field goes something like this:

“The bank needs Letters of Administration or Letters Testamentary in order to release the money. How do I get these Letters?”

The short answer is “formal administration,” a process that takes a minimum of 6 months and averages 9-12 months.

My knee jerk reaction to this question is always: “Are you sure you need Letters of Administration?”

Very often, Letters of Administration (often referred to as Letters Testamentary in other states) are wholly unnecessary – and because you can only secure such Letters in formal administration (a longer, costlier process), you may be subjecting yourself to a process which we jokingly refer to as “probate overkill.”

Banks have manuals, policies and guidelines that can make accessing funds of the deceased rather difficult. While this may seem like an unnecessary imposition, it’s understandable that the bank is trying to shield iteself from any liabilities.

My point is, bank employees don’t always know what they need. Letters of Administration may be necessary, but in smaller estates (>75,000), formal administration can be “probate overkill.” I don’t blame them – they aren’t exepected to understand probate law.

They are simply referencing what the policy manuals and customer service wikis (a computer database that helps employees find answers to common questions) tell them to say whenever a customer says:

“Mom died and I need to access her checking account so I can pay for her funeral.”

All the bank tell heard was “mom died.” (followed by a suppressed panic attack)

In an instant, a manual or database is accessed to determine how to deal with bank accounts when the owner has died. The manual probably says “persistently ask for Letters of Administration or a court order until the heirs stop bugging you.” Humorous and annoying at the same time, the reality is that bankers, bank tellers, financial brokerage and life insurance representatives do not understand probate, much less Florida probate!

Bottom line: Letters of Administration are only issued in Florida’s formal administration process (formal probate) and in many cases, summary administration orders are sufficient to distribute bank funds. Let your attorney make this determination before you jump to any conclusions on the kind of court documents that you need.