The bank needs “Letters of Administration” – Are you sure?

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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.