What Happens to Debts and Taxes in Florida Probate

In Florida probate, a deceased person’s debts and taxes are paid out of the estate before any property passes to heirs. The personal representative gives notice to creditors, who generally have a limited window to file claims, and then pays valid claims in a statutory order of priority set by Florida law. Heirs do not personally inherit a decedent’s debts, and Florida has no state estate or inheritance tax, though federal estate tax and the decedent’s final income tax can still apply.

That short answer hides a lot of moving parts, and the parts trip people up most often when there is no will. When someone dies intestate in Miami-Dade County, the family is usually surprised to learn that the first job of the estate is not to distribute Grandma’s house — it is to settle accounts with banks, credit card companies, hospitals, and the IRS. Below is how that actually works, and where heirs of an intestate estate need to pay attention.

Debts come before inheritances in Florida probate

Probate exists, in large part, to give creditors an orderly chance to be paid and to give heirs clean title afterward. The estate is a temporary legal entity. The personal representative (Florida’s term for what other states call an executor or administrator) collects the assets, pays what is owed, and distributes whatever is left.

When a person dies without a will, the court appoints an administrator under Florida’s intestacy rules, and that administrator carries the same creditor-handling duties as any other personal representative. The absence of a will changes who inherits — it does not change the obligation to pay legitimate debts first. Florida’s intestate succession statute only governs what happens to the remainder after debts and expenses are settled.

Heirs are not personally liable for the decedent’s debts

This is the single most important reassurance I give families. Your father’s credit card balance does not become your debt because you are his son. The debt is paid only from estate assets. If the estate runs out of money before every creditor is paid, the unpaid creditors are generally out of luck — they cannot pursue the heirs personally for the shortfall.

There are narrow exceptions. If you co-signed a loan, you remain liable as a co-signer. If you held a joint credit card as a true joint account holder, that is your contract too. And property that secures a debt — most commonly a house with a mortgage — carries that lien with it. The mortgage does not vanish at death; whoever takes the home generally takes it subject to the loan.

The creditor claim process and the 3-month window

Florida runs creditor claims on a clock, and the clock is the single biggest reason not to “wait and see” after a death. The personal representative is required to publish a Notice to Creditors in a local newspaper and to serve known or reasonably ascertainable creditors directly.

Under Florida Statutes Chapter 733, a creditor who is served with notice generally must file a claim within 30 days of being served, and the broader public window runs three months from the first publication of the notice. Claims filed after the deadline are barred, with limited exceptions. This is why diligent, early publication actually protects the estate — it starts the clock that eventually closes the door.

There is also an absolute outer limit. Florida Statute 733.710 bars most claims filed more than two years after the date of death, regardless of whether notice was ever published. That two-year statute of repose is a backstop, but no responsible administrator relies on it — proper notice is the correct path.

How a personal representative handles a filed claim

When a claim is filed, the personal representative has choices:

• Pay it — if the claim is valid and the estate is solvent.
• Object to it — by filing a written objection, which forces the creditor to file an independent lawsuit within 30 days or lose the claim.
• Negotiate it — many medical and credit card claims settle for less than face value.

In intestate estates, this step deserves extra care. Without a will naming a trusted executor, the administrator is often a family member with no probate experience, and a missed objection deadline can mean paying a claim that should have been challenged. This is where having counsel earns its keep.

Order of payment when the estate cannot pay everyone

Not every estate has enough to satisfy every debt. When an estate is insolvent, the personal representative cannot simply pay whoever calls first. Florida Statute 733.707 sets a mandatory order of priority. Paying a lower-priority creditor ahead of a higher one can make the personal representative personally liable.

The statutory classes, in simplified order, are:

1. Class 1 — Costs and expenses of administration, including reasonable attorney’s and personal representative’s fees.
2. Class 2 — Reasonable funeral and burial expenses, up to a statutory cap.
3. Class 3 — Debts and taxes with a federal preference, such as certain federal tax obligations.
4. Class 4 — Reasonable and necessary medical and hospital expenses of the last 60 days of the final illness.
5. Class 5 — Family allowance.
6. Class 6 — Arrearages from court-ordered child support.
7. Class 7 — Debts acquired after death for continuing the decedent’s business, within limits.
8. Class 8 — All other claims, including ordinary credit card debt.

Notice where everyday consumer debt lands: dead last. Funeral costs, administration expenses, and last-illness medical bills all get paid before the credit card companies. For families worried about a parent’s revolving balances, that ordering is often a relief.

The homestead protection most heirs don’t know about

Florida’s constitutional homestead protection is a powerful shield. A decedent’s protected homestead generally passes to heirs free of the claims of most creditors. In plain terms, the family home often cannot be forced into sale to pay ordinary debts, and it usually passes outside the reach of the general creditor pool entirely.

The rules are technical — homestead status depends on residency, acreage, and who qualifies as an heir under the constitution — and they interact in surprising ways with intestate succession when a surviving spouse and descendants are involved. If a home is the main asset, get the homestead analysis right before anyone signs anything.

Taxes in a Florida estate: what actually applies

Clients often brace for a “death tax.” For most Florida estates, the news is good.

No Florida estate or inheritance tax

Florida does not impose a state estate tax or an inheritance tax. The state estate tax was tied to a federal credit that was phased out years ago, so Florida no longer collects it. Heirs in Miami receiving an inheritance owe no state tax simply for inheriting.

Federal estate tax — only for large estates

Federal estate tax applies only to estates that exceed the federal exemption, which is in the multi-million-dollar range and indexed for inflation. The vast majority of estates fall well under the threshold and file no federal estate tax return at all. When an estate is large enough to be exposed, planning matters enormously — and the same dynamics drive sophisticated probate practice in higher-tax jurisdictions. Our colleagues handling deal with both federal exposure and a separate New York state estate tax, a contrast that shows just how favorable Florida’s tax landscape is by comparison.

The decedent’s final income tax return

This is the tax obligation people forget. The decedent still owes income tax for the year of death, and a final Form 1040 must be filed. If the estate itself earns income during administration — interest, rent, dividends on assets still held — the estate may need its own taxpayer ID and a fiduciary income tax return (Form 1041). The personal representative is responsible for these filings, and unpaid federal taxes carry that federal-preference priority in the payment order discussed above.

Property and capital gains considerations

Inherited assets generally receive a “stepped-up” cost basis to fair market value as of the date of death. For heirs who later sell, that step-up can dramatically reduce or eliminate capital gains tax — one of the quiet advantages of inheriting appreciated property rather than receiving it as a lifetime gift. It is worth a conversation with a tax advisor before selling inherited real estate or securities.

How the no-will scenario changes the debt-and-tax picture

Everything above applies to estates with and without a will. What changes with intestacy is the human layer.

• The administrator is chosen by statute and court, not by the decedent. Florida law prioritizes the surviving spouse, then heirs, when appointing an administrator — and disagreements among heirs about who serves can delay the very creditor notice that protects the estate.
• No instructions exist for handling specific debts. A will might have directed which assets to sell to pay debts. Without one, the administrator follows default abatement rules under Florida law, which can frustrate heirs expecting a particular asset.
• Family conflict raises the cost of administration. Because Class 1 administration expenses are paid first, drawn-out disputes literally reduce what is left for everyone.

The form of probate also affects how debts are managed. Florida offers summary administration for smaller or older estates and formal administration for larger ones, each with different creditor procedures. The distinctions parallel what you see in other states — our New York team explains the analogous choices in their guide to , and the same strategic logic applies when selecting the right Florida proceeding.

Practical steps for an intestate estate in Miami

1. Do not pay any debts personally before probate opens. Voluntarily paying a creditor out of order, or out of your own pocket, can create problems you cannot undo.
2. Secure assets and gather records — bank statements, mortgage documents, tax returns, and a list of known creditors.
3. Open the estate promptly so the personal representative can publish the Notice to Creditors and start the three-month clock.
4. Evaluate each claim before paying — object to anything questionable within the deadline.
5. Confirm homestead status on any real property before assuming it is available to creditors.
6. File the decedent’s final returns and, if needed, the estate’s fiduciary return.

For families weighing whether they even need full probate, or which Florida proceeding fits, our Florida office walks through the options in detail on our . And if the estate has no will, understanding how a will would have changed the outcome often clarifies what to prioritize now.

The bottom line

Debts and taxes are the gatekeepers of a Florida estate. They get paid first, in a specific statutory order, from estate assets — not from the heirs’ own wallets. Florida’s lack of a state death tax and its strong homestead protection make it one of the friendlier states in which to inherit, even when there is no will. The risk in an intestate estate is rarely the tax bill; it is procedural missteps — missed creditor deadlines, claims paid out of order, or homestead rights overlooked. Handle the sequence correctly and the family keeps far more of what the decedent left behind.

If you are administering a loved one’s estate in Miami-Dade County and are unsure how to handle creditors or final taxes, speak with a Florida probate attorney before you write a single check.

Frequently Asked Questions

Do heirs have to pay the deceased person's debts in Florida?

No. Heirs are not personally responsible for a decedent’s debts. Debts are paid only from the estate’s assets through probate. If the estate lacks enough money to pay everyone, unpaid creditors generally cannot pursue the heirs personally. Exceptions exist for co-signed loans, true joint accounts, and secured debts like a mortgage that stays attached to the property.

How long do creditors have to file a claim in Florida probate?

A creditor served with formal notice generally must file within 30 days of service, and the broader public window is three months from the first publication of the Notice to Creditors. Under Florida Statute 733.710, most claims are barred entirely if not filed within two years of the date of death, regardless of notice.

Does Florida have an estate tax or inheritance tax?

No. Florida imposes neither a state estate tax nor an inheritance tax. Heirs owe no Florida tax simply for inheriting. Federal estate tax can apply to very large estates that exceed the federal exemption, and the decedent’s final federal income tax return must still be filed.

What gets paid first when a Florida estate cannot pay all its debts?

Florida Statute 733.707 sets the order. Administration costs and attorney’s fees come first, then funeral expenses, then certain taxes with federal preference, then last-illness medical bills, family allowance, child support arrears, and finally ordinary debts such as credit cards. A personal representative who pays out of order can be held personally liable.

Is the family home safe from creditors in a Florida probate?

Often yes. Florida’s constitutional homestead protection generally shields a qualifying primary residence from most creditor claims, allowing it to pass to heirs outside the general creditor pool. The rules depend on residency, acreage, and who qualifies as an heir, so the homestead status of any real property should be confirmed before assuming it can be reached by creditors.