Many questions may arise when a person passes away and the person’s professional association holds some assets. The professional association may be a corporation, which is a separate legal entity from the person. In this case the personal representative will not have automatic entitlement to the business assets. This remains true even if the deceased person owns 100% of the corporation. For example if a person owns a successful corporation that operates throughout several South Florida counties and the owner passes away, his probate administration may be conducted in Broward County. The personal representative of the estate may wish to reach the corporation’s assets to satisfy the deceased person’s estate obligations. However, Florida courts have decided against letting a personal representative receive automatic control of the business or its assets.
Pursuant to Florida Statute 733.602, a personal representative has many duties including a duty to settle and distribute the estate of the decedent in accordance with the terms of the deceased person’s will. A personal representative has the authority conferred by Florida Laws, the authority in the will, and, if any, the authority of any order of the court. The personal representative has an obligation to protect the interests of persons interested in the estate, including creditors. While an estate’s personal representative may be entitled to take possession of the deceased person’s corporate stock, this power does not extend to the corporation’s funds on deposit in the corporate name at a bank. This is because the affairs of a corporation, even though substantially owned by the deceased person, are unable to be administered by his or her personal representative as assets of the decedent’s estate. It is important to note that a court does have the power to help marshall assets of an estate and to order those assets turned over to the personal representative. The court also has the power to issue a temporary injunction freezing assets claimed to belong to a decedent’s estate, including corporate assets, even though ultimate ownership of those assets may be in dispute.
A deceased person’s corporate assets may be frozen in order to determine the ultimate ownership. Navigating through this process requires legal expertise to ensure assets are handled appropriately. If you or someone you know lives in the Broward, Miami-Dade, or Palm Beach area, and requires an experienced attorney to help you determine your rights as a personal representative or a beneficiary, please feel free to contact the probate litigation team at Chepenik Trushin LLP for an initial consultation.
Resources:
Florida Statutes (2011)
Brodfuehrer v. Estate of Brodfuehrer, 833 So. 2d 784 (Fla. 3d DCA 2002)
BankAtlantic v. Estate of Glatzer, 61 So. 3d 1222 (Fla. 3d DCA 2011)