What Happens to Debts and Taxes in Florida Probate? A Boca Raton Attorney’s Guide

In Florida probate, a deceased person’s debts and taxes are paid out of the estate’s assets before anything passes to the heirs or beneficiaries, with the personal representative settling valid creditor claims according to a priority order set by state law. Creditors generally have a limited window to file claims, and any estate that still owes money cannot fully distribute property until those obligations are resolved or barred. Florida has no state estate or inheritance tax, so the tax side usually narrows to the decedent’s final income taxes and, rarely, federal estate tax on very large estates.

That short answer hides a lot of real-world complication, especially in Boca Raton, where so many estates are built around a primary home, a condo, or investment real estate. Property doesn’t just sit quietly while debts are sorted out. There are mortgages to keep current, association dues that keep accruing, property taxes that come due every November, and creditors who want to know whether they’ll be paid before the house is sold. Below is how it actually works.

Who Pays the Debts in a Florida Probate Estate?

The short version: the estate pays, not the heirs. When someone dies, their debts don’t evaporate, but they also don’t automatically become the personal obligation of their children or other relatives. Instead, the debts attach to the estate. The court appoints a personal representative (Florida’s term for an executor or administrator), and one of that person’s core jobs under Chapter 733 of the Florida Statutes is to identify, evaluate, and pay legitimate debts using estate funds.

This is one of the most common sources of relief I see at the kitchen-table conversation. A surviving spouse or adult child walks in convinced they personally owe a parent’s credit card balance or medical bills. In the vast majority of cases, they don’t. The exceptions are narrow: debts the relative cosigned, jointly held accounts, or obligations they guaranteed in writing. A debt that belonged to the decedent alone is the estate’s problem, and if the estate runs out of money, the unpaid balance generally goes unpaid.

The personal representative’s duty to creditors

The personal representative has to make a diligent search for the decedent’s creditors. That means reviewing mail, bank statements, and records to find anyone the decedent may have owed. Known or “reasonably ascertainable” creditors must be served directly with a notice; unknown creditors are reached through published notice. Skipping this step is not a shortcut. It can extend the time creditors have to come after the estate and expose the personal representative to personal liability for distributing assets too soon.

How Creditor Claims Work in Florida Probate

Florida runs creditor claims on a clock, and the clock is central to how quickly an estate can close. Once a formal administration is opened, the personal representative publishes a Notice to Creditors in a local newspaper. Under Florida Statutes § 733.702, most creditors must file their claim with the court by the later of three months after the first publication date or thirty days after they are served with notice. Miss that window, and the claim is generally barred.

There is a hard outer boundary too. Under Florida Statutes § 733.710, claims are absolutely barred two years after the date of death, whether or not probate was ever opened and whether or not notice was published. That two-year statute of repose is one reason families sometimes discover an old, unaddressed estate years later and find the creditor exposure has quietly closed.

Here is the typical sequence:

1. Notice goes out. The personal representative publishes notice and serves known creditors directly.
2. Creditors file claims. Each claim is filed as a “Statement of Claim” in the probate court file.
3. The personal representative reviews each claim. Valid claims are paid; questionable ones are scrutinized.
4. Objections are filed if warranted. If the personal representative disputes a claim, an objection is served, and the creditor then has a limited time to file an independent lawsuit to enforce it.
5. Payment occurs in statutory priority order once the claim period has run and the estate’s solvency is clear.

This same claims architecture causes friction nationwide; many of the trace back to creditor notice and disputed claims rather than the will itself.

The Order Debts and Taxes Are Paid

When an estate doesn’t have enough money to pay everyone, Florida doesn’t let creditors fight it out first-come, first-served. Florida Statutes § 733.707 sets a strict priority ladder. Higher classes get paid in full before lower classes get anything, and if a class can’t be paid completely, the available money is split proportionally within that class.

The classes, in order, run roughly like this:

• Class 1 — Costs and expenses of administration, plus reasonable attorney’s fees. The estate has to be administered before anyone gets paid.
• Class 2 — Reasonable funeral and burial expenses, up to a statutory cap.
• Class 3 — Debts and taxes with federal preference, including certain federal tax obligations.
• Class 4 — Reasonable medical and hospital expenses of the last 60 days of the decedent’s final illness.
• Class 5 — Family allowance paid to a surviving spouse and dependents.
• Class 6 — Arrearages from court-ordered child support.
• Class 7 — Debts from continuing the decedent’s business, within limits.
• Class 8 — All other claims, including ordinary credit cards and unsecured loans.

Notice where everyday credit card debt lands: dead last. That ordering matters enormously in a tight estate. The grocery-store rewards card with a $9,000 balance does not get paid before the funeral home, the IRS, or the lawyer who is actually doing the work of closing the estate.

Secured debts are a different animal

The priority ladder above governs unsecured claims. A mortgage, a car loan, or a tax lien is secured by specific property, and that changes everything. The lender’s interest follows the asset. If the decedent owed $300,000 on a Boca Raton condo, that mortgage doesn’t get wiped out by probate; the lien rides with the property. The estate’s choices are usually to keep the loan current and pass the property (subject to the mortgage) to a beneficiary, or to sell the property and pay the loan off from the proceeds.

Real Property, Debts, and Why Boca Raton Estates Are Different

In a real-property-heavy estate, the home is frequently the single largest asset and the single largest carrying cost at the same time. Even after death, the bills keep arriving. Someone has to keep the lights on and the property insured, particularly with Florida’s windstorm and flood exposure, or the estate risks losing value or facing a coverage gap.

A few realities I walk Boca Raton families through:

• Homestead is special. A constitutionally protected Florida homestead that passes to heirs is generally shielded from the decedent’s general creditors, with narrow exceptions like the mortgage on it, property taxes, and association liens. This protection can mean the home passes to family even when other creditors go unpaid, but it is a technical area that gets litigated.
• Condo and HOA dues never stop. Association assessments keep accruing during probate, and the association can lien the unit. These are ongoing obligations the personal representative must manage from day one.
• Property taxes come due annually. Palm Beach County real estate taxes are payable each fall, and unpaid taxes become a lien with serious consequences if ignored.
• Selling to pay debts requires care. If the estate has to sell real estate to satisfy creditors, the personal representative must follow the will or, absent direction, the statutory rules on which assets are tapped first.

Because so much value is tied up in real estate that can’t be liquidated overnight, these estates often need active management of debt during the months probate is open, not just a single payoff at the end. Our Florida team handles exactly these situations through our , and you can learn more about Florida-specific real estate considerations on our Florida probate overview.

Taxes in Florida Probate: What You Actually Owe

Tax fears in probate are usually bigger than the reality, at least in Florida. Here’s the practical breakdown.

No Florida estate or inheritance tax

Florida repealed its estate tax, and the state has never imposed an inheritance tax. So a beneficiary inheriting a Boca Raton home or a brokerage account does not pay Florida tax on the inheritance itself. This is a genuine advantage of dying as a Florida resident and one reason snowbirds make their Florida residency official.

Federal estate tax — rarely a factor

Federal estate tax only applies to estates that exceed the federal exemption, which sits in the multi-million-dollar range per person and adjusts over time. The overwhelming majority of estates fall well under that threshold and owe nothing. Large estates, or those with closely held businesses and significant real estate portfolios, should run the numbers with counsel, because exemption levels are scheduled to change and proper planning around them matters.

The decedent’s final income taxes

This is the tax obligation that actually shows up in most probates. The personal representative is responsible for filing the decedent’s final federal income tax return (Form 1040) for the year of death, and, if the estate generates income during administration—say, rent from an investment property or interest on accounts—an estate income tax return (Form 1041) may be required too. Federal income tax claims carry preference in the payment priority discussed above, so these are not obligations to defer casually.

Property taxes and liens

As noted, real property taxes continue to accrue and must be paid to avoid liens and, eventually, tax deed sales. In a real-estate-centric estate, keeping property taxes current is part of preserving the asset’s value for the beneficiaries.

What Happens If the Estate Can’t Pay Everything?

An estate that owes more than it’s worth is “insolvent.” When that happens, the personal representative pays claims strictly in the statutory priority order, full classes first, then proportional payment within the class where the money runs out. Lower-priority creditors simply don’t get paid, and—critically—the heirs are not on the hook to make up the difference out of their own pockets. The personal representative’s protection here lies in following the statute precisely: pay in order, document everything, and don’t distribute to beneficiaries before creditors in the proper sequence are satisfied.

Distributing assets to heirs too early, while valid claims are outstanding, is one of the fastest ways for a well-meaning personal representative to incur personal liability. This is exactly where experienced counsel earns its keep.

How Debts and Taxes Can Become a Probate Dispute

Money is the most common spark for probate conflict. A creditor’s claim may be inflated, time-barred, or simply wrong, and the personal representative has to decide whether to object. A beneficiary may suspect the personal representative is paying favored creditors out of order, or selling real estate at a low price to a friend to cover debts. And sometimes the dispute reaches back to the will itself—if heirs believe the document is invalid, the entire framework for who inherits the post-debt estate is in play. The mechanics of how a differ by state, but the underlying pressure points—undue influence, capacity, and proper execution—recur everywhere.

If you’re weighing whether you even have grounds to challenge a debt payment, a sale, or the will, it’s worth a focused conversation before deadlines close those doors. You can review our broader estate work on our wills and estate planning page or reach out through our contact page.

The Bottom Line for Boca Raton Families

Debts and taxes are paid by the estate, in a strict order, within deadlines that close fast. Florida’s lack of an estate or inheritance tax simplifies the tax picture for most families, leaving final income taxes and ongoing property obligations as the practical concerns. And because Boca Raton estates so often revolve around real estate—homestead protections, association dues, mortgages, and property taxes all interacting—the smart move is to manage the property and its creditors actively from the moment probate opens, not as an afterthought at the end. Done right, the estate’s obligations are settled cleanly and the family keeps as much of what was left to them as the law allows.

Frequently Asked Questions

Are heirs personally responsible for a deceased person's debts in Florida?

Generally no. A decedent’s debts are paid from the estate, not from the heirs’ own money. Heirs become responsible only for debts they cosigned, jointly held, or personally guaranteed. If the estate runs out of assets, unpaid unsecured debts typically go unpaid rather than passing to relatives.

How long do creditors have to file a claim against a Florida estate?

Once a Notice to Creditors is published, most creditors must file within the later of three months after first publication or 30 days after being served (Fla. Stat. § 733.702). Regardless of notice, all claims are absolutely barred two years after the date of death under Fla. Stat. § 733.710.

Does Florida have an estate tax or inheritance tax?

No. Florida has no state estate tax and no inheritance tax, so beneficiaries do not pay Florida tax on what they inherit. Only the rare estate exceeding the federal exemption owes federal estate tax. The tax most estates actually deal with is the decedent’s final income tax return.

What happens to the mortgage on a Boca Raton home during probate?

A mortgage is a secured debt, so the lien stays attached to the property. The estate generally either keeps the loan current and passes the home (subject to the mortgage) to a beneficiary, or sells the property and pays off the loan from the proceeds. Probate does not erase the mortgage.

In what order are debts paid if a Florida estate can't pay everyone?

Florida Statutes § 733.707 sets the priority: administration costs and attorney’s fees first, then funeral expenses, federal-preference taxes, last-illness medical bills, family allowance, child support arrears, business debts, and finally ordinary unsecured debts like credit cards. Higher classes are paid in full before lower ones receive anything.