What Does It Mean to “Marshal” an Estate’s Assets?

One of the key tasks of estate and probate administration is “marshaling” assets. This basically means that when a new estate is opened, the personal representative is legally required to locate and take charge of any probate asset belonging to the deceased individual. If the personal representative neglects this responsibility and fails to locate some of the estate’s property, he or she can be held personally liable by the probate court. (For this reason, personal representatives often need to post a bond as a condition of their appointment.)

Once the estate’s assets are marshaled, the personal representative then typically files a formal inventory with the court. This lets both the court and the estate’s beneficiaries know just what property is part of the probate. Keep in mind there are many assets that fall outside of probate, such as property belonging to a trust or retirement accounts naming a specific beneficiary; these non-probate assets are not marshaled and therefore not included on the inventory.

Marshaling Dispute Leads to Court-Ordered Restrictions

While the marshaling process is relatively simple and non-controversial for most estates, there are situations where an estate’s beneficiaries may challenge the personal representative’s handling of this duty. This can lead to litigation. And if the lawsuit has merit, the probate court may decide it is necessary to provide more “direct” supervision of the personal representative.

Here is a recent case from Palm Beach County, Goodstein v. Goodstein, involving just such a dispute. This case involves a man who died leaving a will naming his three children as beneficiaries. The will also named the deceased man’s father as personal representative.

Litigation promptly followed as the beneficiaries objected to the personal representative’s appointment. Eventually both sides agreed to a mediated settlement. But this did not end the litigation. The beneficiaries later went back to court, alleging the personal representative had not properly marshaled the estate’s assets and was now “restricting” the information they received regarding the estate.

The beneficiaries therefore requested a court order directing the personal representative to place the estate’s assets in a “restricted depository.” Florida law permits the use of such repositories when the personal representative is required to post a “burdensome” bond or “for other cause” as the court deems appropriate. In addition, the Palm Beach court had a local policy requiring the use of restricted depositories for “all probate cases in its jurisdiction.” On that basis, the judge therefore granted the beneficiaries’ request.

The personal representative appealed this decision. The Florida Fourth District Court of Appeal affirmed the decision to require a restricted depository, but with an important caveat. The appeals court said it did not approve of Palm Beach’s blanket policy mandating such depositories in all cases, which is “improper” under state law. That said, the probate court did properly find “other cause” to require a restricted depository in this case, namely the fact there was questions regarding the marshaling process and “neither the beneficiaries nor trial court knew how estate assets were being spent.”

Contact a Florida Probate Lawyer Today

Administering a Florida estate is an important responsibility. The process can often seem overwhelming. But working with an experienced Fort Myers estate and probate administration lawyer can go a long way to making the process run smoother. Contact the Kuhn Law Firm, P.A., at 239-333-4529 if you need advice or assistance today.

Source:

scholar.google.com/scholar_case?case=3463294626043710056

https://www.kuhnlegal.com/how-an-irrevocable-trust-can-lead-to-litigation/