The Probate Process

Each state controls and supervises the distribution of the probate assets of its deceased residents. This article provides a brief summary of how the process works in Ohio.

Is There A Will?

This question must be answered before the process can start. A will specifies the beneficiaries, their shares, and the person in charge of the process (Executor). If the decedent did not make a will, then Ohio chooses the beneficiaries with a prioritized list. The surviving spouse and children take to the exclusion of everyone else. If the decedent left no spouse or children, then these persons, or their descendants, inherit in the following order: parents; brothers and sisters; grandparents; step-children; and if there are no relatives, then escheat to the state of Ohio. Family members, especially the spouse, hold the first right to administer the estate with no will.

Enhanced Rights of the Spouse

Regardless of whether a will exists, the surviving spouse enjoys some special rights. If a pre-nuptial agreement does not state otherwise, then the widow or widower can receive at least 1/3 of the probate estate. This surviving partner may also take part or all of a $40,000 family allowance, select up to two cars worth no more than $40,000, purchase assets from the estate, and live in the residence rent free for a year. The surviving spouse may also hold a lifetime interest in 1/3 of the real estate a decedent owned if he sold it without the spouse’s permission. This right is known as dower. Also, a surviving spouse may utilize most, if not all, of the proceeds in joint and survivor accounts without first obtaining a tax release from the County Auditor.

Assets Subject to Probate

The probate court does not necessarily administer all of the decedent’s assets. Some written agreements may control the disposition of an item. Joint and survivor property, payable on death accounts, annuities, 401(k)s, IRAs, life insurance death benefits, and living trusts directly pass ownership to the beneficiary. Assets in the decedent’s name that do not have survivorship designations come under the probate court’s jurisdiction. A will only disposes of assets that pass through probate court. A person can have substantial worth and leave no probate estate. For example, a decedent may hold everything with a spouse or other person in a joint and survivor format or place all of his property inside of a living trust. Under both examples, the will would transfer nothing to its beneficiaries.

Appointing the Estate Fiduciary, Providing Notice, and Identifying Assets and Debts

Someone must step forward to begin the process. Usually this happens once the funeral is over. A “Reading of the Will” is a rare event. Instead, a surviving spouse, a child selected by the siblings, or a close friend finds the instrument (if there is one) and takes it to an attorney of their choice. Whoever requests court appointment as the estate’s Executor (if there is a will) or Administrator (if there is no will) must send notice of the commencement of the process to everyone named in the will and to the surviving spouse and children. If there is no surviving spouse or children, then the relatives next in the line of priority must receive such notice. The Executor or Administrator, also referred to as an estate fiduciary, must post bond if the will does not waive this requirement. Next, the Executor or Administrator searches for all of the decedent’s assets and bills. The death expenses usually top the list of concerns. Frequently, the estate fiduciary had to personally guarantee the payment of the funeral. Once the attorney knows the names of all accounts and has the date of death balances, he then obtains a tax release from the County Auditor so that the Executor or Administrator can access the funds to pay the funeral bill and other debts. At this time or shortly thereafter, the estate fiduciary files an inventory of all of the probate assets.

Will Contests

As a general rule, a person may contest the decedent’s will up to four months after receiving the notice of commencement of probate. Only a small percentage of estates undergo this ordeal. To set aside the instrument, the protestor must show that, when making the will, the decedent surrendered to a great deal of unfair influence or did not have enough knowledge of his circumstances. Although this does not state the standard in strict legal detail, this shows how difficult it is to prove a case. Ohio allows a will to exclude a beneficiary if he contests the document. Of course, such a provision does not work if the will contest succeeds, but it can serve as a strong deterrent. Further, if all of the decedent’s property is held joint and survivor, in a living trust, or in another non-probate form, then a will contest may be pointless. If there is no probate property, then the will controls nothing.

Paying Bills, Selling Assets, and Resolving Lawsuits

An estate fiduciary must pay all of the decedent’s enforceable bills. If he does not, then he may have to pay them himself. If some of the bills are questionable, then the Executor or Administrator may provide a creditor notice to submit a claim in a short period of time or be forever barred from doing so. Normally a creditor may submit a claim against an estate up to six months after the decedent’s death. Of course, the estate fiduciary may not take this approach to avoid paying the decedent’s taxes or to escape his duty to prepare and file all the necessary returns. The Executor or Administrator must ascertain and pay the estate taxes, both federal and state. The decedent’s income tax returns and payments generally are subject to the same rules as if he were still alive. If there are not enough liquid assets to pay the taxes and debts, then the estate fiduciary must sell assets. The first assets sold are those not specifically left to a beneficiary, but these may be sold if necessary. If a will does not provide the Executor the power to sell items, then he first must get court permission. Attorney fees are also subject to court approval. If there are not enough assets to pay all of the obligations, then some creditors have preferential rights. The funeral, hospital and doctor bills, and costs of estate administration all receive high priority. If the decedent was involved in any lawsuits, then the estate fiduciary must resolve them. If the decedent died due to someone else’s fault, then the Executor or Administrator is the only person the Ohio Wrongful Death Act authorizes to pursue this litigation.

Distribution of the Assets

Once the estate fiduciary pays all of the taxes and bills, he may then distribute the remaining assets to the beneficiaries. If any beneficiary is less than twenty-one years old, then the will may direct the Executor to place a beneficiary’s share in a Uniform Transfers to Minors Act (UTMA) account. Such an arrangement allows the account custodian to distribute items for the youngster’s health, support, maintenance, and education, then release the rest to him at age twenty-one. A will may also contain a trust effective at the decedent’s death. This is known as a testamentary trust. A probate court supervises this type of instrument as long as it holds assets. If there are minor beneficiaries but no UTMA provision or testamentary trust, then the probate court will mandate the restriction of a minor’s share until the beneficiary reaches the age of eighteen. Prior to this age, they can access the funds for their health, support, maintenance, and education. Upon their eighteenth birthday, they receive their remaining inheritance.

Guardianship of Minor Children

A will can nominate a person in any state to serve as the guardian of a decedent’s children. Such a nomination, though, cannot supercede the custodial rights of a biological parent. If there is no such nomination and no surviving parent, then the probate court may appoint as guardian an Ohio resident or a non-Ohio resident when a child older than fourteen so requests.

Ancillary Administration

If a person dies owning property in a different state, then that other state may require an ancillary administration to transfer title to the beneficiaries. If the decedent owned the property in a joint and survivor format or held it in a living trust, partnership, limited liability company, or corporation, then an ancillary administration would, in all likelihood, not be necessary.

Preparing and Filing Accounts

To complete his duties, the Executor or Administrator must file a final account the probate court finds acceptable. Larger estates, or those involved in litigation, may require more than one account. The estate fiduciary must provide cancelled checks or other suitable evidence to show that he made the proper distributions. Probate courts deal harshly with unauthorized payments, even if they are unintentional. If the Executor or Administrator does not timely file the accounts, then the probate court may remove him.

Role of the Attorney

Administration of an estate is a complicated process. Attempting the process without a competent attorney would be foolhardy, if not dangerous. The Executor or Administrator may select an attorney of their choice to advise and represent them. Experienced counsel can guide the estate fiduciary through the process by preparing and filing all the necessary documents, ascertaining and collecting the assets, reviewing and paying the proper debts, transferring titles to items, resolving any court cases, providing advice to save transfer costs and taxes, and counseling the Executor or Administrator on relations with beneficiaries. If you have any questions, or need assistance in handling a decedents’ estate, then call us right away at (937) 667-8805.