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Probate

 

What is probate?
When an Ohio resident dies owning probate property in the state, a legal proceeding to determine the deceased's assets, their value and the method of distribution to heirs is provided for by law. This proceeding is called probate, and it occurs whether the person dies with or without a will. Probate takes place in the probate court of the county where the deceased property owner resided. If the decedent also owned property in another state, additional proceedings may be necessary in that state. Probate property is all property that is not covered by any contract (or deed) providing for a succession on the death of the owner.

Why is probate necessary?
Probate is necessary to protect the assets of the decedent for the heirs, creditors and other persons due money from the estate, and to ensure the collection of money due to the estate. Probate provides for payment of outstanding debts, taxes and the expenses of administration and for the distribution of the remainder of the estate to the heirs.

What does probate involve?
Probating an estate requires the appointment of a person to conduct the administration of the estate. If there is a will, this person is usually named in the will and is called an executor. If there is no will, this person is appointed by the probate court and is called an administrator. The executor or administrator may be an individual, a bank or a trust company.

The executor or administrator takes care of the following tasks:

  • caring for all property of the decedent;
  • receiving payments due the estate, including interest, dividends and other income;
  • collecting debts, claims and notes due the decedent;
  • determining the names, ages, addresses and degree of relationship of all heirs;
  • determining the names, ages and addresses of all beneficiaries, if there is a will;
  • investigating the validity of all claims against the estate and paying all outstanding obligations including federal, state and local estate and income taxes;
  • planning for federal and state taxes and preparing and filing estate tax returns when required;
  • carrying out the instructions of the probate court pertaining to the estate and distributing the assets of the estate to the heirs.


The probate court judge supervises the work of the executor or administrator. These actions require the preparation and filing of numerous legal documents, the provision of notices, hearings in court, an appraisal of the assets of the estate, an inventory of the assets, completion of final income tax returns and possibly gift and estate tax returns, an accounting of funds, final transfer of all assets to beneficiaries, termination of the probate proceeding, and discharge of the executor or administrator by the probate court. Because of the complexity of these procedures, the assistance of an attorney usually is needed.

If the total value of all property in the decedent's individual name is $35,000 or less, the estate can be relieved from most of these administrative requirements. Where the decedent's spouse is entitled to receive all of the estate's assets, the amount is increased to $100,000. In most estates, an Ohio estate tax return must be prepared and filed. A federal estate tax return may have to be filed depending on the total value of all assets of the decedent.

How much does probate cost?
The costs assessed by the probate court are based on a schedule of charges established by law for each type of document filed in the court. Attorney fees charged for handling matters of the estate must be approved by the court and are based on the actual services performed by the attorney.

How long does probate take?
New legislation, soon to be enacted, will require an estate to be settled within six months of the appointment of the executor or administrator. However, if an Ohio or federal estate tax return is required, the administration of the estate can last more than a year. (Estate taxes are not due until nine months after the decedent's death.) The audit of a federal estate tax return often takes another year, and an executor or administrator cannot safely distribute all of the estate assets until released from personal liability for estate taxes. An extraordinary case involving a contested will or complicated tax litigation may take three years or more. Claims against the estate may be made up to one year from the date of death.

Will joint tenancy avoid probate?
"Joint tenancy with right of survivor ship" is a form of co-ownership of property whereby two or more persons own property together. On the death of one joint owner, proceedings may still be required to transfer title of certain assets and to determine taxes. Joint tenancy can be a useful device in certain situations. However, the unrestricted use of this device can lead to adverse consequences. Often, litigation over bank accounts occurs to determine whether the creator of the joint tenancy wanted the survivor(s) to be the sole owner(s) of the property.

Other forms of property ownership that bypass probate include life insurance, retirement plans passing to a designated beneficiary, securities and real property designated to be transferred on death (TOD) to a named beneficiary, and assets within a revocable trust funded by the decadent during his or her lifetime.

Even if assets bypass the probate process, they are still subject to estate taxes.

Do I need a will?
A properly drawn will assures you that, upon your death, your property will be distributed as you intended. It is important that you review your will periodically with your attorney in order to keep it up to date. A will is also the mechanism for choosing the executor and commonly provides for the nomination of a guardian where there are minor children. A will can also dispense with the requirement of a surety bond which an administrator might otherwise have to pay.

Wills must be filed in the probate court upon death. The law provides penalties for the withholding or destruction of a will.

If you do not make a will, your property will be distributed according to the Ohio Statute of Descent and Distribution.

 

 

   

   

 

Reprinted courtesy of the Ohio State Bar Association

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