Probate and Estate Law
Fanger & Associates LLC, An Ohio Law Firm
Introduction to Probate Law
Probate law affects many aspects of everyday activity. For example, probate law governs the: (1) transfer of real and personal property upon a person's death; (2) care of persons who have mental or physical disabilities; (3) adoptions; and (4) issuance of marriage licenses.
In general, probate law is thought of as the law which concerns the proper administration of the estates of persons who have died. The proper administration of these estates includes, among other things, the payment of taxes and just debts, and the transfer of all property to the appropriate people or entities.
Probate law also addresses many other issues. For example, it includes commitment of the mentally ill and mentally retarded for care and treatment; adoption; appointment of guardians and conservators to care for children and other persons who cannot care for themselves or their property; and the issuance of marriage licenses. In addition, in most counties the probate court has jurisdiction over juvenile matters. See Part II, "The Courts," and Part X, "Family Law."
Each of the 88 counties in Ohio has a court of common pleas. Each common pleas court has a "Probate Division" which is commonly called the "Probate Court." The probate court's main duties may be summarized as: the supervision of the administration of decedents' estates and the protection of the interest of certain persons who are particularly vulnerable to loss or harm, for example, next-of-kin and other heirs entitled to an inheritance; children; beneficiaries of trusts; persons suffering from mental illness or disability; persons suffering from developmental disabilities; and persons suffering from other physical disabilities.
Experience shows that some people need special protection. Children are sometimes orphaned. Parents are sometimes not able to care for their children. People suffer from mental illness, developmental disabilities, and physical disabilities. Age or illness can affect a person's physical ability or mental capacity, or both, including the ability to care for one's self or property. In Ohio, the probate court has the jurisdiction (the power) to supervise the protection of minors and others who have physical or mental disabilities. For example, the probate court appoints guardians for both minors and adults; handles adoptions; and handles applications to hospitalize persons who may have mental problems.
When a person dies, his property must go to someone. The property must be transferred to: (1) the persons named by him in his will; (2) where there is no will, to the heirs named in Ohio law; or (3) pass by contract or deed to a designated survivor ("will substitutes.")
Executors, administrators, guardians, conservators, trustees, attorneys-in-fact, and other persons who act on behalf of third persons are "fiduciaries." Fiduciaries owe a special duty to those whose interests and property they control or manage. When an executor or administrator is appointed to settle an estate, or a guardian is appointed to look after the affairs of a child or a person who cannot care for herself or her property, it is important that the fiduciary's conduct be supervised. The same is true when a person gives property in trust to another (a trustee) to hold and manage for the benefit of a third person, or gives a power of attorney to another (an attorney-in-fact). Fiduciaries are in positions of trust, and historically, act under the supervision of the probate court. Fiduciaries, appointed by the probate court, must regularly report their activities, particularly their financial activities, to the probate court. Trustees serving under agreements of trust created outside a will are generally not subject to probate court supervision.
One of the main attributes of private property is that its current owner can dictate who is to be the future owner when the current owner dies. The usual device for transferring ownership upon death is called a will, or more formally, a "last will and testament." Although, increasingly, people are using "will substitutes" involving beneficiary or survivorship designations.
Under Ohio law, any person age 18 or older, who has a sound mind and memory, and is not under restraint, can make a valid will.
The requirement of "sound mind and memory" does not mean that the testator (the person who makes the will) must be in total possession of her faculties. Her mind may be dulled by pain or sickness or enfeebled by age; she may be neurotic; she may even suffer to some extent from mental deficiency or mental illness. If these infirmities are not too severe, she may still be able to make a valid will. In order to have the ability to make a will, or testamentary capacity, a person only needs to: (1) understand that she is making a will; (2) know the general extent of her property; (3) understand the relationship she holds with those who may have claims on her generosity; and (4) appreciate her relationship with members of her family. The fact that a will makes an apparently unfair or unequal distribution of the testator's property does not necessarily indicate that the testator lacked the mental capacity to make the will. A testator's will may disregard family and friends of long standing and still be valid. See "Limitations on Wills; Special Provisions" below, for a discussion of the rights of a surviving spouse.
The requirement that a testator is not under restraint means that testator must be free to choose to make a will and to make it the way she wants. Stated another way, a testator cannot be coerced, defrauded, or improperly influenced into making a will, or into making a will in a certain way.
A will must be in writing, signed at the end by the testator, and attested by two competent (and disinterested) witnesses. These basic requirements are strictly enforced, although there is some leeway in how the requirements can actually be met. The will may be typed, or handwritten, or even be partially typed and partially handwritten. Another person may sign the will for the testator, provided this person does so at the testator's specific direction and in testator's presence and the presence of the witnesses.
If the testator herself signs the will, the actual signing need not be done in the presence of the witnesses. If the testator does not sign the will in the presence of the witnesses, she must acknowledge to the witnesses that the document is her will and the signature is hers. For example, the testator may come into a room with a signed piece of paper and tell the witnesses something like: "This is my will. I have signed it. See, look at my signature; both of you know my signature. I request that both of you sign the will." If this, or a similar conversation occurs and the witnesses know the testator's signature, and sign the paper, the requirements for a valid will may have been satisfied. However, it is better to follow the ordinary practice of: (1) the testator telling the witnesses that this is her will; (2) the testator actually signing the will in the witnesses' presence; and (3) the witnesses signing the will. (Please note that the law does not require that a will be notarized.)
The witnesses to a will may not take under the will. That is, any gift to a person who is a witness to the will is invalid. The reason for this rule is that a witness who could take under the will would be biased. Such a witness would certainly be interested in seeing that the will is enforced. This rule affects the particular gift; it does not invalidate the entire will. However, a will would be invalid if the only persons who would take under the will are the witnesses to the will.
Persons who want to make wills should consult a lawyer about the writing and signing of wills. Finally, it should be noted that lawyers who draft wills are under professional limitations similar to those of witnesses. In general, the lawyer who drafts a will cannot take under the will.
There is a single exception to the requirement that a will be in writing. An oral, or "nuncupative," will is valid to transfer personal property-not real property-under certain conditions. The conditions are: (1) the will is made by testator while testator is dying and knows she is dying; (2) testator states her will to two competent, disinterested witnesses whom testator has specifically asked to hear her last will; (3) the witnesses write out the will and sign it within ten days of testator's statement; and (4), the written will is filed with the probate court within six months after the testator's death. Finally, an oral will cannot take precedence over a previously valid written will.
Ohio law states that a will cannot affect the distribution of the testator's property unless the will is filed with the probate court for purposes of administering the estate according to law. Stated another way, this rule means that a will must be admitted to probate by the court before it can control the distribution of testator's property. A will which is in a drawer at home has no effect. Under the law, anyone knowing of such a will has an obligation to notify the probate court of its existence and location.
When an original will is misplaced, destroyed, or spoiled ("spoliated") in some way, a copy can be admitted to probate, provided: it can be proven that the will is valid and is the last will of the testator, and that the testator did not know that the will was misplaced, destroyed, or spoliated. People have a natural tendency to put wills in safe places. Sometimes these places are so safe that wills cannot be found. Further, a will may be destroyed or damaged in a fire or flood. Where a will cannot be found, or has been totally, or partially, destroyed, copies of the original are often available. Attorneys generally keep copies of the wills they have prepared (partly because many wills are lost or destroyed). These copies can be filed with the court and the court requested to admit the copy to probate.
A will can be revoked in a number of ways. The most common way is by making a new, or later, will. One of the standard statements in a will is that the making of a particular will revokes all previous wills. Pursuant to this statement, the latest will revokes all previous wills made by testator. A testator can also revoke a will by taking the following actions with the intention of revoking the will: canceling it; tearing it up; obliterating it; or destroying it. The testator must personally take such actions, be present when such actions are taken, or give another person written instructions to take such action on testator's behalf. Examples of "canceling," "tearing," "obliterating," and "destroying" a will are stated below in the hypothetical situation in which a testator makes a series of wills. It is important to know that proof of the testator's actions and intent is necessary where there is an apparent cancellation, tearing, etc.
Wills are often amended by the conditions stated in divorce decrees or separation agreements. When a court issues its decree or order in a divorce case, or approves a settlement in a dissolution of marriage, the court's order revokes the provisions in a will for former husbands or wives.
Wills may be amended by a "codicil," a document which meets the same requirements as an original will. That is, the amendment must be in writing, signed at the end by the testator, and attested by two competent (and disinterested) witnesses. A codicil may have the effect of revoking a prior will if the amendment makes substantial changes.
Where the testator is competent, the revocation of a prior will is absolute. Stated another way, once a will is revoked, it stays revoked. The best way to explain this concept is by example. Tom makes will number one. Later, he writes "CANCELED," or words having a similar meaning, on all the pages of the will and through his signature. Tom then makes will number two. Later, he tears up will number two. Tom then makes will number three. Later, he obliterates everything in will number three (he takes a black permanent marker and lines out everything in the will). Tom then makes will number four. Later, he burns will number four. Assuming that Tom was competent at all times, and that he clearly took the above actions to revoke the various wills, Tom does not have a will. Tom has revoked all his wills. If Tom dies, none of the wills he made can be revived.
The general rule is that a testator can use a will to dispose of his or her property in any way, or to any persons, the testator wants. There are important exceptions to this general rule. Further, the law makes special provision for circumstances that are often overlooked by people when they make wills or when their circumstances change after they have made a will.
While a testator can disinherit others, a testator cannot entirely disinherit his or her spouse by making a will which specifically disinherits the spouse, or which leaves the spouse a token inheritance. The law gives the surviving spouse certain choices which prevent total disinheritance of the assets which are subject to probate administration. (Certain assets not subject to probate administration and are called "nonprobate assets." For example, assets which are derived from contractual agreements such as insurance policies, pay on death accounts, joint and survivorship accounts, pensions, or security accounts with pay on death or joint and survivorship provisions, function independently of wills and may not be subject to probate administration. These devices are sometimes called "will substitutes").
The surviving spouse can accept the will and take whatever share of the estate the will provides, or reject the will and take whatever share he or she is entitled to under the law. In general, a surviving spouse is entitled to one-half or one-third of a testator's net estate, depending on the number of testator's children who survive the testator. See the "Statute of Descent and Distribution" section below.
A surviving spouse is also entitled to a living allowance of $25,000 and to remain in the family home for one year. (The living allowance is treated as one of the debts of the estate.) If the family home is sold to pay debts, the surviving spouse is entitled to the fair rental value of the family house.
The surviving spouse also has the right to have two automobiles, provided they were not specifically bequeathed, and provided the value of both automobiles is less than $40,000. The surviving spouse is also entitled to claim one watercraft or one outboard motor not specifically given in the will. The automobiles are not subject to probate administration. The surviving spouse also has the right to be reimbursed for the payment of the funeral expenses of the deceased spouse.
The surviving spouse may have a dower interest of one third of any real property owned by the testator during the marriage, and sold, or disposed of, without the consent of the spouse. Today, the possibility of a dower interest is limited because buyers rarely purchase real property without requiring the release of the dower interest in the deed.
It should be noted that the surviving spouse is not always entitled to the entire $25,000 living allowance. The probate court is required to make an equitable distribution of the $25,000 between the surviving spouse, and any minor children who are not the surviving spouse's children. The best way to understand this requirement is through an example. Assume a prior marriage for both Peter and Mary. Each had one child in their prior marriage, and had one child together. Peter dies, leaving Mary, the surviving spouse; Mary's child, Martin; Peter's child, Michael; and their child, Marie. The probate court will have to allocate the $25,000 between Mary and Michael. In making its equitable distribution, the court will consider the needs of Mary and all the children, including Michael who is not her child. The probate court would also make an equitable distribution where there are surviving minor children and no surviving spouse.
The testator cannot leave a gift to the witnesses to the will. Such gifts are invalid, although they do not invalidate the entire will unless such persons are the only beneficiaries. Similarly, the general rule is that the testator should not leave a gift to the attorney who prepared the will. Further, a murderer cannot inherit from his or her victim, and a gift to such a murderer in the deceased's will is invalid.
A testator cannot delay the vesting of the ownership of a gift beyond the lives of the beneficiaries living at the time of testator's death plus 21 years (the rule against perpetuities). Gifts which vest beyond this time are invalid. For example, a testator cannot leave a gift to his unborn grandchild or grandchildren through a will which gives the testator's son the income of a trust for the son's life, then gives the principal of the trust equally to each of the testator's grandchildren, any of whom are unborn at the time of testator's death, who are alive 30 years after the testator's son's death. The interest the grandchildren would get would not be legally defined (vested) in each of the recipients until 30 years after the death of the testator's son. Under the common law rule, the entire gift to the grandchildren would fail because the vesting would have taken place more than 21 years after the son's death, who was the only life in being at the testator's death. Under Ohio's statutory version of the rule against perpetuities, the entire gift to the grandchildren would not fail. Rather, a court would "wait and see" what actually happened and reform (rewrite) the gift to conform to the statute. The court would probably wait and see what grandchildren, if any, were living 21 years after the son's death, and reform the gift so that it was distributed to the grandchildren who were living 21 years after the son's death.
The law has special provisions which automatically change a will in some situations. For example, the law changes a will as the testator's life changes where: (1) an additional child, or children, are born after the will was made; (2) a person named as a beneficiary in the will dies before the death of the testator, or within 30 days of testator's death; or (3) the testator is divorced or granted a dissolution of marriage.
Where there are children born to testator after a will has been made, the general rule is that these children (called "afterborn children" or "pretermitted heirs") are entitled to share in the estate the same as testator's other children. Testator is not bound by this general rule. Remember that testators are not required to leave anything to their children. Like other children, afterborn children can be specifically disinherited, or can be treated differently from their siblings. Testator's directions will be followed by the court if the will clearly shows that afterborn children are not to share in the estate, or are to share in a different way from the children who were alive when the will was made.
Similarly, when a person named as a beneficiary in a will dies before the testator, the gift is not automatically invalidated unless the will makes it clear that the beneficiary must survive the testator. If the will does not make it clear that a gift to a person who dies before the testator is invalid, the gift goes to the lineal descendants of the person named in the will, if that person is a relative of the testator. This is due to the Ohio "anti-lapse" statute. However, if the predeceased beneficiary is not a relative, then the gift to that person lapses. When a person named in the will dies within 30 days of the testator, that person is considered to have died before the testator, unless the testator otherwise provides in his will.
Where the testator is divorced, or granted a dissolution of marriage, the provisions in the will for testator's former spouse are revoked.
A will does not take effect until the testator's death, and thus applies only to property which the testator owned at death. The fact that the testator disposed of some property and acquired other property after the will was made does not necessarily affect the will. A will can still be valid and control distribution even though, at death, the testator owned none of the specific property he or she owned when the will was made. However, a gift of specific property is invalid if the testator does not own the property or any interest in it when the testator dies. For example, if the will states that "Nancy will receive my 1920 Rolls Royce" and the Rolls Royce was sold, or destroyed, before the testator's death, the gift is ineffective. The testator did not possess the particular property at death.
"Estate planning" may be defined as the development of a method for the disposition of a person's assets during life or at death. Wills, trusts, life insurance policies, pension plans, bank accounts, etc., are tools used in estate planning. The general purposes of estate planning are: (1) to transfer an owner's assets to the people or organizations selected by the owner; (2) to minimize the effects of taxes; and (3) to allow the owner to choose who will carry out the owner's plan.
In general, trusts are legal agreements in which the maker ("settlor" or "grantor") of the trust transfers property to himself or to another as trustee to manage for his benefit or the benefit of third persons. A living trust, or "inter vivos trust," is merely a trust created by the maker while the maker is alive. A living trust is the opposite of a testamentary trust, in the sense that a testamentary trust is created by will after the settlor's death.
In recent years, there has been an increased interest in, and marketing of, living trusts. In general, living trusts are nothing new. As stated above, a living trust is merely an inter vivos trust-a trust created during the life of the maker. Many claims have been made for living trusts. For example, it is claimed that living trusts: (1) avoid the cost and difficulties of probate administration; (2) avoid the costs and court intrusions of traditional guardianships; (3) avoid the loss of family resources which have been accumulated over a lifetime when a person is faced with caring for herself, or a spouse, in old age; (4) provide a way to fund the care of a person with a disability; and (5) insure confidentiality.
Estate planning requires an owner of assets to make informed choices. The owner must investigate the various tools which are available and understand the effects of the use of the various tools. A fair investigation of the claims made for living trusts would show that while living trusts are very flexible, they are not a cure-all, nor are they applicable in every situation. Such an investigation would show, among other things, the following:
- While there are expenses involved in the probate administration of a decedent's assets, expenses are also involved in the administration of a living or a testamentary trust.
- A will and thus some probate administration are necessary for most people who have a living trust because some assets have not been placed in a living trust.
- Probate administration in decedent's estate and guardianship situations does have merit. Specifically, the probate court supervises the activities of fiduciaries and requires regular reports. The court can easily replace fiduciaries who do not do their jobs, or who do not do their jobs on time.
- The widespread use of public assistance programs, such as Medicaid and Supplemental Security Income (SSI), have created special estate planning considerations for people who are trying to provide for themselves in their old age or trying to provide for someone with a disability. Public assistance programs have certain asset and income requirements. In order to meet these requirements, people sometimes transfer assets to their children or to trusts so that their children have an inheritance, or to avoid impoverishing a surviving spouse. The federal government has responded to this kind of transfer by establishing a period after such a transfer in which a person is ineligible for public assistance (for example, the current waiting period for Medicaid eligibility is three years after a transfer of assets), and by enacting legislation which makes it possible for an individual to go to a nursing facility without impoverishing his or her spouse.
- Philosophical differences exist in this area between those who promote the use of living trusts and other devices for "Medicaid planning" and those employed by governmental agencies, who regard such planning as, at best, "sheltering assets" and, at the worst, "Medicaid fraud." Beginning January 1, 1997, federal law states that it is a crime to transfer or to assist in the transfer of assets if, at the time of the application for Medicaid assistance, such a transfer would cause the applicant to be ineligible for Medicaid. The Ohio General Assembly has established a supplemental services trust for individuals with mental illness or mental retardation, or other developmental disability, which is a compromise between the above two viewpoints. The trust allows certain assets to be sheltered for limited purposes, but a portion of the assets goes to the State of Ohio for the use of others with a disability upon the death of the beneficiary of the trust.
- Estate planning is a detailed process which must be tailored to the needs of particular individuals. A person who is contemplating the use of a living trust, or other estate planning device, should consult an attorney to obtain assistance in this complex area.
What Happens When There Is No Wills
Some people simply choose not to make a will. Other people do not make a will because they may not want to offend their relatives or because they believe that the distribution required by law is appropriate for their situation. Other people want to make a will but never get around to making one. Some people make wills which dispose of only part of their property. Some wills are invalid in whole or in part. Some surviving spouses choose not to take the share provided in the will. In any case in which a person dies owning property not governed by a valid will, the Ohio statutes dictate how the decedent's probate property must be distributed.
The basic provisions governing inheritance of intestate property (property not governed by a will or any "will substitutes") are found in a law called the statute of descent and distribution. For the most part, the statute favors the nearest relatives surviving the deceased. It provides for distribution of intestate property as follows.
- No surviving spouse, but surviving children or their lineal descendants. To children in equal shares; the lineal descendants of a dead child divide child's share.
- Surviving spouse and one child or its lineal descendants surviving. The first $60,000 to the spouse (or $20,000 if the spouse is not the parent of the child) then one-half of the remainder to spouse and the one-half to the child or its lineal descendants.
- Surviving spouse and two or more children or their lineal descendants surviving. The first $60,000 to the spouse (or $20,000 if the spouse is not the parent of at least one of the children) then one-third of the remainder to spouse and two-thirds to the children in equal shares; lineal descendants of a dead child divide child's share.
- Surviving spouse, but no surviving children or their lineal descendants. All to spouse.
- Surviving parent(s), but no surviving spouse, or children or their lineal descendants. To parents in equal shares, or entire estate to surviving parent.
- Surviving brother(s), or sister(s)(full or half blood), or surviving lineal descendants of brother(s) or sister(s), but no surviving spouse, children or their lineal descendents, or parent To brothers and sisters in equal shares; lineal descendants of a dead brother or sister divide his or her share.
- Surviving paternal grandparent(s) or lineal descendants, and surviving maternal grandparent(s) or lineal descendants, but no surviving spouse, children or their lineal descendants, parent of the intestate, or brothers or sisters or their lineal descendants. One-half to paternal grandparents in equal shares, or to the survivor of them, or to their lineal descendants; one-half to the maternal grandparents in equal shares, or to the survivor of them, or to their lineal descendants.
- Surviving paternal (or maternal) grandparent(s) or lineal descendants, but no surviving spouse, children or their lineal descendants, parent of the intestate, brothers or sisters or their lineal descendants. To the surviving grandparents in equal shares, or to the survivor of them, or to their lineal descendants.
- Surviving next-of-kin, but none of the next-of-kin listed in numbers 1-8 above survive. To the next-of-kin in equal shares. Descendants of next-of-kin do not divide dead ancestor's share.
- Stepchild of the intestate or their lineal descendants surviving, but none of the next-of-kin listed in 1 to 8 above survive. To the stepchildren in equal shares; lineal descendants of dead stepchild divide stepchild's share.
- No survivors. To the State of Ohio ("escheat to the state").
In all of the above cases in which lineal descendants inherit, their respective shares are determined by representation (called, "per stirpes"). That is, their shares are determined according to their place in the family tree, and through the ancestor who "represents" them. For example, assume that: a woman died without a will (intestate); her husband died two years before she did; three of her four children are alive at her death; the child who died before she did had two children who are alive.
The estate would be divided into fourths. The woman's three surviving children would each take one-fourth and the two surviving children of the woman's deceased child-the woman's grandchildren-would share equally in their deceased parent's one-fourth. These grandchildren would each get one-eighth of the estate.
When heirs are remote, and next-of-kin inherit, there is no representation. Only the surviving next-of-kin of an equal degree of relationship to the deceased inherit. For example, if the only relatives surviving a decedent are two second cousins, plus two second cousins once removed (that is, children of a deceased second cousin), the surviving second cousin would each receive one-half of the estate. The second cousins once removed cannot inherit through their deceased parent.
Administration of Estates
The basic purposes of the administration of decedents' estates are to ensure that all of the decedent's property is identified and assembled, his debts paid, and the balance of his property distributed to those entitled to it.
Under Ohio law, all estates, both large and small, must be settled according to the standard probate procedures for administering estates. However, estates totaling $35,000 or less may be relieved from most of the formal steps of administration where the probate court is satisfied that the decedent's debts will be paid and decedent's property will be given to those entitled to it. Where the sole survivor is the decedent's spouse, estates which total $85,000 or less may be relieved from administration. Relief from administration effects substantial savings in time and court costs.
When a person dies testate, that is, having left a will, the first step in administering the estate is to probate the will (admit the will to probate). Under this procedure, the will is filed in the probate court. The court examines the document to determine if it meets the form requirements for a valid will. The probate court may determine that the will should be admitted or order the witnesses to the will to appear and testify. The witnesses could testify about the genuineness of the testator's signature, the testator's condition, etc. If the witnesses cannot be located, their signatures may be proved by other testimony. If the will is satisfactorily shown to be the last will of the deceased, it will be accepted by the court ("admitted to probate").
Following admission of the will to probate, the court appoints an executor, who is responsible for seeing that the estate is properly settled according to law. If the decedent died intestate (without a will), the court appoints an administrator (whose duties are essentially the same as an executor). Usually, a testator names (in the will) one or more persons to act as executor. Although the probate court is not bound to appoint the person named by the testator, the court will normally appoint that person named in the will if the person is qualified to act as executor and if that person is a resident of the State of Ohio.
In naming an administrator for an intestate estate, the court gives preference to relatives of the deceased. The court will probably require that an executor or administrator be a resident of the county, or at least of the state. An appointment of an executor or administrator is complete when the appointee accepts, acknowledges her duties and liabilities, and posts a bond for the faithful performance of her duties. Wills regularly contain a provision which requests the court to dispense with bond. Although not bound by such a request, the court will usually grant it. If a bond is required, the premium is paid out of the estate's assets. When the appointment is complete, the court will issue written authority to the executor or administrator to act on behalf of the estate. This authority is called "letters testamentary" when issued to an executor, and "letters of administration" when issued to an administrator.
When an executor or administrator dies, becomes ill, is otherwise unable to complete her duties, or does not properly perform her duties, she must be replaced. A successor or replacement is often named in a will. If the will does not name a successor, or if persons named in the will cannot or are not suitable to serve as executor, the court will name an "administrator, W.W.A.," or administrator with the will annexed.
The first duties of the executor or administrator are to locate all estate property, take an inventory of the property and, if necessary, have the property appraised or valued by one or more disinterested appraisers. Although professional appraisers are not required where the property is easy to value (stocks, bank accounts, etc.), their services are required when the estate includes real estate, jewelry, antiques, and other items which are difficult to value. When the inventory and appraisal is complete, it is filed with the probate court.
Most estates will include nonprobate assets. These assets include, for example: insurance policies; joint and survivorship, and pay on death bank accounts; and securities or pension plans with named beneficiaries. The fiduciary must also find these assets. The proceeds of these assets are part of the taxable estate, but generally need not be listed in the inventory filed with the court.
The executor or administrator has other duties. For example, decedent may have been involved in a lawsuit as a plaintiff or defendant when he died, or he (or the estate) may have a claim or cause of action against another party which has not been asserted, or only partially asserted. The executor or administrator must see that the pending lawsuit is carried to an appropriate conclusion. The lawsuit must be prosecuted, defended or settled. Similarly, where decedent had a claim or cause of action which was not asserted, or only partially asserted, it is the duty of the executor, or administrator, to completely assert the claim and, if necessary, to timely file a lawsuit. For example, if the deceased was killed in a traffic accident, it may be necessary to file a lawsuit to collect damages for wrongful death. It should be noted that the decedent's family would receive most of a settlement or award which results from a wrongful death case. In addition, the executor, or administrator, must pay legal debts, taxes, costs, etc. and must distribute the assets of the estate to the proper person, entity, or entities.
The executor or administrator must ascertain what, if any, debts were owed by the decedent. Creditors must present their claims against the estate within one year of the decedent's death. These claims should be sent to the executor or administrator by certified mail. Any claim not made within one year is barred forever.
Debts of the estate may include debts incurred by the decedent before his death, or debts incurred by the estate, such as utility bills, salaries and other expenses for maintaining estate assets. Some examples of common debts of an estate are hospital and funeral expenses, estate taxes, probate court costs, attorney fees, appraiser fees, and the fees the executor or administrator is allowed for his services.
Certain debts have priority. Generally, taxes, funeral expenses, and costs and expenses of administering the estate must be paid first. Usually, debts, costs, and expenses will be paid out of cash in the estate. If there is insufficient cash, it will be necessary to sell some of the estate property. Personal property will be sold first. If there is insufficient personal property, the real estate will be sold. The sale of estate property may be conducted in various ways. The sale might be a public or private sale of individual items, or it might be some form of auction. In certain situations, the probate court must grant permission to conduct a sale.
When all debts, taxes, costs, and expenses have been paid, the balance of the estate must be distributed to the proper persons-the persons named in the will or, if there is no will, those named in the statute of descent and distribution. Distribution may be in cash, or "in kind." Thus it may be necessary to sell the estate property even if a sale is not required to pay debts, taxes, costs, and expenses. In-kind distribution is the transfer of a particular thing or things to a beneficiary. For example, the will may state that the testator's daughter is to get the testator's wedding ring and silver tea service. If a sale is not necessary to obtain funds to pay debts, taxes, costs, and expenses, or to obtain the necessary cash to pay all the heirs, the executor or administrator may actually transfer the wedding ring and tea service to the daughter. Sometimes a will explicitly authorizes the executor to make distribution in kind. The executor or administrator will usually consult the heirs to determine if they want cash or the particular property.
When authorized by the probate court, partial distribution of the estate property may be made to one or more heirs before the estate is completely settled and closed. Partial distribution is often made when the property involved is such that it is undesirable for it to remain unused until the estate is settled (automobiles are often transferred under a partial distribution). Also, partial distribution is common in large estates which may remain open for some time. Partial distribution should not be made unless enough property will be left in the estate to pay debts, taxes, costs, and expenses. Finally, those who receive estate assets-personal property, real property, cash, cash developed from the sale of estate assets-must realize that in certain situations they may have to return these assets, or the value of the assets. For example, those who receive such assets (distributees) may have to return the assets, or the value of the assets, to the estate where such assets are needed to pay the share of a surviving spouse who elects to take against the will, or needed to satisfy a claim against the estate. It should be noted that distribution may be made within the one year in which creditors may make their claims. Thus, claims may be made after distribution has occurred. Under Ohio law, distributees are given notice of the possibility that the assets or the value of the assets may have to be returned.
When the estate is closed, the executor or administrator is required to file an account showing the estate assets, income, costs, expenses, and distribution. If settling the estate takes an unusually long time, the executor or administrator may be required to file one or more interim accounts, plus a final account. When the probate court approves the final account of an executor or administrator, some courts will explicitly release the executor or administrator from her duty of trust, that is, her fiduciary duties.
Other Duties of the Probate Court
Among other important duties of the probate court is commitment of the mentally ill and retarded, appointment and supervision of guardians, supervision of adoptions, and the issuance of marriage licenses.
When a person is suffering from mental illness or mental retardation and he may be dangerous to himself or others, or needs special care, he may be brought before the probate court for the purpose of committing him to a hospital or institution for care or treatment. Such a person must be examined to determine his condition. If the probate judge is satisfied that he is mentally ill or retarded and in need of institutionalization, the judge may commit the person to a public or private hospital or similar institution.
A guardian is a person appointed by the probate court to be responsible for another person, or for another person's property, or both. (The person for whom the guardian is appointed is called the "ward.") The basis for appointment of a guardian is some disability on the part of the ward in the handling of her affairs. The disability may be due to youth, advanced age, mental condition, or physical condition. A guardianship may be voluntary, that is, the guardian is appointed at the request of the ward, or it may be involuntary. A guardian is a fiduciary and is required to take charge of his ward's property and to give a periodic account of his trust (his fiduciary responsibilities) to the probate court.
Ohio now allows the probate court to appoint "limited guardians" and "conservators." A limited guardian has specific limited powers. A conservator may be appointed at the request of a competent, but physically infirm person. The court may also appoint an "interim guardian" or an "emergency guardian" in special situations. Interim and emergency guardians can serve only for short periods. Under the law, the court must take the "least restrictive alternative" in establishing the care for the ward. In other words, the court must select the least intrusive type of care that is appropriate for the ward.
Adoption is the legal assumption of the entire responsibility for rearing and caring for a minor child by an adult, or more often, by a husband and wife. Under the supervision and approval of the probate court, the child legally becomes the child of the adoptive parent or parents. The probate court evaluates the prospective parents (or parent) and determines if the proposed adoption is in the best interest of the child. If the court determines that the adoption is in the best interest of the child, it approves the adoption. A child of any age up to 18 can be adopted. (Under certain circumstances an adult can be adopted.) Adoptions occur in various factual situations; stepchildren may be adopted by their stepparents; and orphans, abandoned children, children placed for adoption by their parents, children born out of wedlock, and children whose legal relationship with their parents has been judicially terminated may be adopted.
The probate court is responsible for supervising the issuance of marriage licenses. Marriage licenses are considered in more detail in Part X, at "The Marriage License." In summary, the probate court will not issue marriage licenses to a prospective bride and groom if either: (1) is underage; (2) is under the influence of alcohol or a controlled substance at the time of application; or (3) suffers from a communicable form of syphilis. (Blood tests are not required to obtain a marriage license.) If an applicant is underage, a license can be issued if appropriate parental consent is provided and the court is satisfied that suitable counseling has been received. Where a girl is under 16 and pregnant, the juvenile court may grant permission to marry.
Articles appearing on this website are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.
Reprinted and distributed by Fanger & Associates LLC with permission from the Ohio State Bar Foundation as a service to our clients and friends.
Excerpted from The Law And You, A Handbook of General and Everyday Law Affecting Ohio Citizens. Prepared for the Ohio State Bar Association by the Ohio State Bar Foundation. Copyright © 1997-1999 Ohio State Bar Association.
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