Estate administration is the process by which a person’s assets are collected, maintained, and distributed among creditors, heirs and beneficiaries according to the person’s Will and the laws of Ohio. Perhaps the single most important aspect of estate administration is the distinction between probate versus non-probate property.
When an individual dies, some of the person’s property may be transferred by trust, joint and survivorship property, payable on death accounts, transfer on death property, and to beneficiaries named under life insurance and retirement benefits. These types of assets are non-probate property. The transfer of these types of assets is accomplished outside of probate, and the decedent’s Will has no impact on non-probate property.
Other property may be titled solely in the decedent’s name. These assets would be considered probate property. The transfer of probate property is accomplished through proceedings in probate court. Most estates consist of both probate and non-probate property.
The following points result from this distinction between probate versus non-probate property:
- Spousal rights only apply to probate property;
- The decedent’s unsecured debt (for example, credit card debt), can only be collected out of probate assets;
- The family allowance can only be collected out of probate property; and
- Probate proceedings are a public record; non-probate transfers remain private.
Estate administration involving probate property begins by any interested person filing an application to administer the estate in the probate court of the county in which the decedent lived. The court will appoint an estate representative, known as a fiduciary. The fiduciary is responsible for administering the decedent’s estate and accounting to the court for that administration. The fiduciary’s duties will include collecting the assets of the decedent, paying all legal obligations and debts of the decedent, and distributing the remaining assets to those persons entitled to inherit. A bond may be required of the fiduciary in order to protect the beneficiaries and creditors of the estate, and to insure proper administration of the estate’s probate assets.
Here a properly drafted and executed Will is beneficial and will allow the estate to be administered more efficiently. A fiduciary appointed under a Will is known as an “Executor” (outside of a will, the fiduciary is known as an “Administrator”), and the decedent’s Will may waive the requirement of bond for the person nominated as executor. The waiver of bond alone can result in considerable savings for the estate. Also, once appointed and authorized to serve by the probate court, the person nominated as executor may utilize the powers granted to the executor under the decedent’s Will. These “powers” granted to the executor under the Will makes the executor’s job easier, and once again this will result in considerable savings for the estate.
Due to the complexity of the laws involved with estate administration, and to avoid costly errors, please contact me for representation and guidance with estate administration.