|
What
does it mean when someone dies intestate?
When someone dies without leaving a will to spell out how his or her money and
property (called an estate) is to be distributed to survivors, that is
called dying intestate.
What
is the role of the probate court?
In each of Ohio's 88 counties, there is a division of the common pleas court called the probate division, commonly referred to as the probate
court. The primary job of the probate court is to see that all debts,
taxes and other financial affairs of people who die in that county are
resolved, and that the money and other valuable property left, after debts are
paid, are distributed to the persons legally entitled to receive them.
Who
handles the estate?
When the person who died (the decedent) leaves a will, the probate
court appoints a trusted person named in the will to serve as executor of
the estate. The executor works with the court to see that the decedent's
financial affairs are resolved and the remainder of his or her estate is
distributed according to the instructions spelled out in the will.
When
someone dies intestate, an administrator for the estate is appointed by
the probate court. Ohio law requires that the court appoint the
surviving spouse of the decedent as administrator, and if none, or if the
spouse declines, the court will appoint one of the next of kin of the
decedent. In any event, the administrator must be a resident of
Ohio. If there is no surviving spouse or next of kin resident of the
state, or if the court finds such persons to be unsuitable, some other
suitable person will be appointed as administrator.
Before
the court issues official letters of appointment naming an
administrator, the person named must sign an acceptance statement that spells
out his or her duties and acknowledges that the court can fine or remove an
administrator for failure to perform those duties faithfully. The
administrator must also post a bond (paid from the decedent's estate) to cover
potential losses that the estate might suffer through error or mishandling of
assets during the administration process.
What
are the duties of an administrator?
The duties of an administrator are similar to those of the executor of a
will, except that an administrator must follow the instructions of the probate
court and the statute of descent rather than the terms of a will. The
basic duties of an administrator are:
| 1. |
Inventory and appraisal. The
administrator must identify all financial assets and property that were
owned by the decedent at the time of death,* and file an inventory with
the probate court within three months of the administrator's
appointment, unless an extension is granted. |
|
* (Important note: Most estates
include what are known as non-probate assets which generally do
not have to be included in the inventory filed with the court. Non-probate
assets are assets that legally pass from a decedent to a named
beneficiary or to a co-owner at the time of death, without having to go
through the probate court. Non-probate assets include: insurance
policies, IRAs and pensions that are payable on death to a beneficiary;
and a home, car or bank account that the decedent owned jointly with
rights of survivorship. In many cases, the bulk of a decedent's
assets may be non-probate assets. The administrator must identify
non-probate assets for tax purposes, but these assets are not otherwise
included in the "estate" for which the administrator is
responsible. When this pamphlet refers to collecting or
distributing a decedent's assets, it refers only to those assets that
are subject to probate.) |
|
While a professional appraisal is
not required for assets the value of which is "readily
ascertainable" (for example, shares of stock in a publicly traded
company or the balance in a bank account), items such as jewelry, art
objects, antiques, real estate and any other possessions whose value
cannot be readily established must be appraised by a qualified person. |
| 2. |
Collecting assets. The
administrator must collect all assets of the decedent. This is
very important (especially to prospective heirs) because it is these
assets that will be distributed to heirs after debts and taxes have been
paid. Complications can arise in this process if assets legally
owned by a decedent are in the possession of someone else at the time of
death, or if property belonging to the decedent has been concealed or
misappropriated by a third party. Sometimes, collecting assets may
require the administrator to follow through on a lawsuit in which the
decedent was involved at the time of death, or to file a lawsuit to
complete a legal claim the decedent had not fully asserted while
alive. For example, if the deceased was killed in an accident it
may be necessary to file a suit to recover damages for wrongful death. |
| 3. |
Payment of debts and expenses.
Creditors (people to whom the decedent, or his or her estate, owe money)
have six months from the date of death to present their claims against the
estate. In
most cases, any claim not submitted within six months is barred
forever. Claims must be submitted to the administrator in
writing. In addition to ordinary bills the decedent owed at the
time of death, other debts typically include expenses to keep up
property; local, state and federal taxes; hospital and funeral expenses;
and expenses of administration, including probate court costs, bond
premiums and fees charged by appraisers, attorneys and the
administrator. |
|
Even after accepting a claim as
valid, the administrator must be certain there will be sufficient assets
to pay all claims, including those not yet presented. Certain
debts have priority. Generally, costs and expenses of administering the estate,
funeral expenses and taxes must be paid first. If
there are sufficient cash assets in the estate to pay debts, they will
be paid out of cash. If there is not enough cash, then estate
property will be sold (personal property first and then real estate if
necessary) to raise the cash needed. If the total assets in an
estate are not sufficient to pay all of the valid debts, claimants must
be paid according to a priority schedule established by law. |
| 4. |
Distribution of assets.
When all debts, taxes, costs and expenses of the estate have been paid,
the administrator must distribute the balance of the estate to the
decedent's heirs according to a strict formula spelled out in
Ohio's statute of descent and distribution. Because an
administrator may be held personally liable for an error or excess
distribution to an heir that cannot later be recovered, legal advice
should be obtained before making a final disposition of estate
assets. Sometimes an administrator will make a partial
distribution of certain assets before all claims have been
received. In such cases, it may be prudent to advise persons
receiving early partial distributions that they may be required to
return money or property to the estate if it is needed to satisfy valid
claims. |
What
is the statute of descent and distribution?
This is the state law that specifies what share of the probate assets in
an intestate estate shall be distributed to each of the decedent's heirs after
all valid claims have been paid. Generally speaking, the statute gives
strong preference to those persons most closely related to the decedent.
Following
is a partial summary of some basic guidelines in Ohio's statute of
descent and distribution:
Please
note that the following discussion uses lay person's language rather than
precise legal terms or definitions, and does not include an extensive
list of additional survivorship situations spelled out in the statute.
| * |
If a decedent is
survived by a spouse and no surviving children or lineal descendants of
deceased children, the entire estate goes to the spouse. |
| * |
If a decedent is
survived by a spouse and one or more children or their lineal
descendants, and all the children who survive or have lineal descendants
are also the children of the surviving spouse, the entire estate goes to
the surviving spouse. |
| * |
If a decedent is
survived by a spouse and one child or the child's lineal descendants and
the surviving spouse is not the natural or adoptive parent of the child,
the spouse receives the first $20,000 from the estate plus one-half the
remainder and the balance of the remainder passes to the child or the
child's lineal descendants. |
| * |
If a decedent is
survived by a spouse and more than one child or their lineal
descendants, the spouse will receive the first $60,000 if the spouse is
the natural or adoptive parent of one, but not all of the children, or
the first $20,000 if the spouse is not the natural or adoptive parent of
any of the children. The spouse will receive one-third of the
balance of the estate and the children will receive two-thirds of the
balance of the estate. Lineal descendants of a deceased child
divide that child's share. |
| * |
If there is no surviving
spouse, but surviving children or their lineal descendants, each of the
children receives an equal share of the estate. Lineal descendants
of a deceased child divide that child's share. |
| * |
If the decedent has no
surviving spouse or children and no lineal descendants of deceased
children, the estate goes to his or her surviving parent(s) or, if both
parents have died, in equal shares to brothers and sisters or their
lineal descendants. |
The
statute goes on at considerable length to cover other possible survivorship
situations not covered in this summary. Readers of this pamphlet are
urged to consult an attorney for clarification of this information, and to
seek professional advice before taking any legal action related to
administration of an estate.
What
is an administrator's account?
Within six months after his or her appointment, every administrator of an
estate is required to file a report called a final and distributive
account with the probate court. In certain circumstances, such as
when an Ohio or federal estate tax return is due, an account is due not later
than 13 months after appointment and once a year thereafter. This
account must include an itemized statement of all receipts, disbursements and
distributions made by the administrator during the reporting period.
When the administrator files the final and distributive account with
the court, the administrator is released from his or her duties.
What
are characteristics of an effective administrator?
One of the keys to being an effective administrator is to be highly
organized. In the administration of a decedent's estate, it is essential
to keep very careful records and to carry out all procedures required by the
probate court in an orderly manner. It is also important to maintain a
positive relationship with the decedent's heirs. This is especially true
when the administrator is one of several surviving relatives of the
decedent. An administrator will encounter far fewer problems and
complications if he or she keeps all the decedent's heirs informed of what is
going on and treats them as equals.
Who
should assist the administrator?
Serving as an administrator involves serious legal responsibilities, and
can expose you to financial liability if claims and assets are not properly
handled. If you are appointed to serve as administrator of an estate, do
not rely on casual advice from friends and family members regarding your
duties to the court and the decedent's heirs. A lawyer can provide you
with trained legal advice and professional judgment regarding the complicated
laws involved, to help you avoid pitfalls and make the proper decisions.
The
information contained in this pamphlet is general and should not be applied to
specific legal problems without first consulting your own attorney.
(Updated
10/01/2004)
|
