Frequently
Asked Question for Estate Administration
The following are common questions
that have often been posed to our office:
What is Estate Administration?
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- When an individual dies, certain assets of
the decedent (non-probate) may be transferred by contract, such
as joint and survivorship property or payable on death accounts.
Other assets (probate) may be transferred through proceedings
in Probate Court. Most persons die owning both probate and non-probate
assets, all of which generally require some type of documentation
to complete the transfer. There are advantages and disadvantages
in using non-probate or probate proceedings. It is prudent to
consult an attorney to determine the best manner in which to hold
one's assets.
- It is the Probate Court's responsibility to
ensure the probate assets are collected, maintained, and distributed
among the decedent's heirs, beneficiaries, and/or creditors according
to the direction of the decedent as expressed through a will and
if there is no will, through the laws of Ohio. This process is
known as the administration of a decedent's estate.
How Soon Should The
Estate Be Opened? back to top
- There is no statutory time limit for opening
an estate after the death of the decedent. The estate should be
opened within a reasonable time and as soon as practicable, especially
where there are debts to be paid. If an estate is not timely opened,
any interested person, including creditors of the estate, may
apply to be appointed to administer the estate.
Who Administers The
Estate? back to top
- Once the Probate Court is notified of the decedent's
death, and receives the proper documents, the Probate Court appoints
and issues Letters of Authority to a suitable and qualified fiduciary.
The fiduciary is appointed according to the decedent's Will, or
if there is no Will, by statutory guidelines. A bond may be required
of the fiduciary to protect the beneficiaries and creditors of
the estate and to ensure proper administration.
- If the decedent died with a Will the fiduciary
is called the Executor and if the decedent died without a Will,
the fiduciary is called the Administrator. A fiduciary, even though
named in the Will, has no authority to administer the estate,
until the Probate Court makes the appointment and issues the Letters
of Authority.
- Once appointed by the Probate Court, it becomes
the responsibility of the fiduciary to administer the decedent's
estate and to account to the Probate Court for the administration.
A fiduciary that fails to perform his or her duties is subject
to removal by the Probate Court.
What Are The Duties
Of The Fiduciary? back to top
- The fiduciary (whether an Executor or an Administrator)
may be an individual or a bank having trust powers.
- The fiduciary's duties are:
- To determine the names, ages, and degree
of relationship of heirs;
- To take possession of, and conserve all of
the real and person property of the decedent;
- To have all property appraised where the
value is not readily ascertainable;
- To file with the Probate Court, within three
months of the appointment, an Inventory of all the assets held
in the name of the decedent;
- To receive and determine the validity of
all claims against the decedent's estate;
- To timely file all tax returns and to pay
income and estate taxes, if any;
- To make distribution of the estate's assets
to the proper beneficiaries, and
- To file an account with the Probate Court
of all receipts and disbursements made by the fiduciary
Does A Fiduciary Need
An Attorney? back to top
- Due to the complexity of the law and the legal
process that is involved in estate administration, the Probate
Court strongly recommends that all fiduciaries seek legal counsel.
Good legal advice and guidance can expedite the probate process,
prevent costly errors, and insure that the fiduciary is not cited
by the Probate Court for the failure to properly perform his or
her duties, or sued by beneficiaries for malfeasance.
Who Can Practice Law
In The Probate Court? back to top
- By law, legal practice in the Probate Court
is restricted to attorneys who are licensed by the Supreme Court
of Ohio. If an individual wishes to handle his or her own case,
that person may do so, however, such person may not represent
others. Due to the complexity of the law and the desire to avoid
costly errors, an attorney represents most individuals who have
matters before the Court. Deputy Clerks are prohibited by statute
from practicing law, which includes giving legal advice, instructions
on which forms are required or how to fill out forms.
How Are Attorney Fees
Determined? back to top
- There is no minimum or maximum attorney fee
for the administration of an estate. Attorney fees are not to
be paid until the attorney has prepared the final account for
filing, and until our unless the Probate Court authorizes it by
application adn order, or consents; see our local rules on fees
for computations as well as the fee
calculator on this web site.
How Are Fiduciary Fees
Determined? back to top
- Ohio law sets forth fees that are permitted
for a fiduciary of an estate. The statutory fees are:
- 4% of the first $100,000 of personal property
and proceeds of real property sold;
- 3% of the next $300,000;
- 2% of the balance;
- 1% on the value of real property not sold;
- 1% of all property that is not subject to probate
administration and that is includable for purposes of computing
the Ohio estate tax, except joint and survivorship property.
- The fiduciary may waive the fee. When a fee
is taken it must be included on the fiduciary's personal income
tax return as income.
How Long Should It
Take To Administrate An Estate? back to top
- The majority of estates for decedents with
a date of death 01/01/2002 and after should be finalized within
6 months of the date of the appointment of the fiduciary. However,
where there is family, creditor or tax disputes or other similar
litigation, the estate administration may take longer to conclude.
What Are The Steps
In A Full Administration? back to top
- All estates are not alike, and can differ for
a number of reasons. An estate may be testate (with a Will) or
intestate (without a Will). The nature, and ownership of assets
can vary and so too does the procedure for transferring those
assets. Next of kin vary and so do very important notice requirements.
Sometimes the fiduciary must address issues of spousal rights
or even issues of insolvency where the estate's debts exceed the
estate's assets.
- Because of these differences each estate is
treated differently. As a general matter, the basic steps of administering
an estate pursuant to Ohio law is as follows:
- Application for authority to admit the Will
to probate, if one exists, and for authority to administer the
estate;
- Appointment of a fiduciary; Gathering assets
and obtaining appraisals as required;
- Filing an Inventory in a timely manner;
- Determining debts, the sufficiency of assets
and the payment of creditors;
- Timely filing of income tax returns, the
Ohio Estate Tax return and the payment of taxes, if any;
- Distribution of assets to beneficiaries;
- Closing the estate by timely filing a final
account or certificate of termination.
What Property Must
Be Appraised? back to top
Property must be appraised if the value is not
readily ascertainable. Examples of such property would be real estate,
motor vehicles, household furniture, closely held corporations,
and partnerships. The appraiser must be a suitable, qualified and
disinterested.
What If There Is No
Will? back to top
If the decedent had no Will, the estate is generally
administered in a similar manner as if a Will had been probated.
In completing the estate administration, the decedent's property
is distributed according to the Statute of Descent and Distribution.
If the next of kin are unknown, the filing of a civil action to
determine heirship may be required.
Does A Will Have To
Be Presented To The Court? back to top
A Will should be presented to the Probate Court
as soon as practical after the death of the decedent, even if there
are no known probate assets. A person who withholds a Will intentionally,
negligently, or without reasonable cause may lose their right to
inherit. An action may be filed to require the production of the
Will any time after the death of the decedent, and failure to produce
a Will upon Court Order may result in a fine and/or incarceration
through contempt proceedings.
What If The Will Is
Unclear? back to top
If the Will is unclear, a civil action to construe
the Will may be filed in the Probate Court. The Probate Court will
hold a hearing to determine the intent of the Testator, who made
the Will.
May A Person Object
To The Will? back to top
Any interested party may file a civil action to
contest the validity of a Will. That party must establish, by clear
and convincing evidence, the Testator was mentally incompetent to
write a Will or was subject to undue influence in the preparation
of the Will. A Will contest must be filed within three (3) months
after the filing of a Certificate that all interested parties were
given notice or waived notice of the admission of the will to probate
for decedents who die on or after 01/01/2002, and no more than four
(4) months after the filing of the certificate for decedents who
die before 01/01/2002.
What is Survivorship
Tenancy? back to top
Two or more persons in survivorship form may own
real estate, so that upon the death of any one of them, the title
of the deceased person would pass to the survivor or survivors.
Title may be transferred without court proceedings by filing an
affidavit and death certificate with the County Auditor and Recorder.
What is Joint and
Survivorship Property? back to top
Joint and survivorship property is property held
by two or more persons jointly; each party having equal rights of
possession and income. On the death of one joint tenant, that interest
transfers to the benefit of the survivor or the survivors in equal
shares, without court proceedings. One joint tenant can sever the
joint tenancy by conveying that interest to a third party.
Joint and survivorship ownership may be useful
in certain situations. However, court proceedings may be necessary
to transfer clear title to the assets and to determine Ohio estate
taxes. Tax consequences can be detrimental to the beneficiaries
if joint and survivorship ownership is used imprudently.
What Costs Are Involved
In Probating An Estate? back to top
The costs involved in probating an estate are court costs, executor
or administrator fees, attorney fees, and taxes.
Court costs are established by statute. The total
costs for administering an estate will vary depending on the type
of actions and pleadings that are filed. To open an estate there
is an initial minimum deposit required of $130.00. Court costs for
an average estate are usually less than $200.00.
May Funds Be Withdrawn
From Bank Accounts? back to top
Accounts registered in the decedent's name may
only be withdrawn by a Court appointed fiduciary or by Court Order.
Joint and Survivorship and payable on death accounts
may be withdrawn by the survivor. In such accounts, the survivor
or survivors can remove 75% of the date of death amount, but the
balance may only be removed upon presentation of a valid tax release.
Tax releases are obtained from the County Auditor whose office is
located on the Third Floor of the County Annex Building at 129 E.
Court Street, across from the Courthouse.
No tax release is necessary if the account is
joint and survivorship with the surviving spouse and the account
is less than $5,000, or joint and survivorship with a person other
than the surviving spouse and is less than $2,500.
May Items Be Removed
From A Safe Deposit Box? back to top
The contents of a safe deposit box may be released
to a properly authorized representative of the estate. A deed to
a burial lot and insurance policies may be released to the proper
parties.
Does Reducing Probate
Assets Reduce Estate Taxes? back to top
It is a common misconception that only probate
assets are subject to estate taxes. Non-probate assets such as joint
and survivorship assets and trust assets must also be included in
the decedent's Ohio Estate Tax return. In the Ohio Estate Tax return,
certain items may be deducted such as debts, administration expenses,
and charitable gifts. In addition, other deductions and exemptions
may be available that would also reduce the tax due.
Avoiding probate does not mean avoiding estate
taxes.
What are the Ohio
Estate Tax Rates? back to top
| If the
taxable estate is: |
The
tax shall be: |
|
Not over $40,000 |
2%
of the taxable estate |
| Over $40,000 |
$800 plus 3% of the
excess over $40,000 but not over $100,000 |
|
Over $100,000 |
$2,600
plus 4% of the excess over $100,000 but not over $200,000 |
| Over $200,000 |
$6,600 plus 5% of the
excess over $200,000 but not over $300,000 |
|
Over $300,000 |
$11,600 plus 6% of the
excess over $300,000 but not over $500,000 |
| Over $500,000 |
$23,600 plus 7% of
the excess over $500,000 |
A credit is allowed against the Ohio Estate Tax
that is imposed, as follows:
- $500 for persons dying on or after July 1,
1968, but before January 1, 2001;
- $6,600 for persons dying on or after January
1, 2001, but before January 1, 2002;
- $13,900 for persons dying on or after January
1, 2002
What Is A Release
From Administration? back to top
For dates of death on or after March 18, 1999,
if the decedent's creditors will not be prejudiced and the probate
estate consists of property of a gross value of $35,000, or less,
the estate may be released from administration. When the surviving
spouse is the sole beneficiary, and the probate estate consists
of property of a gross value of $100,000, or less, the estate may
be released from administration.
A release from administration is less complicated
and may be completed more quickly than a full administration. If
the estate asset is real property, however, you should consult with
an attorney to avoid any costly errors.
Click here
to access Forms for a Release From Administration
What Is A Summary
Release From Administration? back to top
For decedents dying on or after August 28, 2000,
there is an estate administration procedure called a "Summary
Release from Administration".
This procedure is available if the estate assets
do not exceed $42,000, and the applicant is the decedent's surviving
spouse, who has paid the funeral bill or is obligated to do so,
and who is also entitled to the entire allowance for support.
This procedure is also available where the applicant
is not the surviving spouse, has paid or is obligated in writing
to pay the decedent's funeral and burial expenses, and the value
of the estate assets is the lesser of: $2,000 or the amount of the
decedent's funeral and burial expenses.
Is There A Procedure
For An Estate That Is Less Than $2,000.00? back
to top
Yes. Where the estate assets are less than $2,000.00,
and are equal to or less than the funeral bill, the Probate Court
can order the transfer of those assets to the person who paid or
is obligated to pay the decedent's funeral bill. If the applicant
is not the decedent's surviving spouse, and the estate asset is
a motor vehicle, then the applicant must also obtain the consent
of the surviving spouse.
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