Probate is the process by which a decedent’s property is transferred either under a Will or under the statute of descent and distribution by the Probate Court in the County where the individual dies. An ancillary probate court may be necessary if the decedent has property outside of such county. If you leave a Will, then you will generally want to appoint an executor to administer your assets passing under the Will. If you die intestate (without a Will) or without appointing an executor, then the Court will appoint an Administrator to administer your estate.
The costs of probate very in relation to the size and complexity of the estate, but there are almost always going to be filing costs and attorney’s fees that will be paid by the estate. Estates under $25,000.00 are exempt from probate, but the appropriate forms must be filed to qualify for the exemption. Attorneys who probate the Will and assets transferring under it, will be one of the first creditors to be paid and will receive compensation based on the size of the estate and the services provided, subject to the approval of the Probate Court.
The purpose of Probate is to ensure that the estate is properly managed, debts are paid and collected, taxes paid, and property is distributed as the decedent intended. Because of this oversight, one of the benefits of Probate is that it is more likely that the assets you leave are transferred according to your wishes. Property passing under a trust does not have such oversight.
The probate process generally takes 4-6 months if no federal estate taxes are owed, but may take a year or longer if federal taxes are owed. If litigation over the estate or with creditors or debtors of the estate ensues, the probate process could last two or three years before distribution can be safely made to beneficiaries.
Delays generally occur because the Administrator or Executor must be certain he has paid creditors prior to making distributions to beneficiaries. In Ohio, the Administrator or Executor is personally liable to creditors of the estate if he fails to pay and distribute the property to creditors that have filed claims with the Executor or Administrator against the Estate. There are, however, a couple of safeguard provisions to protect the Executor and Administrator from liability from unknown creditors. Ohio law provides a six-month time frame starting at the date of death of the decedent from which general (non-tax related) creditors must bring claims or forever be barred. It also allows the representative to give notice to creditors that they have 30 days to bring a claim or be barred. However, no such time-frames bar the government from collecting taxes owed; consequently, the Administrator or Executor generally will want a tax release before making distributions to beneficiaries in order to protect him or herself from personal liability if it is deteremined there are any deficiencies.
In small estates, the cost of probate may be fairly low and the time spent with the Probate Court minimal. Consult an attorney to help you determine if you should consider probate-avoiding techniques.