What is Probate?
Important considerations and why everyone should have a will...
While many clients come to the office stating their intention to “avoid probate,” a lot of those same people are not really sure what probate is. The simple answer is that probate in Ohio is a court supervised process to administer certain property owned by the deceased. We call the property that requires probate administration “probate property.” The probate process involves identifying and protecting probate assets of the deceased, receiving and evaluating the validity of creditor claims, making sure taxes and expenses are properly handled and distributing remaining assets to those entitled to receive them.
Probate vs. Non-Probate Property
The manner in which property passes upon one’s death depends upon how the property is owned. Property may be owned in a way in which it passes automatically to another though a beneficiary designation. That could be in the form of a payable on death (POD) or transfer on death (TOD) beneficiary, for example. We would describe such property as “non-probate” property. You could also own property jointly with a right of survivorship, which means the survivor automatically becomes the owner of the whole or you could own property in a trust (also non-probate).
For property that is not owned to automatically transfer the decedent’s interest to another, the probate court process is typically needed to order the transfer to the appropriate party. We would describe that property as “probate property.” Probate property requires the authority of the probate court to transfer the decedent’s interest in the property to another. In addition to adding some administrative process to the transfer of assets, the probate process is an open one through which privacy is somewhat lost. The transfer of assets through the probate process is guided by one’s Will or, if one has no Will, by the inheritance laws of the state of Ohio.
What is involved in the Probate Process
The steps in the probate process vary depending upon who has survived the decedent, the assets in the particular estate, whether a Will exists, and other factors. The full administration of a decedent’s estate is a process that in Ohio can involve the following steps and even more in some situations:
- Identify names, addresses, ages and degree of relationship of all heirs
- Identify the names, addresses and ages of all vested beneficiaries in the decedent’s Last Will and Testament, if any
- Apply for authority to Administer Estate (Appointment of an Executor or Administrator)
- Probate the decedent's Last Will and Testament, if any
- Serve notice of the admission of the will on all required persons or obtain waivers from all required persons
- Notify surviving spouse of his or her rights under Ohio law
- When there is a Will, file a Certificate of Service of Notice of Probate of Will form with the Court within two (2) months of Executor/Administrator’s appointment
- Gather the probate assets and determine their value (appraiser needed?)
- Invest the assets of the probate estate as allowed and required by Ohio law
- File an Inventory within three (3) months of Executor/Administrator’s appointment
- Receive any claim for outstanding debts of the decedent, pay valid debts and dispute questionable debts
- File and possibly pay income taxes required for the decedent and/or the decedent's estate
- File and pay any estate taxes required of the decedent's estate
- Distribute any remaining assets to the persons entitled to receive these assets under Ohio law or the terms of the decedent's Will
- File a final distributive account or certificate of termination to close out the probate estate within six (6) months of the appointment of the fiduciary or extended period permitted by the court.
ARTICLE: I always hear you should avoid probate... Why is that?