Frequently Asked Questions About Probate Administration:
Q: What is Probate Administration?
A: Probate Court also administers estates where there was no Will at all. In those cases all decisions about the assets, debts, and who will be able to take from the estate and who is an heir is all determined by the court.
Q: After the death of my spouse or family member, what do I need to do first?
A:
- The first steps that are taken after a death of a loved one are as follows:
- Notify family members, friends, church and next of kin.
- Meet with the funeral home to make the necessary funeral arrangements.
- Locate the Will to determine who is listed as the executor of the estate and whether any funeral instructions have been included in the Will or attached to the Will.
- Consider what immediate sources of funds are available so that you can pay bills for the first thirty (30) days until an estate plan can be established..
Q: What are the steps of Probate?
A:
- The steps of Probate are:
- File the Will with the Court.
- Send notice of the filing of the Will to all persons listed in the Will and those who would inherit if the Will were invalid.
- Have the executor appointed - obtain Letters of Authority.
- Appraise and value the assets.
- File an inventory listing the assets in the probate estate.
- Send notice of the filing of the inventory to the heirs.
- Have a hearing if any beneficiary’s object to the inventory.
- Resolve Will contest, if any.
- Resolve creditor claims, if any.
- File estate tax returns.
- Transfer assets to the beneficiary in the Will.
- File a final account showing all distributions from the estate..
Q:I have a power of attorney, can I still use it?
A:No, when a person dies, the power of attorney terminates. The attorney-in-fact has no legal authority to transact business on behalf of the decedent. Once the Will is admitted to probate, the executor has the legal authority to act for the estate.
Q: How do I find an attorney?
A: Usually the attorney who prepared the Will is the person who would be the attorney to administer the estate. However, some attorneys who prepare Wills do not do probate or estate administration. Furthermore, attorneys retire, move, or die. You should look for an attorney who practices in the area of estate planning and probate. The Executor is free to hire whomever they want.
Q: What happens if there is no Will?
A: State law determines where the assets are distributed. The Court will appoint a person (usually a family member) to be the administrator of the estate.
Q: Will the estate go through probate?
A: Whether an estate goes through probate or not, depends on how the decedent held assets and what types of assets were owned at the time of death. Certain assets have to go through probate, other assets do not. The assets that avoid probate are as follows:
- Jointly held property with right of survivorship;
- Life insurance and annuities;
- Retirement plans, IRAs and pensions;
- Assets in Trust at the time of someone's death (Living Trust);
- Payable on Death (POD) and Transfer on Death (TOD) accounts.
Q: Will I have access to assets during the probate administration?
A: Estate assets are available to pay all bills, debts, claims and expenses of the decedent. Assets like real estate may be sold. Partial distributions can be made to beneficiaries after the will contest period expires (three months). Final distributions can be made after the estate taxes are filed (nine months) and creditors claims expire (one year).
Q:What happens if the decedent owned real estate in another state?
A:In addition to a probate administration in this state, an ancillary administration will occur in the other state to clear title so that the real estate can be transferred to the beneficiaries in the will.
Q: What is the role of the executor?
A: An executor (administrator if no Will) in an estate is the person who is responsible for the complete administration of the estate. They must identify and evaluate the assets, they must identify and pay all liabilities, are responsible for selling the assets that need to be sold, and are responsible for signing the final income tax and estate tax returns. Finally, the executor distributes the assets in accordance with the terms of the Will or State law if there is no Will.
Q: What does an executor get paid?
A: The court will estimate payment based on hours worked to close the estate.
Q: Will the estate have to pay estate tax?
A: Again, this depends on the size and nature of the estate plan. If everything is left to a surviving spouse, there is no estate tax because of an unlimited marital deduction. Estate tax returns must be filed even though no tax is due. If assets are left to anybody other than a surviving spouse, estate taxes are paid in Ohio for estates larger than $200,000 (2001) and $338,000 (2002); estate taxes are paid to the federal government if the estate exceeds $1,000,000 in 2002 and 2003.
Q: When is an income tax return due for the decedent?
A: An income tax return is prepared for the decedent for the period beginning January 1 through the date of death. All income received during this period is reported on the final income tax return which is due on April 15 of the next year. If you are the surviving spouse, your are still entitled to file a joint income tax return even though your spouse died during the year. All income earned after the date of death is reported on the income tax return for the estate.
Q: How do I locate assets?
A: The executor will typically locate assets by going through the decedent's personal records and mail, a review of the past two years income tax returns, and a review of canceled checks for the past year. You can also locate assets by talking to the decedent's accountant, financial planner, stockbroker, or attorney who may be familiar with the decedent's financial affairs.
Q: How are assets valued?
A: All assets owned by the decedent as of the date of death are valued at fair market value. Therefore, many assets like real estate, closely held family businesses, apartment buildings, and collections need to be appraised by a professional appraiser. Stocks and bonds are evaluated by looking at the stock market on the date of death. Bank accounts and certificates of deposit are determined by looking at the balance as of the date of death.
Q: How is life insurance collected?
A: Life insurance is collected by contacting the insurance company who held the life insurance policy. The insurance company will send you a claim form, which would need to be filled out and signed by the executor or surviving beneficiary. They also request that you return the insurance policy and a certified copy of the death certificate.
Q: Am I entitled to any benefits from my spouse's employer?
A: Frequently, employers will have death benefits as part of a retirement package. Additionally, insurance, health plans and dental plans can sometimes be continued. You need to contact the decedent's employer to determine what benefits might be available to you.
Q: Am I entitled to social security benefits?
A: A surviving spouse or dependent child may be entitled to social security. The executor needs to contact the Social Security Administration to stop social security payments and to determine the rights of the spouse and minor children.
Q: How are retirement benefits and IRAs collected and are they taxable?
A: Retirement benefits and IRAs are not part of the probate estate. They are paid directly to the named beneficiary outside of probate. They are subject to both estate taxes and income taxes. Because the beneficiary may be entitled to delay the payment of income tax, it is extremely important to consult with your attorney before you withdraw any money from the retirement account or IRA.
Q: What are the costs and fees associated with a probate administration?
A: The actual costs and fees will depend upon the size of the estate, the nature of your assets, and the attorney that you retain to represent the estate. Additional issues may arise that could increase the cost of administration, including Will contest, estate tax audits, or the transfer of difficult assets such as closely held family businesses. Attorneys charge an hourly rate typically about $125 - $350 per hour. You should ask the attorney how he/she charges and for an estimate of the cost.