What is Probate?

What is Probate?

Module 2

Probate Court, or “probate” is a specialized court. It primarily deals with the property and debts of individuals that pass away. Probate courts are state courts, meaning that each state runs their own separate system. In Ohio, Probate Court is a division of the Court of Common Pleas. Each county elects a probate court judge to a six-year term. In smaller counties, these judges also act as judges for juvenile court. In many instances, probate court judges hire magistrates to assist with their caseload. A magistrate often deals with the day-to-day matters for each case.

The law involved in Probate Court.

Like all other court systems in Ohio, individuals in probate court have a right to legal counsel. Unlike criminal cases, however, there is not an absolute right to appointed counsel. Because of this, people often hire attorneys to act on their behalf. These attorneys help guide clients through the process. Without a lawyer, individuals must juggle several sources of law at the same time in probate court. The Ohio Revised Code is the source for the laws that outline the rights and requirements of everyone in court. Specifically, Chapter 21 of the Ohio Revised Code deals with probate court. The Ohio Rules of Superintendence guide this implementation of rules. Meanwhile, Ohio Rules of Civil Procedure provide requirements needed for each party when it comes to process. Ohio case law shows the interpretation of legal sources. Finally, each court enforces its own local rules and customs.

Lesson Takeaways:

  1. Probate Court involves several sources of law that intersect each other.

  2. An attorney can help in assisting the navigation of this process.

Exclusive Probate Court Matters

Probate court exclusively hears certain case categories.  Only probate courts can determine whether a will is valid and properly executed. Other family members can contest wills in probate court. Courts also construe what valid wills mean.

There are several ways to settle a deceased’s estate. The most complex and time-consuming way involves fully administering an estate. If an estate is smaller without any complicated issues, the court could grant relief from administration or summary relief from administration. In order to do so, the estates must qualify.

Notices

Probate courts control if estates send out proper notices to the next of kin when someone passes away. Probate also directs the settling of accounts for estates. In settling the affairs of an estate, probate courts can authorize the sale of property as well as authorize the completion of real property contracts.

Ultimately, there are individuals required to do the legwork when it comes to handling the deceased’s estate. These people are called fiduciaries. Probate court directs and controls their conduct. The probate court also determines whether they should serve with or without a bond.

Probate courts appoint attorneys to administer estates when nobody else can be found. If there are more debts owed than assets in existence, the estate is insolvent. When this happens, courts can appoint someone to settle the affairs of an insolvent estate.

While most people view trusts as a way to avoid “probate,” probate court does handle matters associated with them. This includes assigning, appointing, and qualifying testamentary trustees. Probate can also control trustee their conduct. When it is appropriate, probate courts terminate testamentary trusts.

 Lesson Takeaways:

  1. Probate Court is the only court that hears cases involving the settling of a deceased’s estate.

  2. Minimizing assets in probate court may reduce the cost associated with finalizing an estate.

Other Probate Matters

Probate courts deal with a number of other matters beyond settling property affairs. This includes guardianships over incompetent individuals, granting marriage licenses, and managing powers of attorney. When an individual is missing, a probate court can presume death. Probate court finalizes adoption processes in Ohio. Like matters associated with estates, these processes, in part, involve forms. The probate courts make these forms available to the public. Moreover, a probate court can order human remains to be exhumed and reinterred.

Lesson Takeaways:

  1. Probate Court also is the only court that hears disputes involving guardianships, manages adoptions and marriage licenses.

  2. Only probate court can presume a death and deal with moving human remains of those buried.

Issues that can involve probate court.

Probate courts must hear all matters involving estates. However, there are several situations where matters involving assets can either be heard in probate court or in the court of common pleas. Because of this, matters can be transferred to an from probate court.

Probate courts or the general division of common pleas courts can both hear matters involving living trusts. This can include the interpretation of a trust created while someone was alive. Litigation involving living trusts also involves the duties trustees have to beneficiaries. Moreover, probate court may determine the validity of a living trust.

Beneficiaries

Depending on how beneficiaries are designated, life insurance may or may not be a probate asset. However, both probate and common pleas may hear cases on the removal of a life insurance beneficiary. When spouses divorce, each spouse is considered to predecease each other. When this occurs, it is still important for policyholders to update their beneficiaries to avoid the policies from defaulting into a countable probate asset.

Another way of simplifying matters involving the probate estate involve is to transfer property on death or payable on death. Like matters involving life insurance beneficiaries, litigation involving these matters may occur either in common pleas court or probate court. This is the  same for matters involving property in the form of joint with rights of survivorship.

Lesson Takeaways:

  1. An individual has the choice of filing a case in either common pleas court or probate court on issues involving:

    1. Living trusts

    2. Insurance beneficiaries

    3. Property that is transferred or payable on death.

  2. These matters may be transferred to and from common pleas courts depending on what is most appropriate.

Do I need a will in probate court?

Not every American has a will. Probate courts do not require wills, but they make the process easier. Because of this, the process of administering an estate is a bit different if there is a valid will. When someone passes away without a will, it is often referred to as dying intestate.

A will should outline who gets the property of the deceased after death. The court will look at the will when this occurs. They then help ensure that those individuals obtain the property that is theirs under the will. When an individual passes away intestate, the role of probate court is a bit different. Instead of going by the will, the probate court will ensure that the laws of descent and distribution are followed. The laws of descent and distribution dictate who gets a share of the estate after expenses are paid.

Complicating factors

Unless a will states otherwise or if there are complicating factors such as a prenuptial agreement, the probate process can be simplified a bit if there is a surviving spouse. In most instances, a surviving spouse likely inherits most of the property of the deceased. Outside of this situations, surviving spouses have additional rights beyond what may be indicated in the will.

If a spouse is omitted from a will either purposefully or because the will is old, the surviving spouse can elect to take against the will. This means the spouse can choose to obtain a portion of the estate and make elections. These include a continued right to reside in the marital residence for an additional period of time. In preserving these elections, issues may arise concerning the will or other assets that can lead to additionally protracted disputes.

Lesson Takeaways:

  1. You do not need a will to open an estate. All estates must present existing valid wills.

  2. If there are legal defects to a will, it may be contested by an individual who has a legal right to challenge the will under Ohio law.

  3. If there is no will, the Ohio laws of descent and distribution will dictate who gets what in an estate.

Before you begin administration

It is helpful for the administrator to gather several pieces of information before opening a probate court case. This includes gathering contact information for the next of kin or beneficiaries named in the will. After that, they may want to open a bank account for the estate of the deceased. This makes all the transactions easy to track. After this, administrators should hire appraisers for property and relators to ensure a professional process.

Lesson Takeaway:

  1. Gathering important documents and information ahead of time can reduce legal fees and make the process easier for all those involved.

Applying for Authority to Administer the Estate

Just because you are the individual that first opened the estate does not necessarily mean that you will be the one acting as the administrator. The person applying to administer must fill out forms that include an estimate of the total value of the estate. Along with this, there must be disclosure of whether the applicant owes funds to or is owed funds by the estate.

If the person applying to administer the estate is neither listed as the administrator in the will or is the next of kin, there will be a hearing as to whether that person should be appointed by the court. Likewise, if someone other than the next of kin or spouse is named in the will as the administrator, these individuals must waive their right to serve in this position. If there is no objection at this hearing, then the person will likely be approved. At this point, the applicant may have to post a bond to serve as a fiduciary. This bond must be twice the value of the estate. When the person serving as the administrator is appointed, the court provides letters of authority outlining their right to administer the estate.

Lesson Takeaways:

  1. Anyone can try to open an estate. However, other individuals such as family members and spouses must approve or waive their own right to administer the estate.

  2. A bond may be required to administer an estate; particularly if there is not a will indicating that the fiduciary serve without bond.

Administering the probate estate.

An estate of a deceased individual can be resolved in one of three ways in Probate Court. The requirements and timelines for each are unique and based on the value of the estate. One should always try to qualify for the least complex and fastest way possible.

Summary Relief

For small estates, an executor or administrator may be able to qualify for summary relief from administration.  This is the fast and least complex. You can qualify for summary relief if the person passing away is single with less than $5,000 or married with $45,000. The person applying must be responsible for the funeral bill.

Relief

Estates that are a bit larger than those qualifying for summary relief, may still qualify for relief from administration. Relief from administration is a bit more complex. However, it does not require an inventory of all the assets. Estates can qualify if the deceased is single with less than $35,000 in assets or married with less than $100,000.

Full Administration

A full administration is the most complex and time-intensive. The probate code provides rules for inventories of assets and accounting. It is highly recommended that an individual administering a full estate understand the process and necessary steps. Because of this, it is not uncommon for them to hire an attorney.

Lesson Takeaways:

  1. There are three ways to probate an estate depending on the value of the assets involved.

  2. Summary relief from administration is the fastest and easiest, followed by relief from administration and then full administration.

  3. You should review whether an estate qualifies for summary relief or relief.

Wills, Court Costs, Notice of Death

When there is a full administration of an estate, the person opening the estate must collect several documents at the start. If there is a will, the estate files the original. Additionally, the estate files evidence of death. This can be an obituary, a funeral notice, or anything else the county probate court finds sufficient under their local rules. Filing fees must also be paid when the case is first opened.

Lesson Takeaways:

  1. When you are ready to open an estate, gather the following:

    1. The will (if applicable)

    2. Evidence of death

    3. Filing fees

  2. Check the local rules for what is sufficient “evidence of death.” This may be an obituary, death certificate, or funeral bill.

Next of Kin

After one collects the will, the filing fee, and the notice of death, an individual must begin the steps needed to notify people regarding the estate. This is done by providing the list of the required people to the court. Specifically, the surviving spouse needs to be notified. In addition to the surviving spouse, the next of kin, legatees, and devisees must be notified.

Lesson Takeaways:

  1. All people listed in the will and all next of kin must be notified.

  2. For a list of who qualifies as next of kin, examine Ohio law.

Process of Admitting the Will

Administrators must admit valid wills when opening an estate. Administrators must also notify all next of kind that they are admitting a will. Instead of waiting for them to appear, written waivers of formal notice may speed up the process. If the kin fails to sign the waiver, they must receive service through certified mail. The filing of the green certified mail card demonstrates proper notice via certified mail. Estates must collect all the notices and waivers. If the will is presented, the court will sign an entry admitting it.

Lesson Takeaways:

  1. Probate Courts determine to admit wills.

  2. Before a will is admitted, next of kin and beneficiaries have the right to know that it has been submitted to court. This is done through a signed waiver or proof they received notice via certified mail.

Spousal Elections

Surviving spouses have several options concerning wills admitted to probate.  After the inventory is filed and up until five months after a citation, a surviving spouse can make elections in accordance to their rights under Ohio law. Not only does a spouse have the right to obtain the property issued under the will, but also has the option to take against the will. A spouse may take against the will and obtain ½ of the net estate unless there are two or more children. In this instance, the spouse may obtain 1/3 of the net estate.

Depending on the value, the spouse may have the right to obtain the residence as part of the inheritance or live there one year rent-free. Additionally, the spouse may also be able to place a lien on any real estate to satisfy the spouse’s share of the estate.

Other elections

A surviving spouse, in addition to the inheritance, can obtain allowance for support for up to $40,000. Independently of this, the surviving spouse can purchase property in the estate for appraised values and elect the right to receive up to two automobiles. Likewise, estates reimburse spouses for funeral costs. The spouse can challenge any separation agreement or post-nuptial agreement, And, the spouse may receive one watercraft and one outboard motor without challenge.

Spouses must make elections within a month of an approved inventory.

Lesson Takeaways:

  1. Surviving spouses maydecide to obtain their share based on what is said in the will, or what is allowed under Ohio law if it leads to more property.

  2. In addition to taking against the will, a spouse may also elect to obtain other property rights outlined in Ohio law.

 Appraisal and Inventory Process

Appraisers must give a value to property without a clear dollar value. The appraiser determines how much each item is worth. An estate must appoint an appraiser when there is more than $5,000 in property. For real estate, the estate may rely on the county auditor’s valuation.

The administrator must list all the assets in the estate within the first three months of appointment. He must also provide the value of them assigned by the appraiser. This includes all bank accounts, personal property, real estate, stock certificates, and other probate property. Administrators must disclose all new assets belonging to the estate within 30 days of discovery.

Courts schedule hearings on inventory for all of the next of kin. They can waive their right to a hearing in writing. Once this occurs, the court approves the inventory after it goes through accounting. Exceptions can be made to the inventory in circumstances where a dispute arises over the ownership or nature of the property.

Lesson Takeaways:

  1. Appraisers must assign a value to all property in an estate.

  2. Before a case is closed, courts must approve inventories and appraisals.

Sale of Property

Courts will sometimes place property for sale. This occurs if courts determine it to be in the best interests of the estate. Sometimes descendants cannot share property. Other times, they cannot afford it. If descendants intend to own property, the estate must file a certificate of transfer after the inventory is approved before the final distribution. This includes any fractional share interests they have in the estate residue.

In some instances, the personal property of an estate does not cover the debts. When this occurs, a creditor may file a complaint to have the administrator sell the real estate after the filing of the inventory. Creditors have six months after the death of the decedent to file a claim for the estate. At this point, the court may accept or, in some instances, reject the debt.

Lesson Takeaways:

  1. What is in the will and what are the best interests of an estate dictate how property is distributed to beneficiaries.

  2. Creditors can seek court approval to sell property to resolve debts.

Attorney Fees

If the estate hires a lawyer, the estate must submit the fee agreement via certificate. After this, the estate must file a waiver. This estate may do this either in writing or through perfected certified mail. Until this happens, the estate cannot pay the lawyer. If the fees are within the guidelines of the court, the beneficiaries may sign consent forms instead of asking the court to approve them.

Lesson Takeaways:

  1. The court or all parties must approve attorney fees.

  2. Guidelines for maximum attorney fees exist in each county’s probate court.

Accounting

A fiduciary must complete an exact accounting of all transactions that occurred while administering the estate. The accounting department must approve this filing. Accountants review all canceled checks, bank statements, titles to personal property, and closing statements. Courts require accountings due within six months of appointment. After accounting approves the final one, you may close the estate.

Lesson Takeaways:

  1. The accounting department must approve all the payments, expenses, and distributions.

  2. This is due within six months, though extensions are available for good cause.