PROBATING AN ESTATE
During my years in practice I have assisted executors and administrators in handling hundreds of estates. This page contains answers to some of the questions most frequently asked by administrators and executors. Naturally you are encouraged to call me with any questions you have about estate administration.
Probate is the legal process by which the affairs of the deceased are finalized. Very simply stated the process involves (1) accounting for all that the decedent owned and owed (2) paying the bills, taxes (if any) and administrative expenses (your fee, my fee and court costs) and (3) distributing the remainder (if any) per the will or law. The court and state law will provide time limits by which certain things are to be done.
The executor or administrator is the representative of the estate. As such he or she is a fiduciary and must carry out the duties of his office with the utmost good faith. Those duties essentially are to pay all of the just debts of the estate and to account for and collect if necessary all of the assets of the estate.
State law provides guidance on the order in which bill are to be paid. This can be important where the estate does not have enough money to pay all the bills. Claims against the estate must be presented within six months of the date of death. The executor or administrator must open a separate estate checking account from which to pay the bills. He or she may refuse to pay any bill presented that he or she believes is unjust. I will be glad to help you make that determination. In fact, that's part of what I am paid to do.
The executor or administrator must account for all of the decedent's assets, no matter where they are. Values must be placed on the assets as of the date of death. The executor or administrator will value those items which do not require special appraisal skills. Assets such as land and jewelry will have to be appraised by a qualified person. Bills are to be paid from estate assets. If the assets exceed the bills a distribution to the proper survivors will be made. If the bills exceed the assets, certain debts or parts of them will not be paid. If it appears that there will be insufficient assets to pay the bills, I will help assure that only proper payments are made and in the proper order. The first inventory of assets is to be filed within thirty (30) days of the appointment of the executor or administrator. We can get an extension for good cause. Obviously, the debts will be listed later. If the executor or administrator personally has a claim against the estate he or she must present it to the Court within six months of appointment.
The executor or administrator, as representative of the estate, will be named in any lawsuit filed in connection with this estate. However, the executor or administrator has no personal liability simply because he or she is so named.
The executor or administrator's compensation is controlled by state law. Basically he or she will receive for services 4% of the first $100,000.00 of estate assets, then 3% of the next $300,000 and then 2% of the balance. The executor or administrator may decline payment if he or she so chooses. The executor or administrator must pay income tax on the fee paid for services to the estate. There is no income tax on inherited money or property.
My compensation is calculated in accordance with a formula provided to lawyers by the Probate Court. Fulton, Williams, Henry and Defiance counties use the same formula, a formula that provides for a decreasing percentage as the estate gets larger. The fees are 10% of the first $5000, 5% of the next $15,000, 3 1/2% of the next $30,000, 3% of the next $50,000, 2 1/2% of the next $80,000, and 2% of the amount that exceeds $180,000. That formula yields a figure for compensation in the typical estate. Where I am required to render extra ordinary services, further fees may be approved by the Court. The Court must approve my fees and this approval is given where the fees are appropriate for the services performed. It is my duty to act as your representative, prepare all of the forms required by the Court, determine whether any taxes are due, and handle legal and tax matters relating to the estate. As a loose guideline my fee for serving as representative of the executor or administrator will be about the same as his or her fee in a typical estate. Where I render extraordinary service my fee will be larger.
It is impossible to say how long it will take to close the estate. The executor or administrator and I must both work diligently toward that end but any number of things can arise that can extend the time needed to close the estate.
Some important deadlines in estate administration are that the inventory is to be filed within thirty (30) days after date of appointment of fiduciary; Ohio no longer has an Inheritance Tax for people who passed away after January 1, 2013; an accounting of income and expenses of the estate is due in nine (9) months after appointment of the fiduciary; and creditors have six months in which to turn bills into the estate.
If you choose me to represent you in your capacity as executor or administrator I will do all I can to make your job easier.
To learn more, visit our Fayette office!
104 East Main Street P.O. Box 40
Fayette, OH 43521