Nothing is certain except death and taxes—and the headaches that result when the two intersect. Rarely do people die with their finances neatly tied up, and one of the frequent issues that arises is the matter of the deceased person’s (decedent’s) last income tax refund.
If a person dies being owed an income tax refund (as thousands of people do every year), what happens to the money? Obviously, the decedent cannot cash a check made out to him or her. A refund in the sole name of the decedent is an asset of the decedent’s estate. Eventually, it will be distributed to the decedent’s heirs or beneficiaries (assuming there is money left in the estate after all legitimate debts are paid). But what happens in the meantime? And what if the tax refund is from a tax return jointly filed with a… Read More
These days, people move around more than ever. You might buy a house in Dayton, get transferred out of state for work, and continue to rent out the Ohio property. Or you might spend most of your life in Ohio, only to spend your later years living with an adult child in a neighboring state. Whatever the reason, there are many people who live outside of Ohio, but continue to own real property in the state. When they die, that real property needs to be disposed of. Ancillary probate in Ohio is one mechanism to deal with real property whose owner died outside of the state.
Ancillary probate is addressed in Chapter 2129 of the Ohio Revised Code. If a resident of another state dies owning property in Ohio, someone must apply to be appointed ancillary administrator in the county in Ohio where property of the deceased person (decedent) is located. If the decedent had a will, the person named as the executor in the will is generally eligible to serve as the ancillary administrator of the Ohio estate. If the decedent did not have a will (they died intestate), the ancillary administrator must be a resident of the county in which the property is located.
As a practical matter,… Read More
A new omnibus bill, HB 595, has made some changes to Ohio probate law that could affect your will or trust. The law is far-reaching, and contains much more information than we can address in a single blog post, but there are some developments in Ohio probate law that could have an impact on you or your loved ones. Here are some of the important developments from Ohio HB 595.
Prior to the effective date of HB 595, an existing document could be incorporated into a will "by reference." This means that simply by referring to a document, book, memorandum, or record in a will, the document could become part of the will. The actual document had to be deposited in the probate court at the time the will referring to it was probated, within 30 days afterward, or later if the court granted an extension of time for good cause.
HB 595 provides that if a will incorporates a trust instrument only under the circumstances that a bequest to a trust is ineffective, the trust instrument needs to be deposited in the probate court within 30 days of a final determination that the bequest was ineffective.
In addition, HB 595 that if it is… Read More
In Ohio, as in other states, attorneys who assist a personal representative in the administration of an estate are entitled to have their reasonable fees paid out of the estate. Attorney fees are governed not only by ethical guidelines established by attorneys' Rules of Professional Conduct, but by other Ohio rules and statutes. As such, attorney fees in estate administration are perhaps some of the most strictly regulated. Although attorney fees are paid out of the estate, Ohio case law has established that it is the personal representative, rather than the estate itself, who is the attorney's client.
What is a reasonable attorney fee for estate administration, and how is it determined? Essential guidance comes from Rule of Professional Conduct 1.5 (Rule 1.5), which states that a "lawyer shall not make an agreement for, charge, or collect an illegal or clearly excessive fee." A fee would be illegal if it violated a statute or some administrative regulation. A fee would be considered "clearly excessive" if an attorney of ordinary prudence would be left with a "definite and firm conviction" that the fee was excessive.
Probate litigation is on the rise, in Ohio and across the United States. One possible reason for the uptick in cases is tied to the increase in divorce over the last several decades. More people divorcing means more people remarrying, which means children from a first marriage might be pitted against a stepparent or step-siblings when it comes time to inherit. Of course, there are other reasons there might be an fight over a will or trust. A close relative who receives a smaller inheritance because of a bequest to a friend or caretaker might be suspicious that that person exerted "undue influence" over the deceased. Much, if not most, probate litigation regarding the validity of a will or trust is based on claims of undue influence. Let's take a look at what is involved in identifying (and proving) undue influence.
The same scenario could be looked at in two completely different ways. Let's say that Mary is an older woman with limited mobility whose only child, Jeff, lives across the country. He rarely visits Mary, though he calls once a week or so. Mary has a neighbor, Tim, who drops by regularly. He helps her with things like cha… Read More
The Ohio probate process can be daunting to navigate at the best of times, but when the estate includes rental property, the process becomes even more complex. If you are serving as executor or personal representative of an Ohio estate that includes income property, there are some important factors you must take into account. Here are some things you need to consider if you are dealing with rental property in probate.
If the deceased owned rental property, you, as executor, may need to step in and take action regarding the property, but this depends on how the property was held. If the property was held in trust, it will not need to go through probate at all, and will be managed by the named trustee.
If the property was not held in trust, but was held jointly with another person, the form of ownership will be important in determining what happens next. If the property was held as joint tenants with rights of survivorship, it will not go through probate. The surviving joint tenant(s) will automatically take the deceased person's interest in the property. If the property was held as tenants-in-common, there is no… Read More
Serving as executor of a loved one's estate carries many responsibilities, and often, it seems, nearly as many pitfalls. Most family members who serve as executors have little experience doing so, making the task even more challenging. Unfortunately, it is possible to make missteps in administering an estate and not realize it until after the harm is done.
It may be helpful to become aware of some of the more common, and sometimes surprising, mistakes that executors make, and learn how you can avoid them.
It's very important to open a probate case promptly, but take enough time to make sure you're doing the right things in the right order. Mishandling of estate business, even inadvertently, can result in personal liability for an executor. Even if you're not held liable for a mistake, errors caused by haste could delay the resolution of the estate.
For instance, Ohio law forgives almost all unsecured creditor claims if the estate is not opened for six months after the death. Opening the estate too soon could result in the loss of thousands of dollars.
Chanc… Read More
You don't tell the neighbors your salary, or your coworkers your bank balance, or your friends how much your stock portfolio is worth. And they wouldn't think of asking, because financial matters are considered private.
If you surveyed 100 people, it's likely that none of them would want their personal and financial affairs to be available to anyone who chose to look them up. But few people consider, when making their will, that that's what happens when you open an Ohio probate case.
Probate court in Ohio is public. Hearings are typically held in open court, which means anybody can be present for a hearing. As a general rule, most probate matters are not terribly exciting, and it's not likely that the general public is going to flock to (or even know about) a routine hearing. Still, you may find it unsettling to know that people you don't know may be able to hear about your family's personal matters.
This is especially true if you think there is even a remote possibility of a will contest or other probate litigation… Read More
Most people know that when an Ohio resident dies, if they have any property in their name that needs to be distributed, the estate must go through the Ohio probate process. But just who is allowed to open a probate case on behalf of a deceased person (decedent)?
If the decedent had a will, the will should name an executor (also known as a personal representative) for the estate. The named executor, whether he or she is a family member or heir, can open a probate case. The probate case should be filed in the Ohio county where the decedent lived. (If the decedent owned real estate in another state, a probate case might have to be filed there, too).
The named executor should present the will and an original death certificate to the probate court along with the petition. If the person named as executor is unable or unwilling to open the probate case or to administer the estate, any interested party may petition the court to have a probate case opened. The court will then appoint an administrator,… Read More
Receiving an inheritance is often bittersweet: on the one hand, you've likely lost someone dear to you, but are receiving some tangible remembrance of them. How long do you have to claim? And can you wait too long to claim your inheritance?
Chances are, you won't have to do much at all in order to receive what you are entitled to. The executor of the deceased person's estate is required to notify you if you are named in the will. If the deceased died without a will or estate plan, the administrator of the estate is required to notify you if you would inherit from the deceased under Ohio intestacy law.
If your whereabouts are known and you are entitled to inherit, the executor or administrator will distribute your share to you in order to be able to do a final accounting and close the estate. You don't have to affirmatively request it. Understand that even if you were bequeathed a certain amount, you may receive less than that if the estate didn't have enough assets to both satisfy creditors' claims… Read More