Guide to Final Distribution of Estate Assets

One of the responsibilities of the personal representative of an estate is the final distribution of estate assets to the heirs or beneficiaries of the deceased. Before a final distribution of estate assets can happen, however, there are many other steps that must be taken. If you are serving as the personal representative (also known as the executor or administrator) of a decedent’s estate, it is critical to fulfill those other responsibilities before making an estate distribution.

The probate/estate administration process can be a difficult one. Typically, the person appointed as personal representative is grieving the deceased, as are the heirs or beneficiaries. Many personal representatives have never served in that role before, and may be confused and frustrated by probate court requirements. In addition, heirs may not understand why it is taking so long to settle the estate, and in some cases, may unfairly suspect the personal representative of wrongdoing.

For many estates, it is a good idea for the personal representative to have the help of an experienced probate attorney. A probate attorney can help to ensure that the estate administration process goes smoothly, avoiding unnecessary delays so that estate distribution can take place as soon as possible. A probate attorney also offers peace of mind to the personal representative; with an attorney’s guidance, the personal representative can be sure that they have “dotted all the i’s and crossed all the t’s” before distributing an estate.

What Needs to Happen Before Final Distribution of Estate Assets?

Distribution of estate assets is one of the last things that happens before an estate is closed. To understand the process of distribution, it’s important to start at the beginning.

When someone dies, they usually have at least some assets that need to go through probate. (Certain assets, like those in a living trust, pass outside of probate.) The first thing that needs to happen in the probate process is for an interested person (usually a family member) to file a petition with the probate court to open an estate. Then, the probate court will appoint a personal representative to administer the estate.

If the deceased person, known legally as the “decedent,” had a will, the will probably named someone to act as personal representative of the estate. If there was no will, the probate court will need to appoint someone, usually a close relative, to act in that role. Even if there was a personal representative named in a will, however, that person would have no authority until the court formally appointed them.

Once appointed, the personal representative needs to locate, gather, safeguard and inventory all assets of the estate, from jewelry, clothing, and personal property to bank accounts, investments, and real estate. Some estate assets may need to be appraised so that their value can be ascertained; for other estate assets, such as financial accounts, the value is clear.

Payment of the Debts of the Estate

At this point, the personal representative knows what is in the estate; what they may not necessarily know is what needs to go out before the final distribution of estate assets to heirs. Before a final distribution of estate assets can be made, the personal representative must file and pay income taxes on behalf of the decedent and the estate. In some cases, the personal representative must pay any estate tax that is due, although only a small percentage of Ohio states owe estate tax. The personal representative must also pay the other legitimate debts of the estate.

Ohio law establishes a priority for the payment of estate debts. This priority matters because if there are insufficient assets to pay all estate debts, higher priority debts must be paid first. Creditors must make claims against the estate within six months after the death, or within 30 days of being directly notified of the death by the personal representative. If heirs or beneficiaries of the estate were to receive a distribution before a timely, legitimate claim against the estate is paid, they would need to return some or all of their distribution to satisfy the debt.

Closing an Estate and Final Distribution of Estate Assets

Once the time for creditors to claim against the estate has elapsed, claims are barred in almost all cases. At that point, the personal representative can finally petition the probate court for permission to close the estate and distribute the remaining assets. The personal representative must generally file with the court an accounting of their transactions on behalf of the estate. These transactions might include collection of income or debts owed to the estate, taxes paid on behalf of the estate, and payments made to creditors of the estate, as well as attorney fees and expenses of the personal representative in administering the estate.

If the decedent had a will, the remaining estate assets will be distributed to beneficiaries according to the terms of the will. If there was no valid will, the estate will be distributed to the decedent’s heirs according to Ohio laws of intestate succession. Real estate assets may be deeded to heirs or beneficiaries, and title to vehicles transferred.

It is far better for an estate to be administered correctly than to be administered quickly, but with an experienced probate attorney, you may be able to have both. To learn more about administering an Ohio estate, including final distribution of estate assets, contact Gudorf Law Group to schedule a consultation.