Today I’d like to talk a little bit about the administration of a probate estate. After a person passes away and the initial probate filing has been made, the case goes through what’s referred to as, the Estate Administration.
Administration of a Probate Estate
The administration of a probate estate, or estate administration, generally involves 4 main steps:
- identifying property of the deceased,
- getting control of the property,
- paying bills and necessary expenses, and
- distributing the property to the beneficiaries.
The person eligible to administer a probate estate will be an Ohio resident who is either named as the executor in the will or, if there's no will, next of kin.
Either the executor or the next of kin has the choice of administering the probate estate themselves or requesting the probate attorney handle the administration.
1. Find and Secure Estate's Assets
The first step of a probate administration is to find and secure the assets. A careful search of the deceased home may turn up financial statements, insurance policies, and other documents which may help in this task.
It's always a good idea to check the unclaimed funds online listings maintained by the state of Ohio. Some property is not included in the probate estate like life insurance proceeds and jointly held real estate. This will be addressed in a future blog post.
2. Get Letter of Authority and Federal Tax Identification Number
In the initial probate filing, the executor (if there is a will) or the administrator (if there is no will) will receive what is called the letter of authority.
The letter of authority is the court order which tells the world that you have the authority to take care of all the affairs of the deceased.
The executor or administrator must then obtain a federal tax identification number and open up a bank account in the name of the estate.
Most financial assets of the estate should be put in the estate bank account. After all property is identified, the executor or administrator will then make a report to the court detailing everything that was found.
3. Pay Estate Bills and Other Necessary Expenses
From the estate bank account, the executor or administrator can pay expenses which are necessary to maintain the estate like utility bills and maintenance for the real estate.
Also administrative expenses like funeral bills can be paid. If there’s sufficient assets, general creditors bills can be paid like credit card bills, hospital bills, and other debts of the deceased.
The executor or administrator will also investigate the validity of all debts and make preparations for the deceased’s relevant tax filings.
As we discussed in a prior video blog, payment must be made in a specific order:
- Administrative Expenses
- General Creditors
- Distribution to the Beneficiary
4. Distribute Property to Beneficiaries
If there is a will, distribution to beneficiary will simply follow the will.
If there is no will, a specific formula found in the Ohio Revised Code must be used. The intestate formula is complex so make sure to fully understand the statute or get guidance from competent counsel.
Contact an Experienced Probate Attorney
The process can seem complicated but with competent counsel it can make things go smoothly.
Here at Port Legal we’re here to guard, guide, and defend your interests. We are located in Franklin County but handle cases all throughout the state of Ohio.
Additionaly, if you have any topics you’d like to see us address, please let us know!