Probate is the legal process of settling the estate of a deceased person. Through probate, any debts of a decedent are resolved and the terms of the decedent’s will are carried out. Probate only affects, and is only required for, “probate assets.” Generally speaking, probate assets are those to which title does not otherwise pass to the decedent’s beneficiaries by contract, operation of law, trust, or deed. Probate assets require court action in order for title to pass to the proper heirs.
If a decedent leaves probate assets, but no will, then the distribution of the decedent’s estate will be governed by Ohio’s intestacy statute. This law is intended to reflect the most common estate plan, but it often does not reflect the true intentions of an individual, which is one reason why it is important to have a will. Generally, the intestacy statute provides that all assets will go to a decedent’s surviving spouse; if no spouse, then to the children; if no spouse or children, then to the parents; if none of those, then to the siblings; and so forth.
Probate serves the important function of settling all of the debts of the decedent. Surviving family members generally are not personally liable for the debts of the decedent. Probate is also the forum through which a will may be contested. Opening a probate estate is also a requirement before any wrongful death action may be filed on behalf of a decedent.
Many assets can pass to one’s heirs without probate. Life insurance and IRAs, for example, can pass to beneficiaries named by the decedent by virtue of contract. Ohio law provides that an unlimited number of vehicles, up to a certain value, pass to a surviving spouse by operation of law without probate. Any property held by a decedent’s trust will pass pursuant to the terms of the trust, rather than through the decedent’s will. Deeds for married couples are often “joint and survivorship,” meaning that upon the death of one spouse, the property automatically passes to the other. These are only some examples of non-probate assets. Usually, the steps that need to be taken to transfer such assets to the beneficiaries are relatively simple.
Note that “Probate” is not the same as estate tax. Even if probate is avoided entirely, estate tax may still be due. Whether an estate asset needs to be probated is a separate issue from whether it is taxable. Often, estate tax is not a concern upon the death of an individual who leaves his or her estate to a surviving spouse because there is a marital exemption from estate tax. Otherwise, any estate with a taxable value of more than $5,600,000 (in 2018, with future adjustments for inflation) is subject to federal estate tax.
We can help you not only with the probate process, but also with any non-probate transfers and estate tax returns. Some clients can do most of the work themselves, while others prefer to allow us to take care of everything. We can help you as much or as little as you need. As estate planners, we can also help you to avoid or minimize probate and estate tax for your heirs.