Cincinnati Probate Attorney Topics: Improper Distributions

There is a common misconception that by creating a Will your assets avoid Probate. In Ohio, using a Will does not allow your assets to avoid Probate.

Once assets are in Probate, the executor (if the person dies with a Will) or administrator (if the person dies without a Will) cannot immediately distribute assets without some risk of personal liability. The executor should only distribute assets after the inventory is approved, after the Will contest period has expired, and after confirming with the Cincinnati Probate Attorney that it is proper to make distributions.

Cincinnati Probate Attorney
The Probate Process

If a distribution from the estate is made to a beneficiary or heir, he or she is liable to return the assets or the proceeds from the assets to the estate if they are necessary to satisfy the share of a surviving spouse who elects to take against the Will or if the Will is set aside (in a contested action).

After distribution, a distributee will be personally liable to a claimant who presents a valid claim. Thus, it is important for a beneficiary not to spend any funds distributed until the Estate is closed and approved by the Probate Court.

If Estate funds are not sufficient to pay creditors (including the sums returned by beneficiaries), the executor or administrator will be liable to the extent that the sum of the remaining assets of the estate and the assets returned are insufficient to satisfy the claims. The executor or administrator may provide for the payment of rejected claims or claims in suit by setting aside an amount sufficient for paying the claims. In this case, assets are set aside for the payment of the claims in a manner approved by the Probate Court.

In this type of estate administration matter, each claimant for whom assets are to be set aside is provided notice, in the manner as the court shall order, of the hearing upon the application to set aside assets and shall have the right to be fully heard as to the nature and amount of the assets to be set aside for payment of the claim and other conditions claim.

In some cases, the court, as a condition to any distribution, may require any beneficiary or heir to give a bond to the state with surety approved and in an amount determined by the court, conditioned to secure the return of the assets to be distributed, or the proceeds from the assets or as much of the assets as may be necessary to satisfy the claims.

The best option for the person in Cincinnati, Ohio managing a Probate Estate is to work with his or her attorney to ensure distributions are proper. Distributions without this legal guidance create more legal problems for the executor and the beneficiaries.

Feel free to contact Cincinnati Probate Attorney Elliott Stapleton to review your potential Estate Administration matter in Hamilton County, Butler County, Clermont County, or Warren County.

Sources: Chapter 2117: PRESENTMENT OF CLAIMS AGAINST ESTATE of the Ohio Revised Code

Cincinnati Probate Guide: Loss of a Spouse

If you are married or have parents who are married, at some point you will either directly or indirectly deal with the loss of a spouse.  The purpose of this article is to provide a straightforward guide to avoid common mistakes and oversights during what is already an emotional time.

How do you start?

After losing a spouse, the most important thing to do is ask for help. Working with a trusted adviser will help you ensure that all legal and financial obligations are taken care of without the worry of missing something along the way.

In most cases your family and friends will offer emotional support. With good intention, some may also offer explanation on what should happen or how the law works. While such support is appreciated,  because everyone’s legal and financial situation is different, it is important to consult with professionals to determine the next steps.

Who should I contact?

The following is a list of Organizations you will need to contact:

☐ Social Security.  You must inform Social Security of your spouse’s death. If you are receiving Social Security benefits, those benefits may change.

☐ Pension Provider.  If your spouse was receiving a pension, you will want to contact the provider to stop future payments and determine if there is a death benefit.

☐ Employer.  If your spouse was still employed, you need to let the employer know of his or her passing. The employer may have offered a life insurance policy which would need to be claimed.

The following is a list of Professionals you will need to contact:

☐ Attorney.  The most important professional to contact is an experienced estate attorney. There are many legal considerations which, if not properly addressed, will result in unnecessary loss.  If you do not work with an experienced Estate and Probate Attorney, I offer a free consultation to discuss the process and (if necessary) the flat rate for Probate services.

☐ Financial Adviser.  Before making changes in your retirement funds, bank accounts, or investing life insurance proceeds, it is best to speak with a financial adviser.  If you have lost a spouse, you may have also lost a source of income or health benefits. Based on these conditions, your investment strategy should be reassessed.

☐ Accountant.  For the year of your spouse’s death, a tax return is still necessary. In between the time of your spouse’s death and the date the Estate is resolved, if there was income in excess of $600.00 a 1041 form must also be filed with the IRS to claim income taxes.  In addition, if there was a loss on the sale of assets in the Estate you may want to file a 1041 to apply that loss to offset future gains.

All of these are issues for which professionals can provide sound advice to make certain your loved one’s estate and your future are secure.

This Legal Article was written by Elliott Stapleton a Probate and Estate Planning Attorney in Cincinnati, Ohio. Elliott Stapleton is a Partner with CMRS Law in Cincinnati.