Many people we meet assume that “probate” is an 8-legged monster that sucks the life out of every family’s hard-earned savings. While clients are well-advised to implement strategies to minimize the involvement of the Probate Courts, there are many misnomers about the probate process that can easily be dispelled.
What Is the Role of Probate Court?
Probate Courts are needed to help families transition assets from deceased persons to their heirs or beneficiaries.
While Probate Courts in Ohio have jurisdiction over several different legal matters, the one most commonly encountered is when a deceased person leaves behind assets that must be administered. When an individual dies in Ohio, and that person owns assets that do not have contractually designated beneficiaries (such as payable on death or transfer on death designations) or some other probate avoidance mechanism, those assets become part of the deceased individual’s probate estate. The Probate Courts of Ohio govern the disposition of those assets.
If the individual executed a last will and testament, then the Probate Court appoints the executor named in that will to take possession of, inventory, and administer the deceased person’s assets. The process is monitored by the Probate Court in order to ensure that the deceased person’s will is carried out.
If the individual did not execute a will, then Ohio’s laws on intestate succession govern the distribution of the person’s estate by identifying the next of kin and ensuring that the estate assets are distributed to those heirs. The Probate Court appoints an administrator to take possession of, inventory, and administer the deceased person’s estate.
The Probate Court’s role as a monitor in this process can be a benefit; by providing oversight, there is less opportunity for someone to mismanage a deceased person’s assets. However, that oversight role necessarily requires there to be additional paperwork and filing requirements that can require additional legal expense. Typically, legal expense is driven not by the size of the estate, but whether or not there are complexities such as (1) litigation involving the estate, (2) heirs that are minor children or have special needs, (3) business operations that must be carried out through the estate, and (4) complex distribution provisions in a will.
The Truth About Probate Tax: How Much Does Probate Cost?
Many individuals falsely assume that Probate Courts take a sum of money or a percentage of the estate. In short, there is no “Probate Tax” that is levied by the Probate Court on the probate assets. The Probate Courts do charge a filing fee and court costs to handle the estate administration. However, the total of those fees rarely exceeds $300 total, even for larger estates. Only in those estates where there is extensive fighting among heirs or other litigation that requires significant court involvement are court costs higher. Even then, the total court costs are typically still well under $1,000 where litigation is involved.
Taxes on estates in general are an entirely different matter. Ohio repealed its estate tax effective in 2013. Accordingly, Ohio residents pay no state estate tax no matter how large or small their estates are at the time of their death. The Federal Estate Tax applies to all probate and non-probate estate assets. However, as of 2024, the per person exemption amount for the Federal Estate Tax is $13.6 million. If the individual’s total estate (probate assets and non-probate assets) is valued less than that, there is no tax owed.
Avoiding Probate Doesn’t Mean There Aren’t Any Expenses
Many people assume that if you avoid probate, you avoid expense. There can in fact be savings achieved if you figure out how to avoid probate through a carefully planned estate. However, simply avoiding probate does not automatically eliminate expense.
This is particularly true if estate litigation erupts over the deceased person’s beneficiary designations, or where there is ambiguity, or there is a potential issue of coercion or undue influence. In addition, for those clients that opt to prepare a trust to avoid probate, there are still administration expenses when handling a trust after the death of the trust’s creator.
Whether those expenses involve attorney fees, accountant fees, or other expenses required to carry out or sort out what may be a tangled mess of beneficiary designations, complex trust provisions, or multiple income tax returns, these can all create unanticipated expenses. Depending on the situation, Probate Court involvement may involve less expense than avoiding probate.
Estate Planning: When Is Probate Required?
Every person’s estate plan is individual to their circumstances; proper planning, even if that includes the Probate Court, is the most important thing.
There is no one-size-fits-all estate plan. Every individual’s needs can be different. Whether that involves family dynamics, high value assets, family business operations, or any other unusual or unique factors, the key is to plan carefully. There may be valid reasons to involve the Probate Court in some estates. There are equally valid reasons to eliminate or minimize Probate Court involvement.
When You Need the Best Probate Lawyers
Understanding the process of wealth transfer is why it is important to consult with experienced legal practitioners that know and understand the complexities that can occur after an individual dies. At Plakas Mannos, our attorneys are prepared to assist you with that planning process to achieve your goals and give you peace of mind. If you’re looking for a probate attorney near you, contact us today.
About the Author
David Dingwell is a partner at Plakas Mannos who has helped hundreds of Ohio families strategize and implement their wealth and estate planning goals.
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