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Senior Citizen's Guide to Southwest Ohio

What is Probate, Anyway?

Probate literally means "to administer."  At death, everything the deceased owns is classified as either a Probate or a Non-Probate asset.  These two types of assets are treated differently in the law.

Probate assets are: 1) assets owned exclusively by the deceased with no named beneficiary and 2) assets owned by the deceased as "tenants in common" with another person.  With assets owned as "tenants in common", the deceased person's fractional share is included as a Probate asset.

Probate assets are subject to Probate Court administration and are handled by an Executor or Administrator appointed by the Probate Court.  The Probate estate is administered in the county of the decedent's last residence.

The basic function of Probate procedure is to:

There are two procedures for administering Probate assets.  The first is an abbreviated procedure for small estates known as Relief from Administration.  The second procedure is a full administration.

A full administration starts with the appointment of a fiduciary (the Executor or Administrator).  There are detailed timetables and legal requirements for each step of the administration procedure that usually takes six to ten months to complete.  However, settling estate taxes and any disputed claims will add several months to this process.

When a person dies with a Will, the probate assets generally pass to the persons designated in his or her Will. HOWEVER, a surviving spouse has the right to take either the amount left under the Will or a statutory "forced" share of the Probate assets.

If a person dies without a Will, the probate assets pass to his or her closest relatives as determined by state law.  The spouse comes first; then, the children and lineal descendents.  This is followed by the parents, then siblings, then nephews and nieces.

It is better to execute a Will to direct the distribution of assets.  However, it is often even wiser to avoid Probate all together.  This can be done by using non-probate ownership.

For Example:
Mrs. Smith has 2 children, Susan and Jane.  Mrs. Smith's Will divides her estate equally between her children upon her death.  Mrs. Smith's assets consist of a $50,000.00 stock account titled in Mrs. Smith's name alone and a $40,000.00 checking account held in the name of Mrs. Smith and her daughter, Susan.  At Mrs. Smith's death, Susan would be entitled to the ENTIRE checking account since it is not a Probate asset and DOES NOT pass under her Will.  Sue and Jane would divide the stock after the payment of the debts and administration costs.

Non-Probate assets pass directly to another person upon the death of the decedent.  They are NOT governed by the Will or the state law governing descent.  They are also not subject to the surviving spouse's statutory "forced" share or to Probate Court administration.  However, all assets are included for estate tax purposes.

Non-Probate assets fall into several categories including:


 

INVENTORY

Probate Assets

Non-Probate Assets

 

 

Assets in Deceased's name only

Assets in a Trust

 

 

Assets in Deceased's name as "Tenant in Common"

Joint with Right of Survivorship (JTWROS)

 

 

 

Assets w/ previously designated beneficiary

 

 

 

Payable on Death (P.O.D.)

 

Transfer on Death (T.O.D.)

 


The use of Non-Probate assets is often recommended because they are easy and quick to transfer upon death.  But you must BE CAREFUL because the careless use of Non-Probate assets can destroy a carefully constructed estate plan.


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