Without an Estate Plan, Who is in Charge?
What happens if you or a loved one does no estate planning? In other words, there is no valid will or trust that describes how assets are to be divided among heirs, who will be nominated as guardian for minor children, and who will be responsible for administering the estate. When this happens, we have what is called an Intestate Estate.
Ohio law sets out a specific order for who may administer an intestate estate. If the person who died (the “Decedent”) was married, the spouse is first on the list. Next in line is the decedent’s child or children, if they are over eighteen. If there is no spouse and no children, then the decedent’s parent or parents are next, followed by the decedent’s siblings. Although a person may have only one spouse, there could be more than one eligible child, parent, or sibling. Because each person at a particular “level” has an equal right to administer the estate, if the family members do not agree, then the Probate Court must choose an Administrator from among those who have applied, or select a neutral attorney from a list kept by the court.
There are certain requirements for Administrators. When there is no will, the Administrator must be a resident of the state of Ohio. Why? So that the court can exercise personal jurisdiction over that person if they mismanage the estate. The Administrator must be bondable. A bond is an insurance policy that will repay the estate if the Administrator does not properly administer the estate. The person applying to become Administrator must not have committed certain crimes or have such poor credit that they would be ineligible for a bond. A bond is required where there is no will, and the amount of the bond is usually double the amount of assets in the estate. The fee for the bond comes out of the estate assets. The Administrator also must be “otherwise suitable.” This is a broad description that gives the Probate court a lot of discretion.
If there is more than one applicant to be administrator who meets the minimum requirements (which happens quite often), how does the court decide who to appoint? The court will choose someone it thinks can be fair and impartial; someone who seems organized and willing to do the necessary work; someone who does not have a personal agenda or conflict of interest; and someone who is not likely to be influenced by others. If there is a high level of conflict in the family and it appears that no applicant meets these requirements, then the court will appoint an attorney as a neutral administrator.
The process of appointing an administrator to manage the estate can take months if there is disagreement among those who are eligible to serve. During that time, nothing can be done to transfer assets or pay expenses, which can create a strain on dependents of the decedent.
Failing to plan can leave your family in a precarious financial situation, can create conflict among family members, and will most certainly cause delays, often lengthy. Let’s find a time to put a plan in place so that doesn’t happen to your family!