If you’ve been named in a Will to serve as the Executor of someone’s Estate, you have a significant responsibility. As the Executor, you must ensure that the Estate is handled in accordance with Ohio law.
One of the most important duties of the Executor is managing all of the estate assets and for paying all of the legitimate estate debts. Your first responsibility, then, is to determine what those assets and debts are.
The Executor must search for and locate all property owned by the decedent, including all real estate, bank and investment accounts, life insurance, vehicles, stocks and bonds, and personal property. You’ll also need to identify all of the liabilities of the decedent, including credit card accounts, loans, and medical bills. Once the assets have been identified, you’ll need to determine what your responsibility is for each individual asset. That generally depends upon whether the asset is a “Probate Asset” or a “Non-Probate Asset.” As Executor, you are responsible for the Probate assets only. The Non-Probate Assets are handled directly by the surviving owner(s) or the assets’ beneficiaries.
Probate Assets and Non-Probate Assets
“Probate Assets” are those assets that were owned in the decedent’s name only without any kind of beneficiary designation. They are the assets that must go through the Probate process in order to be accessed and/or transferred to the beneficiaries.
“Non-Probate Assets” are any assets owned by the decedent that have beneficiary designations or that were owned jointly with right of survivorship. Life insurance and retirement accounts are non-probate assets (as long as they have living beneficiaries named on them). Also, bank accounts, investment accounts, real estate and vehicles can be non-probate assets if they have a TOD (transfer on death) or a POD (payable on death) beneficiary designation on them. If an asset is owned jointly with right of survivorship, then the asset will be owned by the surviving owner(s) without having to go through any Probate proceedings.
If the decedent had a Revocable Living Trust (RLT), then any assets owned by the trust will be non-Probate assets as well.
Protecting the Estate’s Assets
When you’ve determined what the Probate Estate’s assets are, you have a duty to protect them. You will have to maintain insurance on any real estate and vehicles owned by the Estate. The insurance agent should be able to help you make sure that the right coverages are in place.
The Executor must also make sure that the Estate’s assets are secure. For example, you’ll need to control access to any real estate (perhaps even changing the locks) so that you can control who enters the property and when they have access.
Paying the Estate’s Liabilities
When you’ve determined what all of the Estate’s liabilities are, you can use the Estate’s assets to pay those liabilities. However, keep these two cautions in mind:
- If you pay a bill that was not a legitimate debt, you could be held personally responsible to the Estate’s beneficiaries for the payment. Make sure that any debt you pay is a legitimate debt.
- If the Estate’s liabilities are more than the value of the Estate’s assets, then the estate is “insolvent,” and there is a VERY specific way of paying the debts of an insolvent estate. You should consult with your attorney before paying any bills in an insolvent estate. If you violate the rules for payment of the debts of an insolvent estate, you could be sued and held personally responsible to the Estate’s creditors.
If this sounds overwhelming, Legacy Law Group is here to help you. We’ve spent decades guiding clients through the Ohio probate process, and we can guide you and your loved ones as well. Contact us at 419-872-7670 or request an appointment through our website to set up an appointment to discuss your Ohio probate needs.