Do I Have to Pay Debts in Ohio Probate Court?

Probate, or estate administration, is the process by which a deceased person's affairs are put in final order. Taxes and debts are paid, and money and property is distributed to beneficiaries. However, after a person's death it may be unclear which bills need to be paid immediately, which bills should be paid later during the estate administration process, and which ones might not be legitimate and can, therefore, be ignored.

The probate process is complicated, fraught with complex filing deadlines, nearly-identical forms that need to be completed, and creditors clamoring to be paid. All of this is compounded by the stress of the recent loss of a loved one.

If you were appointed as the executor of a deceased person's estate in Ohio, I recommend that you consult with an experienced Ohio probate attorney to make certain that you comply with all applicable laws, including filing dates, use the correct forms, and make sure that the estate is administered properly. Even if you are not the administrator or executor of the estate, you may have questions about the probate process, wonder how long it will take to probate the estate, or wonder what to do about any outstanding debts owed by the deceased person.

Identify the Deceased Person's Debts

The executor should begin by collecting and making a list of all of the deceased person's bills. Debts may include:

• Mortgages or lease payments
• Credit card bills
• Child support and alimony
• Property taxes
• Federal and state income taxes
• Loans
• Utility bills
• Phone bills

Administrative Expenses Versus Final Bills

Next, identify which debts will be ongoing during the probate process, and which debts can be paid off in full. The ongoing expenses are called administrative expenses, while the debts that can be paid off in full are called final bills. Administrative expenses will include bills like deceased person's lease or mortgage, some utility bills (which should be paid so the property is not damaged), insurance, and taxes on real estate. Final bills may include taxes, loans, credit card bills, and phone bills.

Most of the administrative expenses can be paid as they arise, using estate assets. The executor will usually consolidate the deceased person's accounts and insurance money into a single bank account that can be used to pay ordinary bills, notifying the service provider that the person is now deceased and terminating the service.

Final bills must be presented to the estate within 6 months and, if they are legitimate, will be paid by the executor.

Debts Must Be Properly Presented to be Enforceable

Regardless of the type of debt, creditors must present their claims to the estate within 6 months after being properly notified of the person's death. If the creditors do not properly present the claim, the debt is not enforceable and does not need to be paid. However, if the creditor was not properly notified of the person's death and the estate is not being probated properly, the creditor may have additional time to try to collect on the debt. This is one reason I recommend hiring an experienced Ohio probate attorney - to make sure that the estate is properly opened and that creditors are properly notified so that legitimate debts can be paid.

When the Estate Does Not Have Enough Money to Pay All Creditors

Sometimes, the estate does not have enough money to pay all the claims against it. In this case, the estate might be declared insolvent. For insolvent estates, Ohio law specifies the order in which debts are to be paid:

1. Administrative expenses
2. Funeral expenses up to $4,000, and burial expenses up to $3,000
3. The allowance for the surviving spouse or minor children
4. Debts entitled to preference under law
5. Final medical bills
6. Property taxes
7. Debts for services performed for the deceased person in the last 12 month

As executor, you might be tempted to pay the debtor who makes the most noise. However, the executor should only pay debts that he or she needs to. Otherwise, the executor could be held personally liable for amounts that were not properly paid out. For assistance determining which bills need to be paid and which ones can be ignored, contact an experienced Ohio probate attorney.

Questions About Debts in Probate?

If you have questions about paying debts in Ohio's probate courts, contact us at Wolfe Legal Services today. I work with people throughout the greater Columbus area, including Dublin, Bexley, Upper Arlington, Marysville, Hilliard, Delaware and Newark, and throughout Franklin County, Delaware County, Union County, and Licking County. Call (614) 263-5297 any time or complete our online form.