Most people know what a will is, but many don’t understand their importance, especially in end of life planning. Surprisingly, it’s fairly common for an individual to pass away without a will in place. In a recent wills and estate planning study by Caring.com, only 45% of Americans aged 55 and up reported having a will.
Some may think that a will is unimportant if they have a spouse or children, or a smaller estate. What they may not know is that the lack of a will creates a complicated situation for surviving relatives of the deceased, as well as for probate court.
The first step in settling an estate without a will is finding someone to be in charge. If someone passes away with assets in their name alone, or without a joint owner or beneficiary, their estate will go through probate court. If there is no will, someone must be appointed as administrator to handle the administration in probate court.
In Ohio, and most states, there are statutes in place stating who has priority to serve as administrator – usually a surviving spouse or child. There is a hierarchy of priority in potential administrators based on proximity to the deceased. If someone with a higher priority does not wish to serve as administrator, someone lower on the list can be appointed. However, all individuals with higher priority must approve and consent to anyone with lower priority taking the job.
Potential and approved administrators must be bondable: that means no felonies, pending or outstanding IRS liens or bankruptcies. The probate judge will oversee the appointment of an administrator – usually approving applicants with consent of all next of kin. If an applicant does not have consent from all next of kin, the court will hold a hearing on the appointment of the administrator.
Once an administrator is appointed, they can begin the process of collecting and liquidating assets and paying off debts. The administrator is required to file an inventory with the court within 90 days of appointment notifying them of the assets of the decedent. They are also required to file an accounting of all transactions of the estate, including distribution of assets to next of kin of the decedent. Asset distribution follows a similar pattern as appointment of an administrator.
The Statute of Descent and Distribution is another hierarchy set in place to give priority to the deceased’s next of kin. If the decedent has a surviving spouse and no children, all assets will go to the spouse. If they have surviving children and no spouse, all assets will go to the children, equally. Cases become more complicated if the decedent has a surviving spouse and children from a previous marriage.
The statute goes down the hierarchy of relationship: surviving spouse, children, grandchildren, parents, siblings, nieces and nephews, grandparents, descendants of grandparents, stepchildren and finally to the State of Ohio if no one is left. The administrator ultimately applies the law to make the decision on who gets what.
Without a will, you will no longer have a say in where your assets go. Your surviving relatives will have to go through a lengthy probate process to distribute these assets, no matter how small or large they are. This can be easily avoided with proper planning. By creating your will now, you can ensure that you have full control over your assets.