What happens if probate proceedings are never initiated for the transferal of title from the decedent to the heirs/beneficiaries? “Probate” is a court-supervised process that is designed to help transfer title, but sometimes it’s unclear when probate court is absolutely necessary or when it’s required. These unclear circumstances can occur when an estate is insolvent, an estate has little to no probate assets, or maybe the decedent died without a will and there isn’t an identifiable fiduciary.
What if the estate is insolvent?
An insolvent estate exists if there are not sufficient assets in a decedent’s estate available to pay all of the debts and expenses. Some states have statutes that require a creditor to present it’s claim within a specified timeframe or else that claim will be barred. For instance, Ohio allows only six months for most creditors to present a claim. Sometimes it’s a good idea for a fiduciary to wait six months to open an estate in order to “beat” some creditors. However, there is certainly a moral question to factor into the decision. I have seen more than one fiduciary be more than willing to pay the debts of the decedent as a matter of “right and wrong”.
What if an estate doesn’t have any “probate assets”?
It’s very common that an estate (even an estate with many assets) does not have any “probate assets.” Most people are aware that a correctly structured and funded trust keeps assets out of probate court. However, some states offer opportunities to reach that same goal. For instance, some states allow an individual to have a transfer on death affidavit for real property. This legal instrument transfers title to the named individual upon the death of the owner(s). It’s possible that an individual’s estate has been structured so there are no assets that need to go through probate, even if there is a will. Many times this is the main objective of an estate plan. However, sometimes an asset “slipped through the cracks” of an estate plan, or maybe no plan was ever created. if an asset is required to go through probate for whatever reason, a state may offer a shortened probate process if the probate estate is relatively small. In Ohio, a small estate is valued at $35,000 or less. This threshold is increased to $100,000 if the will left all assets to a surviving spouse. If the estate is valued at less than $5,000, it’s possible that no formal probate proceeding is necessary; a “summary release” may be filed. If probate is required, it is imperative that the proceedings are initiated and title gets transferred. A small headache now can save a larger headache down the road with a clouded title and/or issues conveying property.
What if the decedent died without a will and there is no identifiable fiduciary?
If an individual died without a will, that means no executor has been named to initiate probate proceedings. When an individual dies intestate (without a will), an administrator should be appointed. Sometimes, it’s clear who the administrator of an intestate estate will be. A surviving spouse generally has priority to be the administrator. However, what if there is no surviving spouse, or the surviving spouse doesn’t want to be the administrator? What if there is no surviving spouse and the children cannot agree on an administrator? Maybe the children live out of state and the decedent’s domiciliary state requires an administrator to be a resident of that state. Generally, intestacy requires a little bit more probate filing requirements than a testate estate. An intestate estate will almost always require probate proceedings if probate property exists, even if an administrator is difficult to identify. These circumstances can be challenging to maneuver; it’s a good idea to contact an experienced probate attorney to help navigate the uncertainty.
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