Changes Affecting Ohio Probate and Estate Administration
Kegler Brown Estate Planning + Probate Newsletter March 1, 2004
Governor Bob Taft recently signed House Bill 51 amending various probate and estate administration statutes. The scheduled effective date is April 7, 2004.
Statute of Limitations on Claims
The most dramatic change is a reduction in the statutory time period for presenting a claim against an estate from 12 to 6 months. For decedents whose date of death is after April 7, 2004, Ohio Revised Code §2117.06, as amended, provides that "[a]ll claims shall be presented within 6 months after the death of the decedent. A claim not presented within 6 months after the death of the decedent shall be forever barred as to the parties."
Generally, claims are required to be presented in one of two ways. First, if an executor or administrator has been appointed and the estate is not "closed," a claim shall be presented: 1) to the executor/administrator in writing; 2) to the executor/administrator in writing and by filing a copy with the probate court; or 3) in a writing addressed and sent to the decedent, which is timely received by the executor or administrator. In the alternative, when the estate is closed (but the 6 month time period has not expired), a creditor shall present the claim, in writing, to the distributees of the estate who may share the liability for payment of the claim.
When a distribution of assets is made prior to the expiration of the 6 month time period, notice shall be provided to all distributees that they may be liable to the estate if a claim is timely presented prior to "closing" the estate. The distributees may also be liable to the claimant directly if the claim is presented after "closing" the estate but otherwise within the 6 month statute of limitation. Only a distributee who has received timely notice of a claim will have any liability (footnote 1).
Ohio Revised Code §2117.12 provides that in the event a claim is disallowed, an action (generally based on contract) must be commenced in a court of competent jurisdiction within 2 months after rejection.
The aforementioned changes were made to bring the claims statutes in line with Ohio law requiring that most probate estates (with assets less than $338,333.00) be concluded within 6 months of commencement. The scope and effect of the reduction of the claims period is yet to be seen. However, beneficiaries may still be liable for a decedent's debts when claims are timely presented to either the fiduciary or directly to the beneficiaries.
Spousal Waiver of Citation to Elect
The second change implemented by House Bill 51 is that a surviving spouse may now waive notice of the issuance of the citation to elect under or against the will. Previously, a surviving spouse was required to be served, by certified mail, a letter from the Probate Court explaining their rights as a spouse and that any applicable elections must be made within 5 months of the appointment of the fiduciary. Understandably, this "citation" was upsetting to many spouses who were still grieving the loss of a loved one and were forcibly reminded by the Court that some tough decisions remained to be made. By waiving issuance of the citation to elect, the spouse signs an acknowledgement that he/she has received a general description of their rights and does not need to be sent the citation by certified mail.
Certificate of Notice of Probate
The final substantive change of House Bill 51 is to clarify that, in estates where a fiduciary is not appointed (e.g., taking advantage of the Ohio release from administration statutes for small estates), the requisite "notice of probate of will" and "certificate of service of notice of probate" are filed within 2 months after formal admission of the will. Previous law was somewhat unclear about the timing of notice to be issued to beneficiaries of estates where there was no fiduciary formally appointed.
Each of the aforedescribed amendments was made with hopes of streamlining the probate process and bringing estate administration procedures in line with the substantive changes implemented by the Probate Reform Act of 2001.
1 Personal liability is limited to the lesser of 1) the amount the distributee received, reduced by amounts previously returned; or 2) the distributee's proportionate share of the claims finally allowed.