In the wake of the death of a loved one, many people’s gut reaction is to act quickly and start the process of “getting things done.” It is understandable to want to get the “business” side of death wrapped up quickly; it feels like a needed step to tackle the uneasy and inconsistent journey called grief. What most people fail to realize is that acting too quickly can harm the estate administration process and destroy possible assets. In fact, sometimes sitting back and doing nothing can save you from being unnecessarily required to pay a decedent’s debts.
In the state of Ohio, there is a period after an individual’s date of death called the creditor’s claim period. During this time frame, creditors such as medical, loan, and credit card institutions have six months from the date of death to produce a claim against the executor or administrator of an estate. If an estate has been opened with the probate court and a claim is received in writing by the attorney of that estate and/or the fiduciary of the estate before the six-month period has ended, the estate is required to pay the debt to the creditor (O.R.C. 2117.06). If the six-month period has expired or no estate has been opened, the fiduciary of an estate is not required to pay any claims made.
So, what do you do? Often, the best decision and the only thing to do is absolutely nothing. If no estate is opened with the court, then creditors have nowhere to file a claim. So, waiting for that six-month period to pass nulls the ability for creditors to present a claim that requires the estate to pay back the debt. Although it may feel counterproductive, sitting back and doing nothing for a decedent’s estate until that six-month period has come and gone can save you and your family valuable estate assets.
An important factor to evaluate when making the decision about whether or not to wait the six-month creditor’s claim period or to proceed with starting the estate process with the court is to calculate the total net value of the loved one’s estate, which is their assets minus their liabilities. An individual could have liabilities such as credit card debt, medical debt, or loans that would make waiting six months the only logical option. It is also important to note that even if you choose to wait the six months to open an estate, a creditor could make the decision to force open an estate with the probate court in order to claim the debt from the estate. This is an unlikely, but still plausible option for creditors to take.
There are many other things that could affect the outcome of an estate administration process, including the way the decedent’s assets are titled upon their death. In the end, it is always important to consult with your attorney before making any decisions after the loss of a loved one. Your attorney is here to help and wants to assist you the best way possible to ensure that as many assets as possible are preserved upon the death of your loved one.