One of the chief reasons why people create estate plans and use vehicles such as wills and trusts is to protect and preserve their wealth for the benefit of their children, grandchildren, and other close individuals, entities, and causes. Some may be surprised, though, to find that mom’s or dad’s $1 million estate does not mean that $1 million passes to them. In fact, the value of the estate a person inherits might be less than the amount the decedent told the person the estate was worth.
Not Taxes, But Other Costs May Explain a Smaller-Than-Anticipated Estate
There has been no estate or inheritance tax in Ohio for several years now, but such taxes (even if they did exist) would account for only one of several costs or fees which would explain a smaller-than-expected estate. Some of the other more common expenses that can diminish the value of an estate include:
- Claims of creditors: People or companies to whom the decedent owed money at the time of his or her death may be able to file a claim against the estate for the outstanding balance owed. Not all creditors or claims will be allowed: some obligations, like credit cards and personal loans, may be extinguished upon the death of the obligor whereas others like tax debts cannot be extinguished but instead must be paid from the estate’s resources.
- Claims from the State: Moreover, if the State paid for medical expenses and/or nursing home expenses for the decedent, the State may attempt to collect some or all of the amounts it paid to the decedent from the decedent’s estate.
- Funeral and other final expenses: Unless a decedent had prepaid his or her funeral expenses or made other arrangements for payment, the executor of the decedent’s estate will be required to use the estate’s assets to pay for these final expenses. In some cases involving a lavish funeral or memorial service, these expenses can be quite substantial.
- Administration costs: Court costs as well as fees that are assessed in order to carry out the wishes of the court and/or the decedent. Even fees as small as $10 here and there can add up to a substantial sum if the orders of the court or the wishes of the decedent are complex and involve significant transfers of property and assets. In addition, if the decedent owned any land or real estate at the time of his or her death, the employment of appraisers and other professionals may be necessary in order to properly administer the estate. All of these expenses and costs will come out of the decedent’s estate.
- Executor’s costs: The executor is entitled to reasonable compensation for the time and effort he or she puts into administering the estate. If the probate process drags on for a significant period of time, then the fee the executor requests may be substantial.
- Attorney’s fees: The executor may require the advice and assistance of an attorney, especially in situations where the probating of the will has been challenged or there are other legal issues with the way in which the estate has been handled. For legal matters relating to the estate itself, any attorney’s fees will likely be paid from the estate.
When to Call for Help
If you have concerns about the size of your deceased loved one’s estate or believe that the executor has not been upfront and ethical about the manner in which he or she has handled the decedent’s estate, take action sooner rather than later. Speak with Dawes Legal, LLC: we will assist you in obtaining answers to your concerns and will do what is necessary to preserve the size of your decedent’s estate. Call Dawes Legal, LLC today at (614) 733-9999.