If you have been named executor or a trustee in an Ohio Probate or a Trust, you likely have many questions. One of the main responsibilities of this role is to act as a fiduciary, which means that you must always act in the best interest of the estate and its beneficiaries. In addition, if you make mistakes, you can be held personally liable to the estate and beneficiaries.
For example, Tim Trustee is the trustee of the John Doe Trust. John’s three children — James, Jimmy and Jill — are equal beneficiaries. The trust has assets consisting of two pieces of real estate and other assets totaling $5 million. Tim Trustee sells a $750,000 vacation home in Florida for $550,000 to a cash buyer.
James, Jimmy and Jill are furious about this, knowing that the home is worth $750,000. In addition, the real estate market skyrockets the following month and the home could have sold for $1.1 million.
If Tim Trustee would have researched the real estate market, hired a real estate professional and not sought a quick cash sale, the home would have sold for its true value. As a result, James, Jimmy and Jill sue Tim Trustee for $550,000 (the difference between $1.1 million and $550,000).
This action, if successful, would have subjected Tim Trustee to personal liability to replenish $550,000 in estate assets.
Responsibilities of a Trustee and Executor of Estate
Whether you are named as an executor or a trustee, the process of settling the estate is generally the same with the exception that in Ohio, the process will occur in the probate court.
In both scenarios, you will be required to gather the assets of the estate, inform the beneficiaries and keep the beneficiaries apprised of the status of the estate, and gather all the final bills and expenses. Further, you will be responsible for any necessary tax returns that may need to be filed on time including final income tax return, estate tax return and estate income tax return, if necessary.
In an Ohio Probate Administration, you will need to make sure you meet all the necessary court deadlines and file all the necessary legal pleadings timely and correctly. Further, you will need to appear in court at all required probate court hearings.
Accurate Recording of Transactions
The failure to keep an accurate record of all transactions is one of the most common ways that leads to issues with beneficiaries and claims by beneficiaries against the executor or trustee for estate mismanagement.
As an executor or a trustee, you will always want to:
• make sure that you put all creditors on notice.
• pay all the necessary, enforceable claims and bills.
• keep a detailed accounting of all the transactions in the estate administration.
Finally, after all the expenses have been paid, all the tax returns have been filed and paid, and all administrative requirements have been fulfilled, you may proceed with distributing the property of the estate to the beneficiaries.
For more information
As you can see, there are many ways in which mistakes can be made in the estate administration. Any mistake can lead to beneficiary claims against the executor or trustee for estate mismanagement. For this reason, we always recommend that you speak with a knowledgeable and experienced Trust and Estates Attorney regarding your responsibilities as an executor or trustee.
If you have questions about Trust and Estate Administration and what to do if you have been named as an Executor or Trustee in an Estate Administration, please contact our office at (513) 241-0400 or use our contact form to schedule a time to discuss how we can help you and your family through this process.
The attorneys at Aronoff, Rosen & Hunt, LPA are here to help you!