I recently met with a prospective client after the death of her father. During our consultation, I inquired as to why she or her sisters had not been in to the office several months earlier, since her father had died in March of this year. She replied that no one in her family wanted to be the Administrator of the estate for fear that they would be personally responsible for their father’s debts. This is not the first time I have heard this response.
In Ohio and in most states, an Administrator, survivor, or beneficiary is not required to pay for a deceased relative’s debts from their own assets, unless they are also liable on the debt or have guaranteed the debt. In Ohio, a creditor has six months from the date of debt to present a claim against the estate of a decedent. Ohio Revised Code Section 2117.06. states if there are insufficient assets in the estate of the decedent to pay all claims, the estate is determined to be insolvent.
Ohio law also spells out the priority or order in which the debts are to be paid in Ohio Revised Code Section 2117.25. Costs and expenses of the probate administration of the estate are the top priority, followed by funeral expenses, spousal/family allowances and lesser priority debts. The lowest priority debt under Ohio law generally includes all unsecured credit card debts.
If there are insufficient assets in the estate to pay the debts of a decedent, an Insolvency Proceeding (similar to a Bankruptcy Proceeding) is filed in the Probate Court. There are no statewide standardized procedures or forms outlined in the Ohio Revised Code. Each County generally has a local custom or rule. In Lucas County, the local rule is Rule 62.1.