People often think of the Ohio probate process as a means whereby a decedent’s property can be distributed to heirs and beneficiaries of the decedent in an orderly manner. While this is true, this understanding overlooks the fact that a decedent’s creditors must also have an opportunity to have their lawful claims satisfied before property is distributed to the heirs and beneficiaries. In certain cases (and depending on how – or whether – the decedent planned his or her estate), once the lawful claims of creditors have been paid, there may be very little “estate” left to distribute to heirs and beneficiaries.
Common Creditors Who File Claims in Ohio Probate Cases
In Ohio, Creditors generally have six months from the date of the decedent’s death within which to file a claim against the decedent’s estate. Those that generally do file claims include:
- State Medicaid recovery: If the decedent received any funds from Ohio’s Medicaid program during his or her lifetime, the Medicaid Recovery Administrator may seek to recover some or all of those funds from the decedent’s estate. Whether such a claim is actually filed is dependent upon each individual decedent’s estate: if the State believes the decedent’s estate is too small, for example, it may forego filing any claim. Medicaid recovery claims have a longer time within which they can be filed.
- Secured creditors: A secured creditor (whose claim is secured by collateral, such as a mortgagor), does not need to file a claim against the decedent’s estate unless the collateral would not fully compensate the secured creditor. For example, if a decedent owes a mortgagor $50,000 at the time of the decedent’s death but the real estate securing the mortgage is only worth $25,000, the mortgagor may seek to recover the difference from the decedent’s estate.
- Unsecured creditors: An unsecured creditor (such as a funeral home seeking payment for unpaid funeral expenses) may choose to file a claim against the decedent’s estate in order to recover compensation for unpaid bills and invoices. Unsecured creditors are generally paid last, after any claim by Medicaid and/or secured creditors are satisfied.
Creditors must adhere to the timelines set by law in presenting their claims. An administrator or executor may have a defense to a creditor’s claim that is untimely filed.
Seek Help in Managing the Claims of Creditors
Kryszak & Associates is available to assist administrators and executors of estates in Ohio handle the claims of creditors filed against their estates so as to best protect the assets of the estate. Our office is intimately familiar with the laws concerning the filing of various kinds of claims against an estate, and we will work with you to help ensure that no unlawful or untimely claims are paid. Kryszak & Associates’s Sheffield Village office can be reached at 440-934-5330. Contact us today to discuss your case with us right away.