When you die, someone must carry out the task of collecting and distributing your property. The process is known as probate, and the person you name in your will to be in charge of administering probate is known as the executor. Although the amount of work involved in a probate proceeding can vary, executors in Ohio are entitled to compensation from your estate for their services, and this compensation is based on the total value of your property.
Your executor has several important duties as part of the Ohio probate process, including locating and safeguarding all of your property, and collecting on any debts due to the estate. The executor must also determine and contact all persons entitled to receive the estate property, resolve all creditors' claims, and pay outstanding taxes before distributing any assets. These steps can be time consuming and typically involve the preparation of various legal documents, attendance at court hearings and engaging the services of other professionals, such as attorneys and appraisers.
Executors serving in Ohio are generally entitled to compensation for their services. Under state law, the amount of executor fees is based on a flat percentage of the value of your property. The exact percentage depends on a few different factors, such as the value or your assets and whether the executor must sell the assets or simply passes them to your beneficiaries.
Rate of Compensation
If your executor sells personal property and real estate, he receives 4 percent of the first $100,000 in value; 3 percent of the next $300,000 in value; and 2 percent of the remaining value. By contrast, if your property is not sold through the probate but rather passes to your beneficiaries, the executor is entitled to 1 percent of the fair market value of the assets. In addition, if any of your non-probate assets are subject to state taxes, an executor is also entitled to 1 percent of the value of those assets.
In addition to being entitled to compensation based on the value of the your property, Ohio law allows a probate court to order reimbursement from the estate for actual and necessary expenses associated with administering the estate. These expenses might include postage, payment of reasonable attorneys fees, and funeral and cemetery lot costs. Also, the court can order an additional allowance for any extraordinary services performed by the executor. These services might include defending the estate in litigation or tax disputes, or drafting the required documents for the sale of real property.
Effect of Performance
Your executor is always required to act in the best interest of the estate and refrain from putting his personal interest above the individuals that stand to inherit property. This is known as a fiduciary duty, and the court may deny or reduce compensation to any executor who has been determined to have discharged his duties inappropriately. Also, an executor can be personally liable for financial losses to the estate based on breaches of this duty. For example, suppose the executor decides to sell real estate without getting an appraisal, resulting in a sales price well below the fair market value. In this case, the court might deny compensation and require the executor to personally cover any loss.
Wayne Thomas earned his J.D. from Penn State University and has been practicing law since 2008. He has experience writing about environmental topics, music and health, as well as legal issues. Since 2011, Thomas has also served as a contributing editor for the "Vermont Environmental Monitor."