What Is Release Of Administration?
What is Release of Administration? How does it work? When does it apply? What is it in comparison to full administration?
In Ohio, we have two processes, which we can navigate through the Probate Court.
First Process - Full Administration:
The way a full administration works is an estate gets opened up, someone gets appointed as an administrator. Normally, about 90 days after the appointment of the fiduciary, will the estate be opened up. A fiduciary is appointed first. About ninety days after that (approximately 6 months), you have to file an inventory or accounting and appraisal of the estate and the assets that the estate has.
From there the probate court categorizes or catalogs all the bills and then they decide which bills get paid with fiduciary's help. Once that is completed, you can get a court order to distribute the assets. You file an inventory to say these are the assets that the fiduciary had in their possession and these are the assets that had been distributed.
Ultimately, the estate gets closed. Typically, that takes about twelve to thirteen months. Some estates have taken longer than that typically because some third party is in litigation or something had gone wrong to extend or prolong the process.
Second Process - Release of Administration is a streamlined process:
With the full administration, you are looking at a timeline of nine to twelve months before the estate could be closed. But for the release of administration, it's almost instant. Typically, we open the estate on a Monday, and by Monday a week later or maybe two weeks later, you'll have the estate closed.
It is a VERY technical process to qualify for the release of administration. There are two main kinds of groups or classifications.
Group 1: We have the surviving spouse being the first and the assets have to be less than a hundred thousand dollars. If all the assets are going to those surviving spouses, and the estate is less than a hundred thousand dollars, then the estate qualifies for a release of administration.
Group 2: The other option would be if the estate is thirty-five thousand dollars or less. Now if it's thirty-five thousand dollars or less, and it doesn't matter that it's not the surviving spouse, it can go to the children or any next of kin and can qualify for a release of administration.
Note: Another one that does get used or employed is when there's real estate only. It could qualify for Release of Administration.
Drawbacks to the Release of Administration:
When you do a release of administration, you were essentially telling the Probate Court that your
loved one who's passed away only had this, this, and these assets.
It was such a small amount of assets that you knew exactly how much the assets were worth and you're asking the probate court to transfer them to the next of kin. The probate court is not going to get involved with the inventory, accounting, and creditor claims in a release of administration. What they are going to do is review the itemized list of the assets, and then you'll get a court order to transfer those.
One issue that we often see when it comes to Release of Administrations is that you have to be very specific.
Example:
If your loved one had a bank account and that bank account had say $5,494.00 in it, the documents have to say exactly that. Most banks will reject a court order that says to transfer a different amount to a specific person because the amounts aren't right. And in those scenarios, you have to go back to the probate court and ask them to reissue the documents.
Therefore, the release of administration doesn't include what is called the “magic key”. When you get a full administration, you get the “magic key” to be able to go and open up any bank account, any IRA, life insurance policy any asset that had your deceased loved one's name on it. You have the magic key to gain access.
With the release of administration, you don't get the magic key. It's just a court order to transfer.
Littlejohn Law is here for you to answer any questions you may have. If you are not sure which release your family qualifies for, give us a call today at 740-346-2899.
Littlejohn Law, LLC
The Real Estate and Probate Law Firm
352 Main Street
Wintersville, OH 43953
www.littlejohnlawllc.com
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“Remember, where there's a Will, there's a way, and where there's no Will, then there's probate”
