Detailed Answer
This article explains how sale proceeds are handled in Ohio when a person dies without a will (intestate). It assumes no special facts beyond a decedent who owned property that was sold either before or after death and who left no valid will. This is a general, plain-English overview — not legal advice.
1. The sale proceeds are part of the decedent’s probate estate
When someone dies intestate in Ohio, money received from the sale of the decedent’s property becomes an asset of the probate estate. The personal representative (called an administrator when there is no will) collects estate assets, pays debts and administrative costs, and then distributes what remains to heirs under Ohio’s intestacy rules.
Ohio’s statutes that govern probate administration and intestate succession are found in the Ohio Revised Code; see the statutes on intestacy and administration for details: Ohio Rev. Code Chapter 2105 (Intestate succession) and Ohio Rev. Code Chapter 2117 (Administration and distribution).
2. Who handles the proceeds?
If there is no will, the probate court appoints an administrator (usually a close relative or creditor). The administrator must:
- collect and safeguard estate assets (including sale proceeds);
- identify and notify known creditors;
- pay valid debts, funeral expenses, taxes, and probate costs;
- file an accounting and, after resolving obligations, distribute the remainder to heirs according to Ohio law.
3. Order of payments before heirs receive anything
Before distribution, the administrator must pay:
- reasonable funeral and burial expenses;
- outstanding taxes tied to the decedent;
- administration and probate court costs;
- valid creditor claims (subject to Ohio procedures and time limits).
If sale proceeds secure or pay off a mortgage or lien on the property, those amounts come off the top before the funds are available for distribution.
4. How the remainder is distributed
After satisfying expenses and creditor claims, the remaining money is distributed under Ohio’s intestate succession rules. Generally the distribution pattern is:
- If a surviving spouse and no surviving descendants, the spouse often receives the entire estate.
- If a surviving spouse and children, the estate is divided among them under Ohio’s statutory scheme (spouse shares vary depending on whether all children are from the spouse).
- If no spouse or descendants, the estate passes to parents, then siblings, and so on, following statutory priority.
For specifics about who inherits and what share they get, consult Ohio Rev. Code Chapter 2105.
5. Common practical scenarios
Scenario A — House sold after death during probate: The administrator sells the house on behalf of the estate. Proceeds go into the estate account. Mortgages and sale costs are paid first. After debts and taxes, the rest is distributed to heirs under the intestacy statutes.
Scenario B — House sold before death, seller died before collecting funds: If sale proceeds were not yet distributed and belong to the decedent at death, they are estate assets and handled in probate the same way.
6. Small estate procedures and exceptions
Ohio provides simpler procedures in some small-estate situations or for transferring personal property directly to a surviving spouse/next of kin without full administration. These rules vary by type of property and dollar thresholds. For example, certain personal-property transfers and affidavits may avoid formal administration in limited cases. See the Ohio statutes and local probate court rules for details: Ohio Rev. Code Chapter 2117.
7. Potential complications
- Disputed heirs or multiple claimants may lead to litigation or a court-ordered partition or distribution.
- Creditors may assert claims against proceeds — unresolved creditor claims can delay distribution.
- Real estate sold subject to liens, mortgages, or claims (including federal or state tax liens) will require those liens to be paid out of the sale proceeds.
- If someone believes they have a superior property interest (title issues, joint ownership, or beneficiary designations), the probate court may need to resolve the dispute.
8. What to do if you are an heir or interested party
- Contact the probate court in the county where the decedent lived to learn whether a probate case has been opened and who the administrator is.
- Request the estate inventory and accounting once available.
- If you are a creditor, file a claim within the time limits set by Ohio law and the probate court.
- If you are named as an heir but the administrator won’t distribute or you suspect mistakes, consult a probate attorney to review your rights and options.
Because probate rules, time limits, and small-estate thresholds are technical, the administrator should follow the court’s procedures or get legal guidance to avoid personal liability for improper distributions.
Disclaimer: This is general information about Ohio law and does not constitute legal advice. For advice about a specific situation, consult a licensed Ohio probate attorney.
Helpful Hints
- Keep records: If you are an administrator, keep detailed records of all receipts and disbursements, including sale proceeds and lien payoffs.
- Check title and lien status early: Before completing or closing a sale, verify mortgages, liens, and tax claims that could attach to proceeds.
- Open an estate bank account: Deposit sale proceeds into a separate estate account to avoid commingling and simplify accounting.
- Communicate with heirs: Early, clear notices to likely heirs and creditors can reduce disputes and delays.
- Ask the probate court about simplified procedures: Smaller estates sometimes qualify for shorter or affidavit-based transfers; the court clerk can explain local practice.
- Consider professional help: If the estate has significant assets, liens, or contested claims, a probate attorney can reduce the risk of errors and personal liability for an administrator.