Opinions and Legal Insights

In What Order Are Debts Paid In Ohio Probate?

The Ohio Revised Code sets forth the order in which debts are paid from an Ohio insolvent probate estate (when an estate has insufficient assets to pay all of its debts and expenses) by establishing ten classes of claims as follows:

  1. Costs and expenses of administration
  2. Funeral and cemetery expenses
  3. Support allowance for surviving spouse and minor children
  4. Debts entitled to a preference under the laws of the United States
  5. Expenses of decedent’s last sickness
  6. Funeral expenses ($4,001 to $6,000)
  7. Nursing home expenses
  8. Obligations to the State of Ohio
  9. Debts for manual labor
  10. Other debts

 

Ohio Revised Code § 2117.25 sets forth the order in which debts are paid in Ohio probate when the estate is insufficient to pay all of its debts and expenses.

Remember, debts must be properly presented to the court to be enforceable against the estate.  See Creditor Claims In Ohio Probate and Deadlines and Timelines in Ohio Probate.

Class 1 Debts In Ohio Probate: Costs And Expenses Of Administration

Class 1 debts in Ohio probate are paid first and include the fees of probate administration and court costs.  Attorney’s fees and fees for the executor of the estate are also part of this class.

Class 2: Funeral And Cemetery Expenses

Funeral expenses up to $4,000 and cemetery and burial expenses up to $3,000 are Class 2 debts in Ohio probate.

Funeral expenses include those that are included in the bill of a funeral director, and funeral expenses not included in the bill but that are approved by the probate court.

Burial and cemetery expenses are limited to:

  • The purchase of a right of interment;
  • Monuments or other markers;
  • The outer burial container;
  • The cost of opening and closing the place of interment;
  • The urn.

Class 3: Support Allowance For Surviving Spouse And Minor Children

Class 3 debts in Ohio probate include the support allowance for the surviving spouse and minor children of $40,000, which helps provide for the spouse and children during the administration of the estate.

Class 4: Debts Entitled To A Preference Under The Laws Of The United States

Class 4 debts in Ohio probate are debts owed to the federal government, such as overdue taxes.

Class 5 Debts In Ohio Probate: Expenses Of Decedent’s Last Sickness

Class 5 debts in Ohio probate includes the expenses of the decedent’s last sickness.  This generally includes the costs of the last hospital stay or payment of end-of-life caregivers.

Class 6: Funeral Expenses ($4,001 To $6,000)

Class 6 debts in Ohio again includes decedent’s funeral expenses, this time for any amount above $4,000 to $6,000.

Basically, if there are enough assets to pay the first five classes of debts, the funeral director can be paid an additional $2,000 toward any outstanding funeral expenses.

Class 7:  Nursing Home Expenses

Class 7 debt includes the expenses of the decedent’s last continuous stay in a nursing home, residential facility, or hospital long-term care unit.  Decedent’s last continuous stay includes up to 30 consecutive days during which the decedent was temporarily absent from the nursing home, residential facility, or hospital long-term care unit.

Class 8 Debts In Ohio Probate: Obligations To The State Of Ohio

Obligations owed to the State of Ohio are considered Class 8 debt in probate.

Obligations under this class include personal property taxes, claims made under the Medicaid estate recovery program instituted pursuant to section 5162.21 of the Ohio Revised Code, and any other obligations to the state or its subdivisions.

Class 9: Debts For Manual Labor

Class 9 debt in Ohio probate includes debts up to $300 to any one person for manual labor performed for the decedent within 12 months prior to death.

Class 10: Other Debts Owed

The final class of debts in Ohio probate is basically a catch-all provision for any other claims that do not fall within the first nine categories and which have been presented and finally allowed.  This class also includes any part of the funeral bill over $6,000 and manual labor claims exceeding $300.

No payments are made to creditors of one class until all those of the preceding class are fully paid or provided.  If the assets of the Ohio probate are insufficient to pay all of the claims of one class, the creditors of that class are paid ratably.