Inheritance advances

by | Nov 17, 2017 | estate planning, Firm News

A grandson borrows money from his grandmother. A daughter accepts a family heirloom necklace from her parents. A son receives his father’s 1967 Mustang for his 16th birthday. All of them are advised, jokingly or otherwise, “This is coming out of your inheritance.” Is this statement true? Can it, in fact, be held by a Probate Court that an heir has already received a portion of his or her inheritance?

Section 2105.051 of the State of Ohio Probate Code declares that this can be accomplished in one of two ways. First, any property given during a person’s lifetime may only be considered an inheritance advancement if declared in contemporaneous writing. This means that the intent should be in writing from the time frame of the exchange. For instance, the son in the above example cannot accept the Mustang on his 16th birthday, then present the Probate Court with a document of intent dated 20 years later.

The second way an inheritance advancement can be accomplished is by written acknowledgement of the heir. In other words, the person receiving the property may present a written statement that it is accepted as a portion of his or her future inheritance from the decedent.

If a dispute were to arise between heirs as to the value of advanced property, the valuation would be determined based on the value on the date it was received by the heir, or the date of the decedent’s death, whichever comes first.

Unless specifically addressed in the written statement, if the heir receiving the advance becomes deceased prior to the giver, the property goes back into the estate of the original giver.

These matters can become increasingly complex depending on the size of an estate and number of rightful heirs. It is often helpful to consult an estate planning attorney to assist in probate administration.