If you are considering creating an Ohio living trust, be aware that a revocable living trust can provide you with many advantages, but that they do have limitations. Trusts offer control, privacy, and flexibility that may not be available in other estate planning options.
Living Trusts in Ohio
A living trust in Ohio owns your assets during life and continues to own and distribute them after you die. The person creating a revocable trust is the grantor. As the grantor, you transfer ownership of your assets into the trust and the entire trust is then managed for your benefit during your lifetime. To maximize the benefits of the trust, it makes sense to place as many as assets as possible into the trust (some things, such as life insurance and retirement accounts, don’t qualify).
You will need a trustee who is responsible for managing the trust assets. You can select anyone you like, but it is common to simply choose yourself. You will also need a successor trustee who becomes trustee after your death. This successor has the responsibility of managing and protecting your assets and distributing them to the beneficiaries you name in the trust. One of the features of a revocable trust is that you can make any changes you wish to the trust during your life. An irrevocable living trust cannot be altered, ever.
A living trust Ohio allows you to avoid probate for any assets in your trust. Probate is a court process that is used to verify a will and put it into effect. This procedure can be lengthy and take months to complete. Ohio has not enacted the Uniform Probate Code, so its process is not simplified. Assets in a will cannot be distributed to your beneficiaries until the probate case is closed. A trust allows distribution immediately upon your death. Your living trust Ohio not only bypasses probate in Ohio, but also in any other states in which you own property that is included in your trust.
There are expenses involved with probate of a will that a trust avoids: your executor can collect a fee and there are attorney fees as well as court costs. If you leave behind a small estate (less than $40,000), you qualify for a streamlined procedure that is less expensive and is likely less costly than creating a trust.
Do I Need a Living Trust in Ohio?
In addition to avoiding probate, living trusts have other advantages that make them an attractive option. Trusts provide privacy for your family. Wills become public record when they are probated. Your trust will never go through probate and its terms remain private. No one will know who your beneficiaries are or what assets are in the trust. Trusts are also much more challenging to contest, so your wishes are likely to be carried out.
Creating a living trust in Ohio allows you to maintain control over your assets now and in the future, including after your death. During your life, you can do anything you want with your assets. Even though they are technically owned by the trust, you are in control of the trust and you can use, spend, give away and do whatever you wish with trust assets. After your death, your successor trustee will continue to manage your assets and will follow your instructions about distributing them to your beneficiaries. You can direct that the assets be kept in the trust for some time if you like and you can set dates for future distributions. Wills do not provide this option; distribution of assets in a will occurs immediately after probate.
Your revocable living trust Ohio Living Trust, Living Trust Ohio, Living Trust in Ohio, Creating a Living Trust in Ohio, Create a Living Trust in Ohio, Estate Planning, Revocable Living Trust, Irrevocable Living Trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. While a durable power of attorney can be rejected, a trust cannot be. Your financial life is protected by the trust.
Living Trusts and Estate Taxes in Ohio
While living trusts offer a lot of benefits, they do not help you avoid estate taxes. Ohio has no estate tax, but the federal government does, taxing estates worth more than $5 million. It is possible to avoid probate if you create a special trust known as a marital trust. In this type of trust (sometimes called an AB trust or QTIP trust), assets are passed from a deceased spouse to the surviving spouse without estate tax. Living trusts cannot protect assets from Medicaid. The law in Ohio is unclear as to whether creditors can enforce their claims against trust assets.
How to Create a Living Trust in Ohio
If you would like to create a living trust in Ohio, you create a written declaration of trust and sign it in the presence of a notary. To complete the creation of the trust, you must fund it by transferring assets to the trust’s name. Living trusts offer many benefits, but should be carefully considered before being entered into. A living trust may be a useful part of your future planning.
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