If you recently lost a loved one, complicated legal and financial processes are the last thing you want to deal with. But when a loved one passes away, that may be exactly what you and your family will need to do.
After a loved one’s death, the person’s estate must be submitted to the probate court. The probate process can be expensive, time-consuming, and complicated. But an Ohio estate planning and probate lawyer can use a variety of planning and asset management strategies to help people avoid probate.
What is Probate?
Probate is the legal process of administering a person’s estate after their death. If a person had a Last Will and Testament when they died, the probate court will need to determine whether the Will is valid. The probate court will then follow the instructions in the Will regarding the appointment of an executor, the payment of the deceased person’s final debts and taxes, and follow the instructions in the Will about how any remaining assets will be distributed.
If a person dies without a Will, they are said to have died intestate. When this happens, Ohio intestacy laws take over and specify how property will be distributed. The laws of intestacy are still carried out under the supervision of the probate court.
Does a Will Avoid Probate?
A Will does not avoid probate. If the deceased person had a valid Will, the probate judge will review the Will to ensure that it is valid and properly executed. The estate executor will then administer the estate according to the instructions in the deceased person’s Will.
How to Avoid the Probate Process in Ohio
Probate can be an expensive and time-consuming process. An Ohio estate planning lawyer can use estate planning tools like trusts, beneficiary designations, transfer or payable-on-death designations, and other asset management strategies to minimize the assets that will pass through probate.
One of the most common ways to avoid probate is by using a trust. A trust creates a separate legal entity that owns your assets and is managed by a trustee. By naming yourself as the trustee of a living trust, you can still manage the assets that have been placed in the trust. When the initial trustee dies, a Successor Trustee is appointed who will ensure the terms of the trust are followed and trust assets are distributed as directed in the trust.
Do I Need a Trust to Avoid Going to Probate Court?
A trust is one way to avoid probate. Assets placed in a trust will be transferred according to the terms of the trust and will be distributed without review by the probate court.
A trust establishes a fiduciary relationship between the trust-maker and a trustee. The trustee manages assets placed in the trust on behalf of a third party, known as the beneficiary.
In some cases, the trust-maker, trustee, and beneficiary are all the same. When the trust-maker dies, a successor trustee manages trust assets for the benefit of the beneficiary. A trust can be used in this way to transfer assets without the need for probate approval.
Unlike probate, which is a public process, assets passed through a trust are not public record, remain private, and are not subject to probate court review.
Other Ways to Avoid Probate in Ohio
You can also avoid probate by using joint ownership, transfer on death, and payable on death designations.
If you jointly own an asset with someone else, ownership of the joint asset will automatically transfer to the other person when you pass away. This is called a right of survivorship and means that property that is owned jointly will be transferred without the need for probate court oversight. Of course, there will be some paperwork required to show that one owner died and that the property is now owned solely by the survivor, but the asset will pass without probate court review.
Payable on Death (POD)
You can designate many accounts as payable on death (POD). This designation is common with checking and savings accounts, and other retirement assets. By using a POD designation, you name a beneficiary who will receive the asset when the original owner dies.
Transfer on Death (TOD)
You can also use a transfer on death (TOD) designation for brokerage accounts, real estate, and vehicles. If you register an investment account as TOD, the beneficiary will automatically inherit the account upon your death and the asset will not pass through probate. Similarly, you can use a transfer on death affidavit to automatically transfer real estate or vehicles upon your death. Assets designated as TOD will not need to pass through probate court.
Should You Try to Avoid Probate?
Probate is not inherently a bad thing. However, it is still a good idea to avoid probate to the extent that you can. An experienced estate planning attorney can use a trust and other planning strategies to minimize the assets that are subject to probate court oversight.
If you need assistance avoiding probate, the lawyers at RKPT can help. Contact us today to learn more about our estate planning and estate and trust administration services. From our offices in Cincinnati, we serve clients throughout Ohio and are dedicated to helping you plan for your family’s future.