Avoiding Probate in Ohio
The process of transferring a deceased person’s assets to those due to inherit them is known as probate. Unfortunately, this is typically a long and complicated legal process, often taking up to a year to complete. While dealing with the grief and loss of a loved one, the stress of the probate process can be extremely challenging for the family. It can also become exceedingly expensive. Because of this, many people wish to avoid the probate process altogether, and there are ways to do this. But how this is done depends on the specific probate laws of each state.
In this article, we look at how to avoid probate in Ohio. We will discuss the probate laws in place, the different options available for avoiding it, and how a probate attorney can minimize the percentage of assets that are subject to probate court oversight.
How Do You Avoid Probate in Ohio?
Generally speaking, all assets that an individual owns will be subject to a lengthy, expensive, and stressful probate process. However, avoiding the probate process in Ohio can be done by naming a beneficiary for each of the assets owned prior to death. A beneficiary refers to the person who will be inheriting the assets upon the death of the current owner. As this needs to be stated before someone dies, avoiding probate requires a little forward thinking and thorough estate planning. You will need to decide who you want to pass your assets on to and get all the relevant documentation in place.
In Ohio, there are four different ways to name beneficiaries for your assets and avoid probate. Which option is best suited depends on the asset you are trying to cover, whether you want to retain sole ownership of the asset while you are alive, and the amount of time you have to put them into place. Here is a closer look at the four different options available in Ohio:
1. Living Trusts
One way in which you can avoid probate is by setting up a living trust. A trust document is similar to a will and is designed to protect your assets during your lifetime, but is also effective in avoiding probate in Ohio. The trust document essentially names a beneficiary to take over from the trustee following their death. This person is known as the “successor trustee” and assets will be transferred privately to this individual as per the trust agreement, thus avoiding probate court. This person may be your spouse, children, or any other named individuals. The owner of the assets becomes the “principal beneficiary” and they retain full control of the assets while alive.
A living trust can be set up for many different types of assets, be that real estate property or land, bank accounts and cash equivalents, and personal property. Putting your most valuable assets into a living trust makes sense as this offers the most comprehensive protection. However, setting up a living trust will only be an effective solution at avoiding probate if it is done correctly, and it is a legally binding document that takes a while to complete. For that reason, it is best left to a probate attorney. This is also the avenue that requires the most effort, but is great for anyone with multiple valuable assets and effectively bypasses the complex legal probate process.
2. Joint Ownership
Joint ownership also works as a way of avoiding the probate process in Ohio. When an asset is jointly owned and one of the owners dies, the other surviving person automatically owns the asset outright. This is down to the “right of survivorship” as detailed in the Ohio Statute 5302.17. In these cases, as the asset is automatically transferred, no probate process is required. This is a great option for anyone who is looking to own an asset jointly, but not a great choice for people that want to retain complete control of their property.
In Ohio, there are two types of joint ownership: joint tenancy and tenancy by the entirety. The former is for any couple, be they married or not. This couple can acquire an asset such as real estate, bank accounts, or other valuable personal property in joint names. Each person owns an equal share and becomes a joint tenant. On the other hand, tenancy by the entirety is exclusively for married couples and only covers real estate. When one of the partners dies, the property will be transferred to the surviving spouse. Unfortunately, this type of joint ownership cannot be made now, but any that were made between February 9, 1972, and April 3, 1985, still withstand and will avoid probate court oversight.
3. Transfer on Death Deeds
Many assets can also be transferred using a Transfer on Death (TOD) designation. This allows beneficiaries to receive the assets directly at the time of the death without having to go through the probate process in Ohio. You can put Transfer of Death deeds on multiple assets, including real estate, vehicles, stocks and bonds, and other investment assets. This is often a preferable option for people as they are much simpler to create when compared to wills and trusts and require minimal paperwork. Many investment and retirement savings accounts are also often TOD to begin with, but it is relatively straightforward to transfer a normal account into a TOD.
Transfer of Death deeds also not only state who the beneficiaries are, but also what percentage of the assets each individual will be receiving. While these people are named in the TOD, they have no ownership or control over the assets while the person is alive, as per Ohio Statute 5302.22.
4. Payable on Death Deeds
Similar to a Transfer on Death is the Payable on Death (POD) provisions, also known as a Totten trust. These essentially work in the exact same way, but can only be placed on bank accounts rather than on a range of asset types. A Payable on Death agreement is put in place between the account holder and a credit union or bank, stating who the beneficiaries are. At the time of death, the money in the accounts will be directly inherited by the individuals stated in the deed. As with TOD deeds, POD provisions don’t grant any of the beneficiaries access to the bank accounts while the account holder is alive. However, they are another successful way to avoid probate in Ohio.
Conclusions
Avoiding probate in Ohio is possible. To do so requires estate planning to determine how the assets will be passed on to the next generation and naming beneficiaries for all bank accounts, real estate, and personal property. This way, the probate process can be bypassed as the assets are all automatically transferred to the relevant people in the event of death.There are four main ways to do so, all of which should be done by an estate planning attorney or probate lawyer who knows Ohio probate laws. You can either jointly own assets which will then automatically pass to the surviving owner, or name beneficiaries in a living trust, Transfer on Death, or Payment on Death. Even if not wanting to cover all your assets, avoiding probate on some of them will still drastically reduce the time and cost of the process.
