Dear Blake: My mom never did any estate planning. When she passed away last year, I took care of her estate. With my brother and sister living outside of Ohio, it made sense for me to take the lead on that. I didn’t expect the probate process to take so long. Between going through my mom’s things, preparing the court documents, and getting signatures from my siblings, the estate didn’t close until well into this year. My wife and I created wills after my mom died. I don’t want my wife or kids to go through the probate process. Since my wife and I created wills, probate won’t be necessary, right? Is there anything else that my wife and I should do to avoid probate? Sincerely, A Future-Minded Father
Dear Future-Minded Father: Unfortunately, it is a common misconception that creating a will allows your estate to avoid probate under Ohio law. Your will can appoint an executor, the person that will administer your estate, name guardians for your minor children, and determine to whom your assets will be distributed. Creating a will can speed up the probate process, but the will still needs to be submitted to the probate court for administration.
Two examples of how a will expedites the probate process are authorizing the sale of real estate without needing consent from next of kin and dispensing with a fiduciary’s bond. In the probate context, a bond is a financial guarantee that an executor or other fiduciary will obey Ohio law and administer the estate responsibly.
If you and your wife would like to avoid the probate process, I would recommend considering a few options first.
Joint Titling of Property
Certain types of property can be jointly titled. Banks accounts are one example. If two individuals open a joint bank account, the survivor would become the sole legal owner of the account upon the death of the first owner. This is true even for bank accounts held by two people that are not married.
Real estate can be titled in a way that allows for joint ownership as well. If two people purchase a home and accept title on the deed joint with right of survivorship, the survivor would take title to the property at the death of the other owner after recording of an affidavit with the county of record. Owning property jointly is one option to avoid probate that works particularly well for married couples.
Transfer on Death Designations for Property
Transfer on death designations, also called payable on death designations, are an alternative option to joint property ownership to avoid probate. Ohioans can add beneficiary designations to bank accounts, investment accounts, real estate, and vehicles. Banks and account administrators can assist account holders with adding payable on death designations. For real estate and vehicles, Ohioans would file documents with the county recorder where the real estate is located and the bureau of motor vehicles respectively. Any property that has been tagged with a transfer on death designation will not require probate. Transfer on death designations linked to individual personal property items or accounts, so separate designations must be made for each piece of property. A forgotten account or personal property item without a designation would still require probate.
Creating a Revocable Trust
Creating a revocable trust is a third option for avoiding probate. “Revocable” refers to the fact that the creator of the trust, often called the “grantor” or “settlor,” can revoke or modify the trust at any time during his or her life. Typically, the grantor is also the trustee, meaning he or she would manage the trust assets. Assets transferred to a revocable trust before the grantor’s death avoid the probate process entirely. A trust can also be combined with transfer on death designations to move property to the trust at the grantor’s death.
Revocable trusts have other advantages as well. First, administration of a revocable trust is private whereas probate estate proceedings are public record. Second, revocable trusts provide more control over how the assets are distributed. For example, distributions from a trust can be restricted based on the purpose of the distribution or the age of the beneficiary. Finally, a revocable trust can assist in planning for incapacity. A successor trustee you name can step in almost immediately to manage your assets in the event you are unable to do so.
Administering a probate estate is a costly and time-consuming process that can delay the decedent’s family accessing assets, but working with an estate planning and probate attorney to implement an estate plan could make probate wholly unnecessary.
For more information on steps you can take to avoid probate, or to seek counsel from our Trusts & Estates practice group, please request a consultation or call us at 216-696-1422.
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The information contained in this blog post is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.
