Writing Wills and Trusts in Ohio 101
Ohio attorney Susan E. Wheatley covers the basics you should get to sooner rather than laterBy Beth Taylor | Last updated on May 25, 2022
Use these links to jump to different sections:
- What a Will Does
- The Benefits of Beneficiaries
- The Living Trust
- Business Sense
- Staying Out of Probate in Ohio
- Seeking Legal Help
Writing a will: It’s a chore many people plan to get around to “someday.” It’s not necessarily the most appealing task, and the terminology can seem daunting. Wills, probate, trusts—what exactly do they all mean?
What a Will Does
A will is fairly straightforward. “It’s a written declaration in which you direct how your property is to be disposed upon your death,” explains Susan E. Wheatley, an estate planning and probate attorney at Taft Stettinius & Hollister in Cincinnati. It can also name a guardian for any minor children.
“Wills have no legal effect until your death,” she says. “Everyone should have a will.” It names an executor, eliminating the need for the court to choose an administrator for your estate, and waives bond, which can be an added expense.
The Benefits of Beneficiaries
Any property passed along through a will must go through probate, which can be a lengthy process. However, assets that have assigned beneficiaries can be directly passed along, outside of probate. This includes IRAs, retirement plans and life insurance. Houses and accounts held jointly with rights of survivorship—usually with a spouse—also bypass probate.
“It is a common misunderstanding that wills control all property,” says Wheatley. “They do not.” If you leave a retirement account to one child in your will, for instance, but you name a different child on a beneficiary form attached to that account, the one listed on the beneficiary form will inherit the account.
“Those seemingly innocent beneficiary forms, which people typically forget they have, are actually the ‘will’ for that asset and must be reviewed and updated as circumstances change,” Wheatley says.
The Living Trust
Another option is to create a living trust. Assets titled to a trust before the owner’s death do not have to go through probate. You would still need a will, naming your trust as beneficiary in the legal document.
“A trust is an arrangement you make with someone you trust—the trustee—to convey property as you direct,” Wheatley says. “The trust can receive assets from many sources and manage them for children and other beneficiaries.
“For this to work, though, you must take steps during your lifetime to title assets to your trust or to designate assets as ‘transfer on death’ (TOD) or ‘payable on death’ (POD) to your trust.”
If needed, the trustee can manage assets for children or other heirs who need help handling money, such as those with special needs, or someone with a substance issue. Living trusts can also offer tax advantages.
“One situation where people should have at least a will is when they own a house and want to make specific plans for that house,” Wheatley says. “If a person wants a particular child to receive the house because that child has cared for the individual in the house, needs to be able to continue to live in the house, or has contributed to the cost of the house, the will can direct the house to that child. … If there is not a will, the house will pass to the next of kin, which would mean all children are equal owners and might dispute the handling of the house.” And if one child has died and has children, those children would own part of the house.
“This situation leads to ‘tangled titles,’ which can ultimately result in the loss of a house from a family when the deceased person intended to preserve it for a family member’s use,” she says.
Wheatley strongly urges business owners to have both trusts and wills. “The trust can hold business interests prior to death so the business does not pass through probate, which would require a publicly reported appraisal,” she says. “The trust can also specify who will receive the business, on what conditions, and can include tax planning.”
Staying Out of Probate in Ohio
Avoiding probate is particularly desirable in Ohio, which, unlike many states, requires a formal probate court proceeding except in relatively small estates. “This means that there will be expense and delay for probate proceedings that would not be necessary where assets bypass probate, such as through a trust,” Wheatley says.
Also, keep in mind that probate is a public proceeding. “In many counties,” she notes, “it is possible to look up a deceased person’s assets online.”
Lastly, Wheatley strongly recommends choosing someone to have financial power of attorney, so that they can act on your behalf if you become incapacitated. That person can access bank accounts to pay bills, sell a house if needed, and sign contracts. Otherwise, the court may have to appoint a guardian, which is a large expense that comes out of the incapacitated person’s assets.
Seeking Legal Help
An experienced estate planning attorney can guide you in writing a will, and in deciding whether your will is adequate or whether it is worth the extra planning to prepare a trust document. The lawyer can also help you name beneficiaries on insurance and retirement plans.
“Estates where the deceased person did not have a will,” Wheatley says, “can result in much more delay, confusion and contentiousness than estates where there is a valid will.”
For more information, see our estate planning and probate overview or reach out to a law firm for legal advice.
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