Living trust is an arrangement, by which you can direct how your property will pass over to your survivors. It’s an easy way to bypass probate, and even helps in reducing or eliminating the federal estate taxes for an individual’s estate.
A living trust is a statutory agreement by which an individual (the trustee) can hold the legal title to a property for another individual who has been named as the beneficiary to the trust. You can act as the trustee for your own living trust, and thus have full authority over the property retained in the trust.
The trust is called ‘living’ simply because it’s created while the individual or the property-owner is still in living condition. That is very unlike the trust created after an individual’s death, according to the provisions in his or her Will.
The Uniform Probate Code is not used in Ohio, which complicates the probate procedure in the state. You can avoid the complex and time-consuming probate procedure with the help of a living trust, and thereby relieve your family or the beneficiary of the undue expenses and delay of the court proceedings.
A living trust can be a replacement for a will, though only to some extent. You will always need a will, in spite of having a living trust. The will supposedly acts like a back-up plan to a living trust, especially if new properties are acquired after the trust had been made. In case you forget to include the new property to your trust or want to leave it for some other individual who hasn’t been named in the trust, you can do it with the help of the Will.
In case you don’t have a will, the Ohio state laws will determine which of your closest relatives will get the property that doesn’t make into your trust or isn’t distributed even through other methods.
Not every form of living trust will be able to help you, if you want to reduce your estate taxes. A simple living trust meant to avoid probate, will have no effect on the federal estate taxes. Those with valuable assets can reduce their federal estate tax bills though, with the help of complicated form of living trusts like an AB trust. However, most people won’t need to worry about the federal estate taxes since it’s only applicable on estates worth more than $5 million.
Three simple steps can help you prepare your own living trust in Ohio, as mentioned below: