One of the simplest ways to keep an asset out of probate is to title it in such a way that it is not subject to the probate process. In most cases, your access to or use of the asset won't change—only the way the asset is transferred after your death.
It's important to be aware of how using title to an asset can keep it out of Ohio probate, and the benefits and risks of transferring assets in this way.
In some cases, changing the way an asset is titled can be accomplished with minimal assistance. One example of this involves bank accounts. If you have $100,000 in a bank account in your name, and you want it to pass to your adult son after your death, you can go down to the bank and convert the account into a joint account, titled in both your names. When you die, your son will become sole owner of the account so long as survivorship rights are specified in the document creating the joint ownership. Brokerage accounts, like bank accounts, can be jointly titled.
Just remember, if your son becomes incapacitated or dies first, probate will likely be necessary. Also, even if you die first, probate will not be avoided upon your son's death unless the account is retitled at that time.
Slightly more complicated than retitling a bank account is the process of re-titling real estate. Property that is titled as joint tenancy with rights of survivorship (JWROS) passes automatically on the death of one joint owner to the other joint owner or joint owners, as there can be multiple owners.
Although the process of creating a JTROS is usually not complex, the danger of an inexperienced person unwittingly making an error in the deed makes it wise to have an attorney's help. This is especially true given that real estate is often one of the more valuable assets in an estate. Also, while JWROS does help real property avoid probate, there are serious risks associated with transferring property this way, which an attorney can explain more fully.
There is a price to pay for the ease of titling a financial account or parcel of property jointly. The joint owner is entitled to use of the asset. So if you name your son as joint owner on that $100,000 bank account, you cannot prevent him from going to the bank and making withdrawals for his own use.
Some assets, rather than being retitled, can be designated to transfer on death (TOD) or become payable on death (POD). This avoids the access to an asset that a joint owner would have, since they would have have a present interest in the asset only upon your death.
Bank, investment, and other financial accounts are perhaps the assets that most frequently have TOD/POD beneficiaries named for them, but vehicles can transfer on death as well. Not all states allow TOD beneficiaries for real estate, but Ohio does. Remember, though, that unlike other deeds, a TOD deed must be recorded prior to the owner's death in order to be viable.
It's very important to make sure that any TOD designations you have made do not conflict with your will. A TOD designation will supersede a provision in a will. If they conflict, you could leave less than you intended to some heirs, and more than intended to others. Also, assets that transfer on death may be subject to estate tax depending on a number of factors, including how your will is drafted. If you intend any of your assets to transfer on death, be sure your estate planning attorney knows about any TOD designations so that he or she can coordinate them with the rest of your estate plan.
A different, but common, approach is to create a trust and to title assets in the name of the trust. Upon death, assets held in the trust pass according to the trust's terms, but outside of probate. Advantages of this method can include being able to retain complete control over assets during your lifetime, having all assets under the same "umbrella," and having some say in how assets are managed or distributed after your death. Depending on the type and terms of the trust, you may be able to achieve tax savings or other benefits as well.
If you are interested in retitling assets in order to avoid probate, consult an experienced Ohio probate and estate planning attorney to explore mechanisms by which you can retitle assets.