Probate vs. Non-Probate Assets in Ohio

Transferring property after someone dies can be a complicated and time-consuming process. Many people mistakenly believe that a Will is sufficient to transfer their assets. However, this is not always the most effective strategy. Understanding which assets are subject to probate court jurisdiction and which ones are exempt can help you prepare your estate plan, avoid probate, minimize tax liability, and simplify the asset transfer process for your loved ones.

What Is Probate?

Probate is the legal procedure of transferring assets from a deceased person to the individuals who are legally entitled to receive their assets. In Ohio, this process is overseen by the probate court. The probate court validates the deceased person’s Will (if they had one), appoints an estate executor or administrator, and supervises the payment of debts and taxes and the distribution of the deceased person’s assets. However, not all assets are subject to probate court jurisdiction.

What Assets Are Subject to Probate Court Jurisdiction?

In Ohio, the probate court has jurisdiction over a deceased person’s assets that are owned solely by the deceased person at the time of their death and do not have a designated beneficiary. Assets that are co-owned or pass directly to designated beneficiaries are not subject to probate court jurisdiction.

What’s the Difference Between Probate and Non-Probate Assets?

Many people mistakenly believe that all of their assets are subject to probate court jurisdiction after their death. In fact, the probate court only has jurisdiction over specific assets. This distinction is important when formulating your estate plan and to better understand the probate process.

What Are Probate Assets?

Probate assets are owned solely by the decedent. They do not have co-owners or a designated beneficiary. They are managed by the decedent’s personal representative and are distributed according to the terms of the deceased person’s Will, if they had one, or according to Ohio intestacy laws for individuals who died intestate, or without a Will.

Probate assets generally include:

• Real property titled solely in the name of the decedent or held as tenants in common
• Personal property, such as jewelry, furniture, and automobiles
• Bank accounts held solely in the decedent’s name
• Any interest the decedent had in a partnership, corporation, or limited liability company that is not addressed by the business entity’s succession plan
• Life insurance policies or brokerage accounts that list the decedent or the decedent’s estate as the beneficiary

What Are Non-Probate Assets?

Non-probate assets have a co-owner, beneficiary, or transfer on death (TOD) or payable on death (POD) designation. Jointly owned assets transfer to the co-owner(s). Assets with a named beneficiary transfer to the beneficiary, not according to the terms of the Will.

Non-probate assets generally include:

• Property held in joint tenancy or as tenants by the entirety
• Bank or brokerage accounts with payable on death (POD) or transfer on death (TOD) beneficiaries
• Life insurance or brokerage accounts that list someone other than the decedent or the decedent’s estate as the beneficiary
• Property held in a trust
• Retirement accounts with listed beneficiaries

Why Is Understanding the Difference Between Probate and Non-Probate Assets Important?

Understanding the difference between probate and non-probate assets is crucial for estate planning and navigating the probate process. Whether an asset is subject to probate court jurisdiction affects when and how it is transferred, the speed, cost, and complexity of distribution, and whether the asset transfer will remain private.

Asset Titling as Part of Your Estate Plan

Asset titling is an important piece of estate planning. The way an asset is titled can determine whether it needs to pass through probate.

For example, suppose you own your home with your spouse as joint tenants with a right of survivorship. Upon your death, the home will be treated as a non-probate asset and ownership will transfer immediately to the surviving spouse. Similarly, a retirement account that names your child as a beneficiary is a non-probate asset that transfers immediately to your child at the time of your death.

While many people view asset titling and beneficiary designations as an afterthought, these choices are an important aspect of a comprehensive estate planning strategy that can be used to avoid probate.

Do You Need a Trust as Part of Your Estate Plan?

A trust is another estate planning tool that can be used to avoid probate. A trust is a legal arrangement in which the trustmaker transfers assets to a trustee who holds and manages them for the benefit of a third party, called the beneficiary. Unlike a Will, which must be admitted to and approved by the probate court, assets placed in a trust are not subject to probate court jurisdiction and transfer according to the terms of the trust.

Different types of trusts are better suited to each situation, and an estate planning attorney can advise you on the estate planning strategy that best suits your needs.

How an Estate Planning Attorney at Gudorf Law Group, LLC, Can Help

Understanding which assets pass through probate and which ones do not can help you understand your options as you consider your estate plan. The estate planning attorneys at Gudorf Law Group, LLC, can evaluate your situation, provide legal advice and guidance, and create a comprehensive estate plan to help your family navigate the probate process and transfer your assets according to your wishes. We will work to minimize estate taxes, preserve your legacy, and ensure your wishes are honored.

Contact Gudorf Law Group Today

Gudorf Law Group is located in Dayton and serves clients throughout Ohio. Contact us today to schedule a consultation to discuss your situation and how we can assist you.