One of the primary advantages of a living trust is the ability to avoid probate. In Ohio, the probate process can be quite lengthy, often taking several months or even years to complete. By creating a living trust, you can save your loved ones the hassle of navigating the probate court and ensure that your assets are distributed efficiently.
Another benefit of a living trust is the ability to maintain privacy. Unlike a will, which becomes a public record upon filing with the probate court, a living trust allows for the transfer of assets in a private and confidential manner. This can be particularly beneficial if you have concerns about sensitive information becoming publicly available.
A living trust also offers provisions for incapacity planning. If you become unable to manage your affairs due to illness or disability, the successor trustee named in your living trust can step in and manage your assets on your behalf. This can provide peace of mind, knowing that your financial matters will be handled according to your wishes even if you're unable to do so yourself.
Unlike other estate planning tools, a living trust offers significant flexibility and control over your assets. You have the ability to make changes to your living trust as needed, such as adding or removing assets or changing beneficiaries. This can be particularly advantageous if your financial circumstances or family dynamics evolve over time.
A revocable living trust can simplify the management of your assets by consolidating them under a single entity. This can be particularly beneficial if you own property in multiple states, as the trust can help avoid the need for ancillary probate proceedings in each state. Additionally, having a centralized management structure can streamline the administration of your estate, making it easier for your trustee to carry out your wishes.
A revocable living trust allows you to set specific terms for how and when your assets are distributed to your beneficiaries. This can be especially important if you have young children, beneficiaries with special needs, or individuals who may not be financially responsible. You can create provisions that provide for their needs while protecting the assets from being squandered.
Because a revocable living trust is not subject to probate, it is generally less susceptible to legal challenges compared to a will. This can provide greater assurance that your wishes will be carried out as intended and that your beneficiaries will receive their inheritance without prolonged legal disputes.
The dedicated team at Rhodium Law can provide the estate planning guidance and support you need to draft a strategic living trust. Contact Rhodium Law to schedule a free consultation and speak with a trusted Ohio estate planning lawyer. Take hold of your future and protect your family and assets today.
When creating a living trust, another decision that must be made is whether the trust will be revocable or irrevocable. This is a very important decision that will determine what the grantor can do with the trust in the future, including whether they can dissolve it.
Revocable living trusts are the most commonly created trusts because they offer the most flexibility. With revocable trusts, the grantor retains control over the trust and its assets and can make changes to the trust over their lifetime. The grantor can add or remove assets, change the beneficiaries, or even revoke and dissolve the revocable trust. This trust also allows the grantor to be the trustee if they do not wish to appoint someone else.
A disadvantage to a revocable living trust is that it is still considered part of the individual’s estate for tax purposes when they die. While Ohio has neither estate nor inheritance taxes, if an individual’s estate in 2024 is $13,610,000 or more, their estate will be required to pay federal estate tax. However, that number is subject to change as the federal estate tax exemption is scheduled to expire at the end of 2025. If it does, estates worth $5,600,000 or more will be subject to estate tax. Because these numbers can change, Rhodium Law strongly recommends that individuals with large estates consult with an estate planning attorney to discuss their options for potentially reducing their tax burden.
Irrevocable living trusts are another trust option. Irrevocable trusts are irrevocable, which most people understand to mean that no changes can be made and the trust cannot be dissolved. This is only partially true. To create an irrevocable trust, the individual must give up control over the assets placed in the trust.
They must appoint a third party to be the trustee, as the law does not allow the grantor to also act as trustee on an irrevocable trust. Changes to the trust’s terms can only occur if all the trust’s beneficiaries agree to the changes. This includes changing beneficiaries. The trust can only be terminated if all the assets are first distributed to the beneficiaries and the trust then costs more to administer than the value of the trust. These factors are important to consider because it means that if the grantor later wishes to remove a beneficiary or make other changes, they may not be able to.
However, irrevocable trusts do have some advantages as well. First, because the grantor has given up control of and ownership over the assets to the trust, the assets in the trust are no longer part of their estate for tax purposes. Second, for the same reason, creditors cannot attempt to collect the debt from the trust assets. If an individual is interested in protecting their assets from creditors, they may wish to discuss the Ohio Legacy Trust, which may not only allow the grantor to be a beneficiary of the trust but also allow them to change the terms or beneficiaries despite the irrevocability of the trust.
A living trust offers privacy, protection, and more control over how the assets are distributed than a will. With a trust, your beneficiaries can receive their inheritance more quickly, as the assets in a trust can be distributed immediately upon your death rather than waiting for probate to be finished. If you are considering a trust as part of your estate plan, the experienced team at Rhodium Law is ready to assist you. Call to schedule a free consultation and discuss your estate planning needs.
