The best definition that I have found for a trust is from the Ohio State Bar Association: “a trust exists when one person gives property to another person (called the trustee) to hold and manage for one or more other persons (called the beneficiaries).” Although there are many different types of trusts, the most common, and what people generally obtain from estate planning, is the Revocable (“Living”) Trust. A Living Trust is one that can be changed or revoked during the lifetime of the person(s) that created the trust. It is common for the person that created the trust to also be the trustee until his or her death.
Although there are many benefits to having a Living Trust, a common benefit that you frequently hear about is that it helps avoid probate. This is true. Probate deals with property that the deceased (“decedent”) owns personally, in his or her name, upon their death. When you create a Living Trust, the asset is re-titled into the name of the trust, so the trustee “owns” the property. Therefore, upon death, probate is avoided because the decedent does not own the property personally in his or her name.
For example, John Doe creates a Living Trust and wants to put his house into it to avoid probate. He does this by re-titling the house into the name of the trust. As trustee, he can sell or give away the property during his lifetime. Upon his death, because the house is in the trust, John Doe does not own the property in his name. Thus, no need to probate the house. John’s family avoids the time and expense to transfer the house through the probate court.
Despite common, hard sells by some attorneys, Living Trusts are not for everyone and there are probate avoidance techniques that can be equally effective. These techniques should be part of the conversation. To discuss whether a trust is right for you, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100).
This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney
Attorneys Jesse Bowman; Max Kinman; Chris Alexander: David Wagner