For Ohio residents planning their estates, living trusts represent a powerful tool for protecting their legacy and ensuring smooth asset transitions. According to the Ohio State Bar Association , proper estate planning can significantly impact how your assets are managed and distributed. Let’s explore everything you need to know about living trusts in Ohio.
What Is a Living Trust?
A living trust, as defined by the Ohio Revised Code Chapter 5801 , is a legal arrangement where you (the grantor) transfer assets to a trustee who manages them for your beneficiaries’ benefit. In Ohio, you can serve as your own trustee during your lifetime, maintaining complete control over your assets while creating a seamless transition plan for when you’re no longer able to manage them.
Types of Living Trusts in Ohio
The Cuyahoga County Probate Court recognizes two primary types of living trusts:
- Revocable Living Trusts These trusts offer flexibility to modify or cancel during your lifetime, while retaining control over trust assets. However, they provide no immediate tax benefits as assets remain part of your taxable estate.
- Irrevocable Living Trusts These trusts, once established, cannot be modified but offer potential tax benefits and asset protection features by transferring assets out of your estate.
Benefits of Creating a Living Trust in Ohio
According to the Ohio Supreme Court , living trusts offer several key advantages:
Privacy Protection Unlike wills that become public record through probate, living trusts maintain your family’s privacy. Trust terms and asset distributions remain confidential.
Probate Avoidance The Ohio probate process a can be complex and time-consuming. A properly funded living trust helps beneficiaries avoid probate entirely.
Seamless Asset Management If you become incapacitated, your successor trustee can manage trust assets without court intervention, potentially avoiding guardianship proceedings.
When You Might Need a Living Trust in Ohio
Based on guidance from the American Bar Association’s Real Property, Trust and Estate Law Section , consider a living trust if:
- Your estate exceeds $35,000 (or $100,000 if everything goes to your spouse)
- You own property in multiple states
- Privacy is a primary concern
- You want to ensure smooth asset management if you become incapacitated
Tax Implications
The Internal Revenue Service notes that as of 2025, while Ohio has no estate tax, federal estate tax affects estates exceeding $13.99 million. Trust structure can still impact income tax treatment and basis step-up considerations.
Creating Your Living Trust
According to SmartAsset’s estate planning guide , the process involves:
- Deciding between an individual or shared trust
- Choosing assets to include
- Selecting a successor trustee
- Identifying beneficiaries
- Creating and signing the trust document
- Funding the trust by transferring assets
Common Misconceptions
The American College of Trust and Estate Counsel emphasizes several important points:
- Living trusts don’t eliminate the need for a will
- They don’t provide asset protection from creditors during your lifetime
- They don’t automatically reduce estate taxes
- They don’t help qualify for Medicaid
Next Steps
Every family’s situation is unique, and living trusts aren’t right for everyone. To determine if a living trust should be part of your estate plan, consider scheduling a consultation with an experienced estate planning attorney.
Remember, while this guide provides a comprehensive overview, estate planning decisions should be made with professional legal guidance considering your specific circumstances.
Contact our Ohio estate planning attorneys today for a personalized consultation about creating a living trust that protects your legacy.
Additional Resources:
- Ohio State Bar Association’s Guide to Probate
- Ohio Estate Planning Council Resources
- Find Qualified Estate Planning Attorneys in Ohio
