If you live in Ohio, estate planning will require you to manage your assets in a way that complies with state laws. Ohio residents can use wills, trusts and powers of attorney to make sure that their property is managed and distributed according to their preferences. It is also helpful to understand Ohio’s probate process, which oversees the handling of estates after death. Each strategy can be customized to fit individual goals, family dynamics and financial circumstances. These are our best tips for Ohio estate planning to handle the future of your estate.
A financial advisor can help you create a personalized estate plan to manage and distribute your assets.
1. Understand Ohio’s Probate Process
Probate in Ohio is the legal process through which a court validates a deceased person’s will and supervises the distribution of assets. However, not all assets are subject to probate. Assets that are jointly owned or those with designated beneficiaries, such as life insurance policies or retirement accounts, often pass outside of probate. Ohio residents may want to focus on minimizing probate costs by using these non-probate transfer options.
2. Create a Valid Ohio Will
One of the most fundamental components of Ohio estate planning is drafting a valid will. Ohio law requires that a will be written and signed by the testator, the person making the will. It must be witnessed by at least two people who are physically present to witness the testator sign the document. If you fail to meet these requirements, your will could be ruled invalid, greatly complicating the probate process.
3. Be Aware of Ohio’s Elective Share Rights
Ohio law provides for an elective share for surviving spouses, meaning that a spouse has the right to claim a portion of the deceased’s estate, even if they were left out of the will. The Buckeye State allows surviving spouses to receive up to one-half of the net estate unless two or more of the decedent’s children or their lineal descendants survive. In this case, the surviving spouse may not take more than one-third of the net estate.
4. Consider Ohio’s Estate and Inheritance Tax Rules
Ohio has no estate tax or inheritance tax, but federal estate tax laws may still affect larger estates. In 2024, the federal estate tax exemption is $13.6 million per individual and $27.2 million for married couples. You should review estate tax laws regularly for possible changes to keep your estate plan updated and compliant.
5. Designate a Durable Power of Attorney
In Ohio, appointing a durable power of attorney (POA) allows you to name someone who can manage your financial affairs should you become incapacitated. This person can act on your behalf in a variety of matters, such as managing bank accounts, signing documents or handling real estate transactions.
6. Set Up a Medical Power of Attorney and Living Will
Ohio law permits individuals to create a medical power of attorney, which appoints someone to make healthcare decisions for you if you are incapacitated. Additionally, you can use your living will to specify your preferences for medical treatment, including end-of-life care. These documents ensure that your healthcare wishes are followed and help avoid disputes among family members.
7. Establish Ohio Transfer on Death (TOD) Designations
Ohio offers transfer on death (TOD) designations, which can be used for various assets, including real estate, vehicles and financial accounts. By setting up a TOD designation, you can specify beneficiaries who will receive the asset upon your death without going through probate.
8. Use Ohio’s Guardianship Designation for Minor Children
If you have minor children, you should designate a guardian in your will so that your children are cared for in the event of your death. Ohio courts give significant weight to a parent’s wishes when appointing a guardian. Failing to name a guardian can leave the decision up to the court, which may not align with your preferences.
9. Plan for Special Needs Beneficiaries
For families with special needs individuals, creating a special needs trust can help provide for the financial needs of beneficiaries without jeopardizing their eligibility for government benefits, such as Medicaid or Supplemental Security Income (SSI).
10. Understand Ohio’s Trust Options
Trusts can allow Ohio residents to manage the distribution of assets and potentially avoid lengthy probate. A revocable living trust, for example, allows the grantor to manage the trust during their lifetime while designating beneficiaries to receive the assets after death. Since Ohio law recognizes various types of trusts, working with an estate planning attorney can help you determine which trust best fits your needs.
11. Plan for Digital Assets
Ohio has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which allows individuals to designate someone to access their digital assets after death. Providing instructions for digital accounts, such as social media, online banking and email, can make it easier for your loved ones to manage or close these accounts.
12. Name a Reliable Executor
The executor of your will manage your estate after your death. Ohio law allows you to name any adult individual or financial institution to serve as your executor. It is essential to choose someone who is trustworthy and capable of handling the various responsibilities involved, such as paying off debts, distributing assets and managing probate if necessary.
13. Consider Gifting to Reduce Estate Size
For those looking to reduce the size of their estate to avoid federal estate taxes or simplify asset distribution, gifting is an option. Ohio does not impose a gift tax, so you can give away a certain amount of money or assets each year without facing tax consequences. However, it is important to stay within federal gift tax limits to avoid triggering hefty taxes.
14. Plan for Long-Term Care Costs
Long-term care can be a significant expense, especially for older individuals. Ohio offers Medicaid programs to help with these costs, but qualifying for Medicaid often requires careful planning, as there are strict income and asset limits.
15. Review and Update Your Estate Plan Regularly
Ohio residents should review and update their estate plans periodically, especially after major life events such as marriage, divorce, birth of a child or significant changes in financial circumstances. Laws and personal circumstances may change, and regularly updating your estate plan ensures that it continues to reflect your current wishes and financial situation.
Bottom Line
Residents in Ohio can take advantage of several estate planning strategies to avoid probate, and manage and distribute their estate efficiently to beneficiaries. Knowing state-specific rules could help you keep your plan updated and compliant.
Estate Planning Tips
- A financial advisor can work with you to create an estate plan that complies with state and federal laws. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you have a large estate, your beneficiaries may run into estate taxes. Make sure you do your research on the federal estate tax and state estate tax rates.
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