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Estate Planning Probate & Settlement


What is Probate?LivingWill When an Ohio resident dies owning property, it must be determined who will receive the property. If the decedent was the only owner of the property, then a legal process is begun to (1) determine if the decedent left a valid will and if not, then who are the next of kin (2) to determine the nature of the decedents assets and debts (3) to comply with the requirements of the Ohio and Federal Estate tax systems and (4) carry out the distribution directions of the decedents will or the requirements of Ohio’s Statute of Descent and Distribution. The primary court with jurisdiction of this process is the Probate Court, and the process is generally referred to as probate.

What is Non-Probate?
Ohio residents have many available methods for naming beneficiaries of assets, or owning assets jointly with others with the rights of survivorship. Examples of Non-Probate property that name beneficiaries are: (1) Payable on Death (POD) accounts with banks and other financial institutions, (2) Transfer on death (TOD) designations on deeds, securities, brokerage accounts, and motor vehicles, (3) named beneficiaries on life insurance and retirement accounts, and (4) assets held in trust. Real estate may also be owned jointly, pursuant to survivorship deeds. Ownership of such “non-probate” property transfers upon death to the surviving named beneficiaries or joint owners by operation of law and will not be probate assets.

 If an asset is Non-Probate, does it avoid estate taxes?
No. It is a common misunderstanding that if an asset is non-probate, then it avoids estate tax. Almost all assets owned at death, both probate and non-probate, are included as part of the decedent’s gross taxable estate. One important exception to this rule is that life insurance that names a beneficiary, will not be included in the gross estate for the Ohio estate tax.