If you were to die without a will or a trust, the condition of intestacy would exist. The probate court would get involved, and assets would be distributed according to intestate laws of succession. Before we explain these laws, we should point out the fact that some types of asset transfers would not be subject to probate and the succession rules.
Insurance policy proceeds would go directly to the beneficiary or beneficiaries, and there would be no need for the court to intervene in any way. It is possible to add a co-owner to the deed of your home. This is called joint tenancy with right of survivorship. Under these circumstances, the surviving joint tenant would assume ownership of the home in its entirety outside of the probate process.
When you open up a bank account or a brokerage account, you may be offered a payable on death option. This allows you to add a beneficiary to the account. The person that you name would not have access to the funds while you are alive. After you pass away, the beneficiary would become the sole owner of the funds that are remaining in the payable on death account.
There are a number of states in the union that allow for transfer on death car registrations. We practice law in the state of Ohio, and you can take advantage of this opportunity in our state. The situation is the same as it would be with a transfer on death bank or brokerage account.
Your 401(k) or individual retirement account would be transferred to the beneficiary or beneficiaries after you are gone directly, outside of probate.
Intestate Succession in Ohio
When it comes to property that does not fit into any of the above categories, intestate succession laws would be applied. The system is all based on the familial relationships that you had with surviving relatives. If you have children but no spouse, your children would inherit all of your intestate property.
Your spouse would inherit everything if you are married and you have no children and your parents are deceased. This would also be the result if your surviving spouse was the mother of all of your children. These are a few of the most common scenarios that can exist, but there are intestate succession laws that apply to all possible situations. You can examine the Ohio Revised Code if you would like to obtain a thorough understanding of the succession laws.
It is not wise to go through life without an estate plan, even if you are okay with your spouse inheriting everything after you are gone. And of course, many people will want to include others when they are devising estate plans. Of course, one possibility would be the creation of a last will, but there are drawbacks that you should consider before you go this route.
A will must be admitted to probate, and the heirs to the estate cannot receive their inheritances while the process is underway. It will usually take about nine months to a year, and this is a long time to wait for a rightful inheritance. There are also expenses that must be paid during probate, and this money is essentially coming out of the pockets of the inheritors. Plus, you would be allowing for lump-sum distributions to your heirs, and this may not be consistent with your wishes.
An alternative would be the creation of a revocable living trust. Assets that you convey into this type of trust would be distributed by the trustee after your passing in accordance with your wishes. You would have the ability to instruct the trustee to distribute assets incrementally to prolong the viability of the trust if this is your choice. Resources in a living trust can be distributed outside of probate, so the drawbacks that we looked at above would be avoided.
Take Our Estate Planning Quiz!
We provided a bit of basic information in this brief blog post, but you can learn a lot more if you tap into a very valuable resource that we are offering through this website. Our attorneys have devised a very useful estate planning quiz, and you can see where you stand if you take some time to go through it. Simply click this link and consider the questions that are being asked honestly.
If you feel as though you are unprepared after you take the quiz, call us at 513-721-1513 to schedule a no-obligation estate planning consultation.