The first approach to estate planning is setting up a protective trust that designates certain assets under trust ownership. This is often done for family protection, and in particular assets for a spouse or dependent child. This is commonly known as a irrevocable trust, and the assets held in the trust are property of the beneficiaries and controlled by a designated trustee.
Another method of financial asset protection is transferring funds to an LLC in exchange for an assigned interest in the entity. The percentage of ownership allotted to the primary asset holder can be exposed to the probate process, but the larger portion of the transfer will be considered property of the limited liability company.
The alternate to these two techniques is transferring an annuity to a protective financial instrument or trust that protects the primary decedent estate probate from creditor or tax liability collection. Many people own annuities such as an IRA or a pension plan, and transfer of the assets prior to passing can be a very effective method of probate exposure avoidance.
A truly sound estate plan can be designed to pass outside of probate entirely in many situations, but it takes the assistance of an experienced estate planning attorney in designing the structure. Ohio residents should always choose an attorney who focuses on estate planning.
