Revocable Living Trust
Having a Revocable Living Trust can reduce the costs of administration, the time for administration, and provide additional protection for assets. There is a common misconception that only people with extreme wealth can benefit from a Trust.
In fact, a Trust is a valuable planning tool for the majority of families including parents with minor children, business owners, parents with children of special needs, and families that want to limit unnecessary estate expenses.
Similar to a Will, a Trust controls the final distribution of an Ohio resident's assets. Unlike a Will, a Trust requires little or no involvement from the County Probate Court. A Trust is used in conjunction with a Will; a Will is still necessary to appoint Guardians and transfer assets not owned by a Trust at the time of death.
Selecting a Trustee
During your life, you are the Trustee for your own Trust. If you are married, during your life you and your spouse are the Trustees. If one of you dies, the other is automatically the successor Trustee.
After the initial Trustee(s), you can appoint successors to control the distribution of assets. This is typically a family member, friend, financial adviser, attorney, bank, or another trusted individual or institution. You can appoint a series of successors in the event one is deceased, disabled, or refuses to act as Trustee.
Selecting a Trustee for minor children
With minor children, there are two theories for selecting a Trustee:
If you make the Guardian and Trustee the same person the process of requesting funds for the children will never involve conflict. If you have a person in mind for the Trustee role who also has a keen financial sense, this could be a good option.
If, instead, the Guardian may not have a strong financial sense or would be unable to reject unreasonable requests for distributions, it would be best to make the Trustee and Guardian separate individuals.
This type of structure also creates an extra check on the requests made by the Guardian. This limits the likelihood of abusive use of the funds.
When considering whom to choose, here are some helpful questions to ask:
Just like an Executor, it is important to realize a person is rarely perfect for this role. Indecision about who would be best is worse than not selecting anyone. When in doubt, ask the person directly.
Here are visual explanations of Ohio Trust topics: