Setting Up Trusts in Ohio: What You Need to Know

A trust is a powerful estate planning tool that helps individuals manage their assets, avoid probate, and provide financial security for their loved ones. In Ohio, trusts offer flexibility in how and when assets are distributed, making them a valuable option for those looking to control their estate beyond a simple will.

This guide explains the types of trusts available in Ohio, the steps to create one, and how to determine if a trust is right for you.

What Is a Trust?

A trust is a legal arrangement in which a person (the grantor) transfers assets to a trustee to hold and manage for the benefit of named beneficiaries. The trustee is responsible for following the terms outlined in the trust document, ensuring that assets are distributed according to the grantor’s wishes.

Unlike a will, which only takes effect after death and requires probate, a trust can manage assets both during the grantor’s lifetime and after their passing. This makes trusts a preferred option for individuals who want to avoid probate and maintain control over their estate.

Types of Trusts in Ohio

Ohio law allows for several types of trusts, each serving different estate planning needs. Understanding these options can help you choose the best trust for your situation.

Revocable Living Trust

A revocable living trust allows the grantor to retain control over their assets while they are alive. The grantor can modify or revoke the trust at any time. Upon the grantor’s death, the trust becomes irrevocable, and assets are distributed according to the trust’s terms.

Avoids probate, ensuring a faster and more private asset transfer.
Allows for incapacity planning, as a designated trustee can manage assets if the grantor becomes unable to do so.
Does not protect assets from creditors or reduce estate taxes.

Irrevocable Trust

Once established, an irrevocable trust cannot be modified or revoked by the grantor.

Testamentary Trust

A testamentary trust is created within a will and only takes effect after the grantor’s death. It is often used to control how minor children or beneficiaries with special circumstances receive their inheritance.

Requires probate, as it is part of a will.
Provides structured asset distribution over time.
Can protect young or financially inexperienced beneficiaries from mismanaging assets.

Special Needs Trust

A special needs trust is designed to provide financial support for individuals with disabilities without affecting their eligibility for government benefits such as Supplemental Security Income (SSI).

Ensures ongoing financial care for a disabled beneficiary.
Assets are not counted for government assistance eligibility.
Can be funded by the grantor or through inheritances and settlements.

Charitable Trust

A charitable trust allows individuals to donate assets to a nonprofit organization. These trusts provide income to the grantor or beneficiaries for a set period before transferring the remaining assets to the charity.

Supports long-term philanthropic goals.
Includes options such as charitable remainder trusts (CRTs) and charitable lead trusts (CLTs).

Spendthrift Trust

A Spendthrift Trust in is a type of trust designed to protect beneficiaries (adult children) from creditors and reckless spending. It restricts the beneficiary’s ability to transfer or pledge their interest in the trust, preventing creditors from seizing trust assets before they are distributed. Under Ohio law (Ohio Revised Code § 5805.01), a properly drafted spendthrift clause ensures that trust funds remain secure and managed by the trustee, safeguarding the beneficiary’s long-term financial stability. This type of trust is commonly used to protect inheritances from lawsuits, divorce settlements, or poor financial decisions.

Steps to Set Up a Trust in Ohio

Creating a trust involves several key steps to ensure it meets legal requirements and aligns with your estate planning goals.

Determine Your Goals

Before setting up a trust, clarify your objectives. Ask yourself:

Do you want to avoid probate?
Do you need to set conditions for inheritance distribution?

Choose the Right Type of Trust

Select a revocable, irrevocable, or specialized trust based on your financial situation and long-term needs. Consulting an Ohio estate planning attorney can help you determine the best option.

Appoint a Trustee

The trustee is responsible for managing the trust according to its terms. This can be:

An individual (such as a trusted family member or friend).
A professional trustee (such as a bank or trust company).
The grantor (if creating a revocable living trust).

Choose a trustee who is responsible, financially knowledgeable, and capable of managing trust assets.

Create the Trust Document

The trust document must include:

The grantor’s name and details.
The trustee’s responsibilities and authority.
A list of assets placed in the trust.
Instructions for asset distribution to beneficiaries.
Any special conditions (such as age restrictions for inheritance).

Fund the Trust

A trust only becomes effective when assets are transferred into it. This step may involve:

Retitling real estate in the trust’s name.
Transferring bank accounts and investments.
Changing beneficiary designations on life insurance policies.

Review and Update the Trust as Needed

Over time, your financial situation and family circumstances may change. If you have a revocable trust, review and update it periodically to reflect:

Changes in beneficiaries or trustees.
New assets or property acquisitions.
Adjustments in estate planning goals.

Do You Need a Trust in Ohio?

A trust is not necessary for everyone, but it can be beneficial if you:

Own real estate in multiple states and want to avoid probate in each jurisdiction.
Have minor children or beneficiaries who need structured inheritance.
Seek privacy in your estate planning (unlike a will, a trust does not become a public record).

An estate planning attorney can assess your situation and determine whether a trust, a will, or a combination of both is the best option.

Set Up Your Ohio Trust with Confidence

Setting up a trust in Ohio provides valuable estate planning benefits, from avoiding probate to protecting assets for future generations. However, choosing the right trust and structuring it properly requires careful planning and legal knowledge.

At Hilton Parker Law, we help individuals and families create customized trusts that align with their financial goals and provide peace of mind. Whether you need a revocable living trust, an irrevocable trust, a spendthrift trust or specialized estate planning strategies, our team ensures your assets are protected and distributed according to your wishes.

Don’t wait to put a plan in place. Schedule a free consultation with Eliza Bauler-O’Grady at (614) 992-2277 today and create a trust that protects your loved ones and gives you peace of mind.