It depends on how they title their assets and the size of their estate. Living or revocable trusts are one of several ways to transfer property upon your death. If mom and dad transfer all of their property to the trust while they are living, their appointed trustee will handle the transfers to the beneficiaries after their deaths. But the trustee can only transfer property that is owned by the trust. Many people create a trust, but neglect to properly transfer title to all of their property to the trust. In that case, the property that is not titled in the name of the trust will be transferred by the probate court. Probate administration is public, costly and often delays the distribution of assets to the intended beneficiaries.
While it is generally less expensive to have a private trustee pass the title to assets rather than conduct a formal administration of the estate in the probate court, Mom and Dad will incur up-front costs to set up the trust and to convey property to the trust. But these up-front costs provide more than just probate avoidance -- trusts can also provide for the flexible management of assets in the event of incapacity, allowing a son, daughter or financial institution to manage their financial affairs when they are unable.
Successfully avoiding the probate court for property transfers does not evade the tax man. Assets in a living trust are subject to federal and Ohio estate tax, the same as assets owned outright in the name of the decedent. However, a trust can be structured to maximize the available credits to minimize these taxes.