PROBATE ASSETS—Controlled by will / Must go through probate court

Real estate in one name alone
Real estate in two names with no survivorship status (tenants in common)
Motor vehicles (Except 2 vehicles to surviving spouse; or transfer on death on title)
Financial accounts or stock in one name alone

NONPROBATE ASSETS—Controlled by other document/NO probate court

Real estate in “SURVIVORSHIP DEED”—each owns undivided interest during life
Real estate in “TRANSFER ON DEATH AFFIDAVIT” status by affidavit or deed— interest passes only upon death
Survivorship financial accounts—each owns interest during life
Payable on death financial accounts—only interest upon death
Stock in transfer on death account with broker each owns interest—only interest upon death
Life insurance death benefit (unless estate is the beneficiary)


Gifts avoid probate court, but may bring taxes otherwise avoided Donee of gift takes “basis” (purchase price) of donor; pays capital gains on difference between basis and sale price at income tax rates, unless personal residence Example: Mother deeds $100,000 house to son; she paid $20,000, 25 years ago; he sells for $100,000 after her death; he pays income tax on $80,000 at income tax rate. Beneficiary of estate takes date of death value as basis; capital gains only on gain from time of death Example: Mother wills $100,000 house to son; she paid $20,000 25 years ago; he sells for $100,000 after her death; his basis is $100,000; he pays no income tax because there is no taxable gain.


Tax on assets transferring on death; probate and non- probate; or gifts in contemplation of death (3 years)
No tax on transfer to surviving spouse
No tax below $338,000 net estate
Life insurance to named beneficiary not included
FEDERAL ESTATE TAX—tax on same assets as Ohio
No tax to surviving spouse
No tax below $2,000,000 (may be changing; not clear)

POWER OF ATTORNEY—How to avoid guardianships

Allows competent person to appoint someone to handle affairs if needed
“Durable” power of attorney continues even if principal becomes incompetent in the future
Only other alternative is to file for guardianship in probate court; guardian must be bonded for twice the value of the ward’s assets; file inventory and annual accounts; court costs, bond costs, attorney fees
Power of attorney can be revoked at any time, not permanent
Problem: It can be abused by dishonest person

LIVING WILL—Make your own decision about terminal illness

A direct order to medical providers not to use respirator or feeding tubes
Two doctors must agree you are terminal and permanently unconscious
Takes a difficult decision off the shoulders of your family; you already have made it and they cannot change it
Avoids need to apply to probate court to end life support

MEDICAID—No good answers

Must spend assets owned at time of application down to $1,500 to qualify for nursing home payments (except spouse at home, then only half of assets, subject to limitations)
All assets transferred within 5 years of applying will be calculated to determine months ineligible (amount transferred divided by average monthly nursing home cost)
Example: Mother transfers $120,000 to son a year before applying for Medicaid—she is ineligible for 200 months ($120,000 divided by $6,000 average nursing home cost).