How Trusts Work

Trusts operate according to the terms written into the trust document.

​

Those terms define who controls the assets, how decisions are made, when distributions occur, and under what conditions assets are transferred or retained.

​

Some trusts are designed to operate during the grantor’s lifetime. Others become active only after death. Some allow flexibility and ongoing control, while others are intentionally restrictive.

​

Unlike a will, a trust can continue operating long after the grantor’s death. This makes trusts useful for long-term planning, asset management, and protection.

Common Types of Trusts in Ohio

Ohio law recognizes many types of trusts, each serving a different purpose.

​

Revocable living trusts are often used to manage assets during life and streamline administration after death.

​

Irrevocable trusts are commonly used when asset protection, tax planning, or benefit eligibility is a concern.

​

Discretionary trusts give trustees authority over when and how distributions are made, often to protect beneficiaries from creditors or poor decision making.

​

Medicaid asset protection trusts are used in long-term care planning to preserve assets while addressing eligibility rules.

​

Each type of trust involves different tradeoffs. No single trust is appropriate for every situation.

When Trusts Are Commonly Used

Trusts are often used when control matters more than simplicity.

​

They are common in situations involving minor children, blended families, beneficiaries with special needs, or concerns about creditor exposure.

​

Trusts are also frequently used when privacy is important, since properly structured trusts can reduce the amount of information that becomes part of the public probate record.

​

In many cases, trusts are used alongside a will, not instead of one.

What Trusts Do and Do Not Do

Trusts can provide structure, continuity, and control. They can manage assets over time, set conditions on distributions, and reduce court involvement.

​

They do not automatically eliminate taxes, guarantee protection from creditors, or solve every estate planning issue.

​

A trust must be properly drafted and properly funded to function as intended. An unfunded trust is often no more effective than no trust at all.

​

Understanding both the benefits and the limits of trusts is critical before relying on one.

Trusts Compared to Wills

A will directs how property is distributed after death and appoints an executor to manage probate.

​

A trust governs how assets are managed and distributed according to its own terms and can operate both during life and after death.

​

Wills generally require probate. Trusts may reduce or simplify probate, depending on how assets are titled.

​

Most comprehensive estate plans use both tools together, each serving a different role.

How Trusts Fit Into a Broader Estate Plan

A trust is rarely a standalone solution.

​

Effective estate planning requires coordination between trusts, wills, beneficiary designations, powers of attorney, and health care documents.

​

The goal is not complexity for its own sake. The goal is alignment between legal tools and real-world circumstances.

​

Understanding how trusts fit into that broader picture is often more important than choosing a specific trust type.

The Bottom Line

Trusts are powerful planning tools under Ohio law, but they are not one-size-fits-all solutions.

​

Whether a trust is appropriate depends on your assets, your family, and what you are trying to accomplish.

​

Understanding how trusts work is the first step toward deciding whether they belong in your estate plan and, if so, which type makes sense.