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State by State Differences in Estate Planning: Transfer on Death Designation Affidavits

Estate planning law is state specific, meaning that the rules dictating what you can and can’t do for estate planning may be different depending on the state where you live. Rosenacker Law Office is uniquely situated to accommodate clients from two very different states. We have attorneys licensed to serve both Ohio and Kentucky clients and our Cincinnati office is mere minutes from Northern Kentucky. Although it is only a 10-15-mile drive, the laws that affect estate planning are different. The difference in law is important since it is not unusual for someone to move 10-15 miles away as their life circumstances change and needs evolve, but the effect of the short move may be substantial for their estate plan. While this article focusses on the comparison between Ohio and Kentucky law, this concept stands true for individuals who move from another state to Kentucky or Ohio as well. Moving states in general should trigger the need for updates to an estate plan.

One difference in estate planning rules between Ohio and Kentucky involves the legality of Transfer on Death (TOD) Designation Affidavits for real estate. A Transfer on Death Designation Affidavit is a document that will transfer an owner’s interest in real estate to the individual(s) listed upon the owner’s death. Because a TOD Affidavit provides an instruction for the distribution of the real estate upon the owner’s death, the asset passes to the named individual without any involvement by the probate court. This serves as a great option to keep probate avoidance simple. In addition, there is minimal delay in maintenance and upkeep of the property since ownership immediately vests in the beneficiary at the initial owner’s death. Although TOD Affidavits must be recorded in the county where the real estate sits, TOD Affidavits do not restrict the owner’s ability to sell or otherwise transfer the property.

TOD Affidavits are available for use as an estate planning tool in Ohio. They are specifically authorized by statute in ORC § 5302.23. However, in Kentucky, TOD Affidavits, or the equivalent, are not legal. The Kentucky legislature has considered legislation authorizing use of TOD Affidavits within the commonwealth in the past, most recently in 2018. The push to change Kentucky law in this way has been unsuccessful thus far. Therefore, estate planning for Kentucky real estate owners can be more complicated. If you move states, more specifically from Kentucky to Ohio or Ohio to Kentucky, updating your estate plan should be a priority. Contact Rosenacker Law Office to consult with an attorney well-versed in updating estate plans post-move. The difference in the law involving TOD Affidavits is important but not the only variance. Stay tuned for additional differences in estate planning law between Ohio and Kentucky in future posts.

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