A Quit Claim Deed with Remainder Interest and Retained Power to Modify Remainderman by Last Will and Testament (Changeable Remainder Interest Deed - CRID) will allow your real estate to pass to your remainderman without passing through probate court (unless you exercise your power to change the remainderman under your Last Will and Testament). The power to change the remainderman under your Last Will and Testament is known as a special power of appointment. Because you retain this power the present transfer is not a completed gift and no gift tax return is required.
Although the real estate will not pass through probate it will be subject to the Ohio Estate Tax (and in estates in excess of $600,000 the Federal Estate Tax). By subjecting the real estate to the Ohio Estate Tax your remainderman will receive a stepped up basis for capital gain in the property to its market value on date of death.
Once you transfer the remainder interest in the property you are no longer eligible for the over-55 lifetime capital gain exclusion of $125,000 in the event that you sell the property while you are alive. If you intended to sell the property then the remainderman would be required to Quit Claim back to you the remainder interest so that you could take advantage of the exclusion.
The transfer is a disqualifying act for medicaid planning purposes. Furthermore, effective August 10, 1993, for medicaid recipients dying after October 1, 1993, the new federal law allows the State of Ohio to impose a medicaid lien for costs incurred by medicaid against the remainder interest before it passes to the remainderman. Whatever medicaid has paid on your behalf prior to your death would be recovered from the value of the property before it passes to your remainderman.