Estate Planning in Ohio

Estate Planning in OhioEstate planning is making a plan in advance and naming the persons you want to receive the things you own after you die without the interference of the Internal Revenue Service (IRS) or third parties. Assets, life insurance, pensions, real estate, cars, personal belongings and debts are all part of one’s estate. But estate planning is an ongoing process, not just a one-time occurrence. It’s something that should be reviewed and updated as your family and financial status changes throughout your lifetime.

Not Just for Retirement Years of Life

Some mistakenly believe estate planning is just for retired people, but life-altering accidents and serious illnesses happen to people of all ages, therefore all of us must think ahead. People also believe that estate planning is just for the wealthy, but actually good estate planning often means more to people of modest means. It can eliminate many uncertainties and maximize the value of the estate by reducing taxes and other costs, and it does not have to be something complex.

When you don’t have an estate plan, and you become disabled or unable to conduct business because of mental or physical incapacity, only a court appointee can sign for you. The court, not your family, will control how your assets are used to care for you through a guardianship which can become expensive and may be difficult to discontinue if you recover. It is also part of public record.

Another serious consequence of not having at least a will or trust expressing your wishes happens when you die. Your assets will be distributed according to the probate laws of Ohio and your desires could be misinterpreted by the court. If both parents die, the court will appoint a guardian and you will have no input as to who is chosen for that important job. The same goes with beneficiaries that you may want to oversee. With probate, there will be many fees to be paid including executor fees, court fees, recording fees and attorney fees. (Some expenses, for example, estate taxes, will not be alleviated by the presence of a will.)

You Need a Will

A will can outline your instructions upon death, but it will not avoid the probate court. Any assets titled in your name or directed by your will must go through the probate process of your state before being distributed to your heirs. This can take from nine months to two years or longer depending on any difficulties such as heirs who feel they were wrongfully excluded from an inheritance. Probate files are open to the public so anyone can easily find out the terms of a will.

Specific final arrangements, such as a preference for cremation over burial or wishes regarding organ and body donation, can also be part of your final written documents.

There are several assets which do not go through probate and are thus considered “non-probate assets.” Assets that allow the decedent to name a beneficiary, such as life insurance, 401Ks, IRAs, annuities, lifetime gifts and jointly owned property, such as joint tenants with right-of-survivorship and tenants in common, tenancy by the entirety, are not controlled by the terms of a will and usually transfer to the recipient immediately upon death without going through probate.

However, avoidance of probate is not guaranteed. For example, if you name a minor as a beneficiary, the court may insist on setting up a guardianship for the assets until the minor becomes an adult.

Advantages of a Revocable Living Trust

The main advantage of a revocable living trust is that it can be changed at any time during the lifetime of the person who establishes the trust and it can avoid the probate process at the death of that individual. This is if the revocable living trust is “funded” during the lifetime of the person establishing it. A revocable trust can be funded with any property such as checking accounts, savings accounts, brokerage accounts, stocks and bonds, a home and other real estate. After executing a trust agreement, it should be assured that all assets are properly re-registered in the name of the living trust. If assets remain outside of a trust, a probate proceeding may be necessary to transfer assets to the trust upon the death of the testator (person who wrote the will).

Establishment of a trust can also prevent court control of assets at incapacity and bring all assets together in one plan. A trust is also valid in every state which makes it very useful if the decedent owns multiple properties in different states.

Unlike a will, a trust does not die when you do. Assets can stay in the trust, managed by the trustee you selected until your beneficiaries reach the age you want them to inherit. This protects the assets from creditors and irresponsible spending. The trust documents itself should define the meaning of incapacity and indicate who determines incapacity because this may be different in every case.

If you don’t think you can afford a complex estate plan right now, start with what you can afford. For a single adult or young family, this could mean a will, term life insurance and power of attorney for your assets and health care decisions. (Power of attorney is a legal document that gives one person the authority to act for another person in specified matters or all legal and financial matters.)

As your finances change, your estate planning can become more detailed. An experienced attorney can provide critical guidance and make sure that all your documents are prepared properly. Trusts are contracts and as such do not require notarization in the state of Ohio, but they are generally notarized in order to convey real estate. In Ohio, a will does not need to be notarized to make it legal. Both documents must, however, be in writing (unless it is an oral will which in Ohio may be dictated during a last illness in extreme cases).

Seven Tips for Making an Estate Plan

1. Make health care directives

Health care directives include a health care declaration (“living will”) and a power of attorney for health care which gives someone you choose the power to make decisions if you become unable to make medical decisions for yourself.

2. Name someone to safeguard your children’s property

If you have minor children, you will want to name an adult you trust to handle any money and property the children may inherit from you. This can be the same person as the guardian you name.

3. Protect your business

If you are the sole owner of a business, you should have a succession plan. If you own a business with others, you should have a buyout agreement. In some professions, such as law, you are required to make provisions as to what will happen to your clients if you can no longer represent them.

4. Life insurance may be a good idea

If you foresee significant debts or estate tax when you die or you own a home or have young children, you should consider life insurance, typically a non-probate asset, which is usually less expensive for young people to purchase.

5. Estate taxes

In 2016, the federal government will impose estate tax at your death only if your taxable estate is worth more than $5.45 million. This figure increases each year to adjust for inflation, but more than 99.7% of estates won’t owe federal taxes so it’s generally not something to worry about.

6. Funeral expenses

Instead of a funeral pre-payment plan, you can set up a payable-on-death account at your bank and deposit funds into it to pay for your funeral and related expenses. This will probably save your survivors considerable money and they won’t have to diminish estate funds.

7. Let someone know where your documents are stored

Of course you can give all the information about your documents to your attorney, but it is a good idea to let a trusted family member know the whereabouts of your documents as years may go by between the time you prepare your will and it is actually presented for probate.

In addition to your will or trust documents, your heirs may need access to insurance policies, real estate deeds, certificates for stocks, bonds or annuities, information on bank accounts, mutual funds and safe deposit boxes; information on retirement plans, 401k accounts and IRAs, information on debts, credit cards, mortgages and loans, utilities and unpaid taxes, information on funeral prepayment plans and any other final arrangements or instructions.

As you can see there are many facets to planning an estate and a huge advantage to having the expertise of someone familiar with Ohio’s probate, tax and trust laws.  Planning is a vital tool throughout a person’s life. A well-developed and executed plan is critical in achieving any type of goal.

The Legal Experience Needed

At Slater & Zurz LLP, we have been helping clients with estate planning for over 40 years. We conduct personal and confidential meetings with clients to review and understand what each client wishes to accomplish. Then, we explore all alternatives and make recommendations that will help each client achieve their goals.

A sample of our estate planning process includes:

  • Tax Planning
  • Will Planning
  • Trust Planning (including revocable trusts, irrevocable trusts and special needs trusts)
  • Advanced Directives (including living wills, health care power of attorney and health care directives)
  • Powers of Attorney

Preparation or Review of Planning Documents

Once the appropriate plan is developed, we can prepare the necessary documents that will help a client execute their plan. We can also review estate planning documents that have been prepared by others. Examples of estate planning documents include:

  • Different Types of Wills
  • Different Types of Trusts
  • Specific Types of Advanced Directives
  • Specific Types of Powers of Attorney

Please contact us for a free consultation with one of our experienced attorneys by calling 1-888-467-5105, chat with one of our 24-hour live chat representatives or send us a message here from our website.

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