Estate planning involves the process of arranging for the management and disposal of an individual’s estate during their life and after death. It typically includes several key components:

1. Will: A will is a legal document that outlines how a person wants their assets to be distributed after their death. It also allows the individual to name an executor who will be responsible for carrying out their wishes.
2. Trusts: Trusts are legal arrangements in which a person (the trustor) gives control of their assets to a trustee, who manages them on behalf of beneficiaries. Trusts can be useful for avoiding probate, minimizing estate taxes, and providing for minor children or individuals with special needs.
3. Power of Attorney: A power of attorney is a legal document that authorizes someone to act on behalf of another person in legal or financial matters. This can be useful if the individual becomes incapacitated and unable to make decisions for themselves.
4. Healthcare Directives: Healthcare directives, including a living will and healthcare power of attorney, allow individuals to specify their wishes regarding medical treatment in the event they are unable to communicate them themselves.
5. Beneficiary Designations: Many assets, such as life insurance policies, retirement accounts, and bank accounts, allow individuals to designate beneficiaries who will receive the assets upon their death. It’s important to regularly review and update these designations as life circumstances change.
6. Guardianship Designations: For individuals with minor children, estate planning may involve designating guardians who will care for the children in the event of the parents’ death or incapacity.
7. Tax Planning: Estate planning often involves strategies to minimize estate taxes, which can include gifting assets during one’s lifetime, establishing trusts, and taking advantage of tax exemptions and deductions.
8. Business Succession Planning: For individuals who own businesses, estate planning may involve developing a plan for the transfer of ownership and management of the business upon their death or retirement.

Overall, estate planning aims to ensure that an individual’s wishes are carried out, their loved ones are provided for, and their assets are transferred in the most efficient and tax-effective manner possible. It’s important to work with legal and financial professionals to develop an estate plan that meets one’s specific needs and goals.

This is a two-part estate plan:

1. One that will ensure all your debts will be paid
2. One that will determine who will receive the balance of your assets.

1. Last Will and Testament

This legal document contains your instructions as to who and how your assets are to be divided. The biggest drawback is that your property must go through probate before you family will be able to take legal control. This process can take months and in some cases years.

Probate being a court-supervised process, is dictated by the probate laws of the state where you lived at the time of your death.

2. Revocable Living Trust

This legal document can be used for both mental disability and death. This type of trust will allow you to control your property while you are alive and well, designate the person to manage you and your finances if you become mentally disabled, and then list your instructions as to who gets what upon your death. One of the benefits of using a Revocable Living Trust is that your estate does not have to be probated and your family will be able to gain virtually immediate access to your assets upon your death since property held in trust does not have to go through probate court. Another benefit of this type of trust is that you designate yourself as a trustee while you are living with a designated successor upon your death. In addition, this type of trust can be changed as things in your life change. An Irrevocable Living Trust can never be changed and should be executed with caution.

3. Transfer on Death or Beneficiary Designation

The document (e.g., deed, vehicle title, insurance policy, bank account) contains a term or provision designating beneficiaries to receive a specific asset at the time of your death without having to go through probate court. It also allows you to specify the percentage of assets each person or entity is to receive.

4. Survivorship Designation

This legal document gives the right of sole ownership to the other person on a joint deed, title or account.

5. Charitable Remainder Trusts

Charitable Remainder Unitrust, which would pay you all the income and a percentage of the trust principal on a monthly, bi-monthly, quarterly, or yearly basis.  You can choose a percentage from 5-50 percent.

The other type of charitable remainder trust is an irrevocable “Charitable Remainder Annuity Trust,” which pays a fixed amount on a monthly, bi-monthly, quarterly, or yearly basis that cannot be changed.

It does not matter when you set up the trust because you can add additional property, money, or other assets to the trust at any time but you cannot take back assets once they are in the trust.  You can even sell property in the trust but the proceeds would go to the trust.  You can manage the trust assets (i.e., buy, sell, or reinvest) but the proceeds stay in the trust.

If for some reason you become mentally disabled, you will need a two part estate plan in place- one that will take care of your personal decisions and one that takes care of your financial decisions. Otherwise, you and your assets will end up in a court-supervised guardianship or conservatorship.

The following are common documents used for estate planning.

1. Advanced Medical Directive (Healthcare Power of Attorney)

This legal document is necessary to delegate your personal needs and make medical decisions if you are permanently or temporarily unable to do so yourself.

2. Financial Power of Attorney

This legal document is necessary to delegate your financial decisions. There are two types: “durable” which means that the person you choose will have the immediate ability to take care of your property and will be able to continue to do so even if you are determined to be mentally incapacitated, and “springing” which means that the person you choose will not be able to manage your assets until after you have been determined to be mentally incompetent.

3. Living Will

This legal document allows you to write down your wishes with regard to what medical procedures you want, or do not want to receive if you are in an irreversible coma, have been diagnosed with a terminal illness, or have suffered from a severe injury and are not expected to fully recover. It also allows you to designate an agent, advocate, or surrogate to speak on your behalf if you are unable to do so yourself.

Absolutely. You can act now to select family members, friends, or other trusted individuals to assist you if and when you cannot make decisions for yourself. You can prepare a durable power of attorney for health care and a living will to establish the kind of medical care you want. You can also set up a legal power of attorney so that someone else can pay your bills and manage your financial affairs while you are ill. Again, by making those decisions now, you will give your family members the ability to make decisions for you when you can’t without having to get a court-appointed guardian.

“Probate” is the legal process through which a deceased person’s assets (such as bank accounts, vehicles, real property, and investments) are transferred to others. County Probate Courts oversee this process. When a person makes a Will, it controls how his or her assets will be transferred. If a person dies without a Will, the probate law in Ohio will control how the assets will be divided. If there are no living family members, the assets go to the state.

The Probate Court appoints an executor or administrator for each estate, and that person is responsible for managing the estate. The executor or administrator will determine what assets the deceased person owned, pay any bills the person owes, and then distribute the remaining assets. These are called “probate assets.” Certain kinds of assets do not have to go through probate. Any asset that goes directly to another person following someone’s death without having to go through the probate process is called a “non-probate asset.”

You want to limit or avoid probate because:

1. It can take a long time to administer even simple estates,
2. It can take money from your savings and other assets – money that would otherwise go directly to your family.

It is also worrying for your family—the very people you have always worked so hard to protect and preserve from worry. By investing some time and money to set up these automatic transfers, spouses, parents and grandparents can help their family members avoid or limit probate after they pass away.

As mentioned above, some of your assets will not have to go through the probate process if you take steps now to make sure that they will transfer directly to another person when you die. For example, you can:

1. Make sure that your home or other real estate transfers to another person by preparing a particular kind of deed;
2. Put most or all of your assets in a “living trust,” which allows you to use and enjoy the assets during your life, but transfers them to your loved ones after your death; and
3. Ensure that your retirement and other investment income will automatically be paid to your spouse, children, or charity.

But it is not enough to simply leave a letter or even a Will saying you want these things to happen. You will need to adhere to the legal processes that Ohio law establishes in order for these transfers to occur automatically. My office can help you make sure you do it according to the law.

Estate planning is not just for the rich. No matter who you are, you need what we call the “three essentials” of estate planning – a will, a living will and a healthcare power of attorney. These documents can be combined in our Three Essential Bundle to save you money. If you own a home, or a car, or have bank accounts, estate planning allows you to protect and pass more of your assets along to your family. Families with modest incomes and property can benefit as much from estate planning as wealthier families by preserving as many resources as possible for their loved ones.

It comes down to this: Would you rather spend a relatively small amount of time and money now to make sure that your family worries as little as possible, and receives as much of your money as possible, after your death? Estate planning allows you to do that.

We will spend some time talking about what you have and what you want to do with it. Once we have had that conversation, I can tell you what steps would help you prepare for your family. I can also tell you what it will cost to make those preparations. Think of me as a personal trainer for your estate: my job is to help you reach the estate goals you set for yourself.

If you’re ready to discuss an estate plan or your relative has passed away, call my office at (614) 610-4545. When we schedule the first appointment, my office will tell you what you need to bring to our first meeting to get started.