An estate plan is a plan to handle your assets if you become incapacitated, and to distribute your assets at your death. A plan can be very simple, e.g. a Will, or involve one or more Trusts and related documents. Most people need an estate plan, and it is best to have the documents in place prior to the time that they are needed.
A will is the legal statement of a person’s wishes as to the disposition of his or her property after death. In addition, you may name in your will the person you want to handle your estate. This person is called the executor, or personal representative. A will also lets you name the person that you want to serve as your minor children’s guardian. With a will you can also make gifts of your body for transplants or research, or provide instructions on where and how you wish to be buried.
If you die with assets in your name and do not have a will:
A will only controls the assets that are in your name at the time of your death. There are many types of assets which are not part of your estate and do not pass under a will. For example, life insurance, annuities, retirement benefits, and IRA accounts are usually payable to a named beneficiary, so they are not part of the estate and are not controlled by the will. In addition, property owned by a husband and wife as joint tenants with right of survivorship automatically pass to the surviving owner, regardless of what is said in the will. In addition, contrary to popular belief, a will does not have any affect on whether or not your estate will have to pay estate taxes. There are, however, many ways to minimize estate taxes which can be discussed with your attorney.
A Living Will is a document that allows you to tell your family, friends, clergymen and physicians that you do not wish to be kept alive by artificial means.
A few of the advantages of having a living will are that you control the decisions regarding your life; you have peace of mind with respect to family members; and you prevent disputes among family members because you have made your wishes known ahead of time.
A Power of Attorney for Healthcare is a legal document that authorizes another person to make healthcare decisions for you if you are unable to do so yourself. A Healthcare Power of Attorney becomes effective only when you cannot make decisions for yourself.
Some of the advantages of a Power of Attorney for Healthcare include giving you and your family members peace of mind; it helps to ward of disputes among family members who are trying to make decisions for you; it gives direction to your physicians who now know the identity of the person that has the authority to make decisions on your behalf; and it can obviate the need for the appointment of a guardian.
A Power of Attorney is a document that allows you to designate an individual (frequently your spouse) to take care of your financial and business affairs and sign your name when necessary in the event you are unable to do so. A Power of Attorney can be limited, giving very limited powers, or it can be general, giving very broad powers. The holder of the power, called the attorney-in-fact, only has authority to act in your best interests. Depending on the language used in the document, a Power of Attorney can take effect with disability (springing power of attorney) or immediately upon the signing of the document. A Power of Attorney can be revoked by the maker at any time.
A trust is an agreement between the Grantor, of maker of the Trust, and the Trustee, or person that manages the assets in the trust for the benefit of the Grantor. A Living Trust is normally funded with the Grantor’s assets, and the Grantor serves as the Trustee. Such a trust is revocable which means the Grantor can withdraw any of the trust assets at any time, or completely revoke the trust at any time.
The Probate Court process is only required when you hold assets in your sole name. With proper planning, an estate plan can be implemented for very little cost that will avoid probate, and not require the formation of a trust and resulting transfer of property out of your name and into the name of the trust. By placing your property into joint ownership, or by creating transfer on death holdings, you can own and control your property while you are alive, and be assured that the assets will quickly and inexpensively be transferred to your intended beneficiary upon your death.
Probate is a court-supervised process for identifying and gathering a decedent’s assets, paying estate taxes, claims, and expenses, and distributing assets to beneficiaries. Ideally, the deceased defined their wishes prior to death through estate planning tools such as wills and trusts. If that is the case, the probate will be a relatively smooth and efficient process.
When a decedent owns assets, it is sometimes necessary to undertake a probate administration of the estate. This is true whether the decedent died with or without a will. When there is a will, it is said that the person died “testate.” If there is no will, the person is said to have died “intestate.” In either case, it is beneficial to seek the assistance of an experienced attorney to oversee the administration of the estate.
The services of an attorney are usually required because many legal and procedural issues arise, even in the most basic estate administration. There are many laws and procedures that relate to the probating of estates, and the family should be able to rely totally on the attorney to see that all acts are performed in accordance with the law.
The attorney will represent the estate’s personal representative (executor), the person appointed by the court to be in charge of the administration of the estate. The executor has the responsibility of performing all acts necessary in the administration of the estate, which includes identifying and appraising the estate assets, filing an estate inventory, paying the claims filed against the estate, distributing the assets, preparing the estate tax return if necessary, and filing a final accounting. The attorney and the estate representative are paid for their services out of the estate assets. Those fees are set by Ohio Law and must be approved by the court.
Yes. An heir to the estate may contest the probate process if they believe they are entitled to a more of the property and assets, or if a new will was recently executed. It is the responsibility of the executor or the court-appointed administrator to defend the estate in probate court. The attorney supporting the executor can assist in the securing the estate as well.
A living trust is one way you may be able to eliminate the need for probate. Your trust names a replacement trustee at the time of your death. The replacement trustee is instructed by the terms of the trust to distribute the remaining trust assets in accordance with your wishes as described in your trust without a court order.
Review the information on our Web site to learn about the probate and estate planning services we provide to our clients in the counties of Summit, Portage and Medina, Ohio. Please contact us or call us at (330) 785-3337 for more information.