Estate Planning FAQs

What is an Estate Plan and do I need one?

An estate plan is a Aplan@ 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.

Why should I have a Will?

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 Aexecutor@, 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.

What happens without a Will?

If you die with assets in your name and do not have a will:

• The distribution of your estate is governed by Ohio Law, specifically Section 2105.06 of the Ohio Revised Code. If you are survived by a spouse and children, your estate will be divided between those family members. If you have only children, the estate is divided among your children. If you have neither a spouse, or children or grandchildren, the estate is distributed to your parents, brothers and sisters, aunts and uncles, nieces or nephews, or cousins, depending on who survives you.

• The Court will appoint the guardian of your minor children without any input from you

• The Court will appoint the person that will serve as your estate representative

• The Court will required in most cases that the estate representative purchase a bond. With a will, the expenses of a bond can be waived

When does a Will not help?

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.

What is a Living Will?

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.

What is a Healthcare Power of Attorney?

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.

What is a Durable Power of Attorney?

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 Alimited@, giving very limited powers, or it can be Ageneral@, 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.

What is a Trust?

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 ALiving Trust@ is normally funded with the Grantor's assets, and the Grantor serves as the Trustee. Such a trust is Arevocable@ which means the Grantor can withdraw any of the trust assets at any time, or completely revoke the trust at any time.

What are the benefits of a Living Trust?

• A trust can pass property directly to heirs without the intervention of the Probate Court. Avoiding probate means avoiding the public nature of the process; avoiding court costs and attorney fees; avoiding delays in asset distribution associated with probate; avoiding the possibility of a will contest; and avoiding the need for a Asecond@ or Aancillary@ probate process for property held in another state

• A trust can reduce or eliminate estate taxes in some situations

• A trust can allow for one to provide for his own illness or disability by avoiding a costly and cumbersome guardianship.

• A trust can create a vehicle for the distribution of assets to dole out children's inheritance and life insurance benefits over a period of years; protect heirs who are vulnerable due to their level of maturity, age, health, or inexperience in financial matters; safely provide for children of prior marriages; and provide for your children in the event your spouse remarries and accidently or intentionally leaves your property to the second

What are some other ways to AAvoid Probate@?

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 Atransfer 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.