While most people think of an estate plan and immediately associate a last will and testament, it is vitally important to understand that modern estate plans go far beyond simple wills. While the will is still vital to a well-designed estate plan, there are a number of matters that traditional wills cannot address. In this article, we will discuss the role of the will in your estate plan and the most important matters your estate plan should address.
What happens to assets after I pass?
This is the first matter that an estate plan addresses. While this has been traditionally addressed in the last will and testament, modern estate plans use trusts to distribute assets more efficiently and directly to heirs. Those who decide to place assets in trusts will still need a will. Meanwhile, the trust will activate immediately upon your passing. Assets held within trusts are distributed directly to heirs. In other words, they do not pass through probate. This means heirs get their inheritance faster, the court does not oversee the process of distribution, and these assets are not exposed to creditors in probate.
Those with significant assets will want to consider the use of a trust as a disbursement vehicle. Trusts provide privacy from public records by avoiding probate and the court. Assets are disbursed directly to heirs. While you are still alive, trusts provide specific tax advantages. Those who have real estate holdings or significant retirement assets may want to pursue a trust to avoid paying taxes on the assets and ensure the assets pass seamlessly to heirs.
What if become incapacitated while I am alive?
Sometimes, an unforeseen medical or traumatic event renders an individual unable to make decisions on their own behalf. At this point, you want to establish someone to make those decisions for you. There are two different types of power of attorney, financial power of attorney and health care power of attorney. Financial power of attorney means that someone else has decision-making power over your finances. Health care power of attorney allows others to make health care decisions on your behalf. These are two of the most important estate planning documents that we prepare.
How can I help my disabled loved one?
The use of special needs trusts to pay for ongoing medical services and cost of living expenses for those who are unlikely to be able to work is a great way to secure a disabled child or family member’s future. Since the assets are held in a trust, they are not considered part of your estate and you, therefore, do not pay taxes on them. Instead, the money is disbursed to a disabled loved one to cover their living expenses. The money is not considered part of their estate either which means they still may qualify for social security and other government safety nets.
Talk to an Ohio Estate Planning Attorney Today
The questions listed above are those meant to be addressed by your estate plan. Kryszak Law Firm, Co., LPA can help you take care of your own needs and the needs of your family with a well-crafted estate plan. We can also help you reduce your tax burden in the process! Call today to learn more!