Answers from Paul Kellogg – Cincinnati Trust & Estate Attorney
WHAT IS PROBATE?
Historically, probate was the judicial process where a judge would determine if a will was valid or not. Nowadays, the term probate is used to describe administering an estate, the legal process where a decedent’s assets are collected, inventoried, managed, and distributed to creditors and beneficiaries.
The administration of a probate estate is carefully supervised by the courts. With rules and court oversight probate can be effective in preventing abuse and having assets transferred to creditors and beneficiaries of the estate. However, many complain about the cost, delay, and publicity of probating an estate.
WHAT IS A WILL?
A will is a legal document that provides instructions to be carried out after your death. A will is revocable during one’s lifetime but becomes irrevocable at death. Wills are important estate planning devices and may be used to direct who receives your assets, to nominate who will take care of your children, and to select who will manage your estate after your death. Preparation of a will is a very important part of estate planning. If someone dies without a will, that person dies “intestate.”
If someone dies intestate, Ohio law will then determine who the beneficiaries of the estate are and how the decedent’s assets are to be distributed.
You should not confuse a “will” and a “living will.” A living will is a legal document used to set forth your preferences regarding life sustaining treatment in the event you are in a terminal condition and is used in conjunction with a Durable Power of Attorney for Healthcare.
In order for a will to be valid, it must be signed and must be witnessed by two competent adults that are not beneficiaries.
WHAT IS A CODICIL?
A codicil is a legal document that changes the terms of your will. Many wills are drafted and stashed in a closet for years. Over time, marriages come and go, children are born, and life moves on. For those reasons, it is important to review your estate plan regularly with your attorney to adjust your estate plans to make sure everything will be distributed and administered according your wishes.
You should be careful not to cross out words or sentences or make notes on other corrections on your existing will. Instead, you should prepare a codicil or revoke your previous will and draft a new will. A codicil also needs to be signed and be witnessed by two competent adults that are not beneficiaries.
WHAT IS A REVOCABLE LIVING TRUST?
A trust is a fiduciary agreement when one party, a Settlor, transfers property to a trustee for the trustee to hold for the benefit of a beneficiary. A revocable living trust is a legal document that creates the trust, provides the trustee with powers and duties, and establishes rights for the beneficiaries. The Settlor may name himself as Trustee during his life time. A revocable living trust can be amended or revoked during the life of the Settlor and becomes irrevocable upon the death of the Settlor.
A living trust can be distinguished from a testamentary trust or an irrevocable trust. A testamentary trust is created in a will, cannot be used to bypass probate, and does not address your assets during your lifetime. An irrevocable trust cannot be amended or changed once it is created. Irrevocable trusts have tax consequences and should only be drafted as part of an estate planning package after considerable consultation with an attorney.
SHOULD I SET UP A LIVING TRUST?
Whether you should set up a trust and, if so, what type of trust are questions asked during your consultation with an estate planning attorney. There are several advantages with living trusts. A living trust can provide that your assets are managed the way you would like them managed. Because it is revocable, you can fully maintain control of your property. When you are no longer able to take care of your property, you can choose who manages your property, how your property is managed, and how your property is eventually distributed.
Another common goal of setting up a living trust is that it may be used to avoid having your assets go through probate. Although you still need a will, you can set up your estate to avoid court-supervised probate. This can be very good if you want to avoid the cost, delay, and publicity of probating the estate.
DO YOU STILL HAVE QUESTIONS?
If you still have questions regarding the specific nature of your case, you should not hesitate to consult with a knowledgeable lawyer from the Phillips Law Firm, Inc. today. Whether you are looking for guidance throughout the trust administration process, we are available to help. There is no time to waste when dealing with such important, and sensitive, legal matters, so do not hesitate to enlist the professional help that you will need.
Call Paul Kellogg, our Cincinnati trust attorney at (513) 985-2500 for a free consultation today!
Paul Kellogg is an attorney in Cincinnati with the Phillips Law Firm, Inc. Paul’s practice focuses on providing comprehensive estate planning and probate services to families and business owners, as well as providing guidance to entrepreneurs and businesses on a wide variety of transactions and disputes. He can be reached at (513) 985-2500 or via email at [email protected]. Please explore Paul’s other articles on estate planning and business on the Phillips Law Firm Blog page.