Estate planning has been on a lot of people’s minds lately due to the uncertainty created by COVID 19. Although estate planning can be complicated it doesn’t have to be, especially if you are just getting started. That is why we recommend everyone should start off at a minimum with the following:
- An Updated Will or Trust. Wills are easy to create and are usually inexpensive. Wills are administered through the Probate Court by an executor you have nominated in your will who is responsible for distributing your property as you have indicated. If you have minor children, your will is where you appoint a guardian to care for them if you were to die.
A trust involves more effort and cost to set up, but if set up properly, it can be used to avoid Probate. By avoiding Probate your family will save time and money when assets are being distributed to your heirs. A trust can also give your greater control on how and when your assets are distributed to your heirs, which is important if you have young or financially inexperienced beneficiaries.
- A Durable Power of Attorney. A General Durable Power of Attorney is intended to cover your financial matters in the event you cannot handle them yourself. The individual you appoint to make financial decisions for you is known as your “attorney-in-fact.” A Durable Power of Attorney is intended to avoid the necessity of an expensive and time-consuming court proceeding to have a guardian appointed in the event you become disabled and can no longer manage your own financial affairs.
3 Updated Beneficiary Designations & Asset Ownership. The beneficiary designations on your IRAs, 401(k)s, and life insurance need to be reviewed to ensure they are coordinated with your overall estate plan. Upon your death these assets will be distributed to the beneficiary you have listed and won’t be controlled by the terms of your will or trust.
You will also want to review how your real estate and other assets are titled. If these assets are titled jointly with another individual who survives you, the real estate or bank account will usually pass to the surviving joint owner, and not by the terms of your will or trust.
- Advanced Directives – Living Will & Healthcare Power of Attorney. A Durable Power of Attorney for Health Care and Living Will are designed to cover health care and life support. In a Durable Power of Attorney for Health Care you will name the individual you trust to make health care decisions on your behalf in the event you are unable to make those decisions yourself. In the Living Will you will set forth your preferences concerning life prolonging treatment.
Once you have these items in order, you will be well on your way to having a plan that will protect you and your family.
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 serving as outside general counsel to entrepreneurs, real estate investors and businesses where he provides guidance and advice 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, real estate and business on the Phillips Law Firm Blog page.
The article is for educational and informational purposes only and does not constitute legal advice. Anyone contemplating taking legal action is urged to obtain proper legal advice from an attorney licensed in your particular jurisdiction.