Having a well-written, updated will or estate plan is the best protection against leaving a mess for your loved ones when you die. This is not a task to be left to your golden years. Life is unpredictable; you could die unexpectedly or suddenly be struck incompetent. Without a will, your grieving loved ones will have difficult decisions to make without you there to help them navigate the issues. Those who die without a will ("intestate"), are forced to have the state choose an administrator for the estate, decide how assets should be dispersed, and who should care for your minor children. If you are struck incompetent before a will is written, you will no longer be legally able to make these end-of-life or estate plan decisions. Those having a written will whose lives have since experienced any major changes (e.g. birth of children, divorce, death of spouse or child, second marriages, and financial changes), should have their estate plans assessed and updated by a probate attorney.
Estate planning refers to the creation of formal legal plans (wills and trusts) for distribution of assets or possessions after death and plans related to the care of surviving minor children and pets. Estate planning can also include formal documentation of your wishes related to healthcare and finances, and those empowered to carry them out, should you become incapacitated before your death. These "advance directives" may include living wills, durable power of attorney for health care and durable power of attorney for finances, durable mental health care declarations, and anatomical gift plans (organ and tissue donation). Experienced probate attorneys are able to assist you with the important legal considerations involved with estate planning, including the effect of family dynamics on a plan, navigation of the probate court process, and tax and creditor issues that may occur. These attorneys can help you achieve the best result for you and your heirs.
The cost of having a probate attorney create an estate plan for you generally depends on the size and complexity of your estate. The smaller and less complex the estate, the less expensive it typically is to have an attorney prepare a will or trust(s). Estates with more assets, potential taxes, or very detailed distribution plans will increase the cost of the estate plan. The following factors may also influence your final cost: size, type, and complexity of assets and estate holdings; how clear you are in your goals for your estate plan; how unusual your final plans may be related to heirs; how specific you want your property allocations to be (i.e. piece by piece or a percentage to each heir); how quickly you need the will or trust completed; how likely it is that your will may be contested (which might require extra work by the attorney to make things more bullet-proof); how experienced the attorney is; and where you live.
Do-it-yourself wills (via books, CDs, and online forms), are frequently touted as the easy solution for inexpensive estate planning. The reality is that a do-it-yourself will may seem inexpensive at first but can become quite expensive for heirs after your death if recognized as invalid by the probate court or if the will is contested. Furthermore, such a will, even if valid, may not carry out your intentions as hoped, as one size does not fit all when it comes to estate planning. Crafting an estate plan is much more than filling out forms; there are factors that attorneys will consider about your wishes, finances, family relationships, and probate laws in your state that will strongly affect the end result. Having a trained probate attorney write your will insures that your estate will pass exactly as you wish. If your budget is tight, consider visiting a probate attorney with clear, simple goals in mind for your estate and requesting an appropriate but uncomplicated will.
Probate is the public court that is responsible for seeing that your wishes are honored after your death. If your intentions haven’t been legally declared (if you die without a will), the court (and state law) will decide what is appropriate for your assets and heirs. When there is a valid will, probate courts determine and make all necessary creditor and tax payments for the estate and oversee the collection, maintenance, legal transfer, and distribution of probate assets to the heirs and beneficiaries of an estate based on the directions in the will. However, avoiding probate is sometimes recommended because of the increased administration, time, cost, and lack of privacy (probate records are public) involved with the probate process. To avoid or minimize probate, an estate plan many include funding non-probate financial vehicles like trusts, life insurance policies, annuities, and retirement plans, with designated beneficiaries, who are immediately and privately paid upon death. In Ohio, the probate process usually takes 6 months, depending on any estate disputes or other issues, and the court and legal fees will often range from 2%-4% of the estate’s value. A probate attorney can advise about how to best organize your estate for your heirs.
Estate Tax, sometimes known as inheritance tax, applies to sizable taxable estates (gross estate minus allowable deductions) passing to persons other than a surviving spouse or a qualified charity (these types of bequests are not subject to estate tax). Your gross estate generally includes all property in which you had an interest at the time of death; life insurance, annuities, trusts, and other financial interests payable to your estate; and the value of certain interests in property transferred by you to others within 3 years prior to your death. For 2007 and 2008, federal estate tax returns must be filed on taxable estates with assets of $2 million or more, at a maximum rate of 45%. In 2009, the maximum rate stays at 45% but the taxable estate threshold increases to $3.5 million. The federal estate tax is scheduled to be repealed in 2010, (and return in 2011 at 2004 levels, applying to estates of $1 million or more after deductions, with tax rates between 37%-55%) unless Congress changes the law prior to that time. It should also be noted that some individual states, including Ohio, have their own estate or inheritance taxes to be considered.
Gift Tax laws currently allow monetary gifts to be made, tax-exempt for the recipient, of $12,000 per person per year or $24,000 per married couple. For those with large estates or estates expected to experience significant growth, monetary gifts made regularly while you are alive can reduce the final amount that may be subject to estate tax. Some monetary gifts are never subject to gift tax regardless of the amount, and these include money given to your spouse, money paid directly to a provider for tuition or medical expenses for someone, money given to a political organization for its use, and money given to qualified charities.
Elder law refers to the practice of law that relates to the issues facing adults of advanced age, including retirement, long-term care, Medicare and Medicaid coverage, nursing-home care, in-home care, powers of attorney, medical directives, and other legal matters including elder abuse law.