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Estate Planning 101: What you need to get started

Grandpa Playing Dress-up with Granddaughter

Understand the basics and come talk with us

Creating a plan to divest your worldly goods to others at your death can be as simple as a one-page document. Or it could be a 70-page behemoth with stipulations that include how you’d like to see your vintage Elvis collection split between 23 relatives and friends and the Graceland Museum.

Proper estate planning is really peace of mind for you and your loved ones, and how you go about it is determined by your unique situation. Do you simply use a will? Do you combine a will and a trust together? Can you just title everything to others and be done?

How do you empower others to take care of your estate if you’re unable to do it yourself? Who makes your healthcare decisions for you if you can’t?

Understanding the basics of estate planning can help prepare you as you plan ahead. Our trust and estate planning services professionals also are here to answer any questions and help guide you through the many choices on how to structure your estate. There is never a cost to talk with us, and we believe every client – no matter the size of their estate – deserves our very best advice and attention.

What happens if I do nothing?

Ohio law and a probate court will determine how your assets are divvied up. That could go against what your actual wishes might be. But without the guidance of a will, the Statute of Descent and Distribution has set formulas for disbursing your estate (scroll to the bottom of the story to see how an estate is distributed without a will).

Is there an easier way to avoid probate?

Yes, it’s called titling. It is a way to manage your assets so they automatically pass to who you want upon your death. The ownership of your assets are reflected as “joint with right of survivorship” or “payable or transfer on death.”

Do you want to add someone’s name to your checking account or have it be a joint account? Who should it be payable to when you die? Did you add someone to your car registration? All those are examples of titling, and such decisions made early on can conflict with your final wishes. For example, your will might indicate you want your assets split 50-50 between your spouse and descendants. How you titled your assets doesn’t reflect that, however, and will supersede any decisions in your will. Our trust and estate planning experts are aware of such conflicts and can help you avoid them.

What estate planning documents should I have?

A will. Even if you think you have accounted for and titled every asset you own, there might be something you forgot about. Without the will, what should have been a simple process could take weeks or months to resolve and requires the probate court to name someone as executor and determine who gets that property. Such inconvenience can be completely avoided by having a will.

If you want all your assets to go into a trust and then let the trust distribute them, you simply title your assets in the name of your trust. Also, having a will ensures anything you miss also will be placed in the trust. Think of it as a safety net.

One thing to remember: A will must go through probate, and the drawback to that, aside from the costs, is it becomes a publicly searchable document. Establishing a trust avoids public scrutiny, and we’ll cover that point later in this article.

You can designate anyone you want as executor of your will, and often our trust department is asked to serve as a corporate executor. This relieves the beneficiaries of having to make financial decisions during a time of grief, and using our bank’s local, experienced professionals in this role removes the emotion and ensures strict adherence to your wishes.

The other estate planning document essentials are a durable financial power of attorney, which is explained in more detail here, a healthcare power of attorney and a living will. A living will ensures your family, your caretaker and medical personnel understand your wishes about your medical care if you become incapacitated physically or mentally. A healthcare POA designates someone to make decisions and follow your medical wishes. A financial POA allows someone you designate to handle your financial affairs. It can be as simple as paying your bills or as complex as selling your property.

Powers of attorney are only valid while you’re living, and you can revoke them at any time. The most important decision is whom you choose to act as your agent. It also is essential you understand the powers you’re granting that person.

An estate planning attorney can help you draw up all your estate planning documents including a will, a living will, a trust and powers of attorney. If you don’t have someone in mind, we can connect you with local, trustworthy attorneys. Avoid Internet do-it-yourself wills if you don’t have any legal knowledge or background. You can update your will anytime throughout your life.

What is a trust and why would I need one?

If avoiding estate taxes are the only reason you’re thinking of creating a trust, you might not need one. There are no more estate taxes in Ohio, and the federal estate tax threshold is $5.49 million for individuals and $10.98 million for married couples.

Privacy concerns, however, are still a popular reason to have a trust. Unlike a will, a trust is not public record. It doesn’t have to go through a probate court and avoids those costs as well. There are still costs associated with a trust, so carefully weigh the differences if cost is a factor for you.

The amount of money you have isn’t necessarily a consideration in establishing a trust. It’s important to consider how complex your situation is and what you’re trying to solve: Do you have a blended family because of more than one marriage? Do you want to leave money to charity in perpetuity? Do you have a special needs child who requires expensive care? Are there rules you want to establish that your beneficiaries must follow in order to receive their inheritance?

All of those situations might be better suited to a trust. The conditions are yours to make. For instance, any money that goes to your nieces and nephews is strictly to be used for education expenses, should be paid directly to the higher education institution and they must maintain a certain GPA in order to continue receiving funds. Essentially, you get to control your assets even after you’re gone. Is your son married to someone you think is bad for him? You can ensure he gets no money as long as they stay together. The language in the trust document will provide the direction your trustee needs to carry out your wishes.

One of the most common trusts is a revocable living trust, which is revocable during your lifetime and it becomes irrevocable at your death. A corporate or individual trustee takes over at incapacity or death. Living trusts allow you to control your assets as long as you’re mentally competent. You can alter a living trust up to any point you become incapacitated. The exception is an irrevocable trust, where you lose rights of ownership to any assets placed in this trust, even during your lifetime.

A less frequently used trust is a testamentary trust, or a trust under will. Because the trust is written into a will, it is publicly searchable and it must go through probate. But it could be attractive to use because you might be able to accomplish your goals in a simpler fashion.

Our bank’s trusted professionals often are chosen as co-trustee, successor trustee or executor because of the close relationships we’ve built with our clients over time as well as our investment management experience and the impartiality we exhibit in sensitive family matters.

We’re here to answer your questions

We know even after reading this you might still have questions about what is exactly right for you. Having that initial talk helps us understand you and base our recommendations on your unique situation. You can rest assured that every client conversation is confidential and does not require a prior banking relationship.

No matter what happens with the bank, your assets are separate and safe. We also are an experienced fiduciary, which means we always act in your best interest. Our commitment is always to help meet your goals while providing responsive, trustworthy service.

Call us to set up an appointment today and get started on creating peace of mind for you and the people you care about.

Statute of Descent and Distribution: What happens if I die without a will?

Here is how Ohio law determines how property is distributed when there is no will.

If you die leaving…

  • No surviving spouse but a child, children or their descendants – Child receives all, or children divide equally.
  • A surviving spouse and children or their descendants, when all of decedent’s children are natural or adopted children of decedent and survivor – Spouse receives all.
  • A surviving spouse and one child or its descendants, when said child is not natural or adopted child of survivor – Spouse receives $20,000 plus 1/2 of balance. Child or descendant receives the other 1/2.
  • A surviving spouse and children or their descendants when at least one child is natural or adopted child of survivor – Spouse receives $60,000 plus 1/3 of balance. Children receive 2/3 of balance, divided equally.
  • A surviving spouse and children or their descendants when none of the children are natural or adopted child of survivor – Spouse receives $20,000 plus 1/3 of balance. Children receive 2/3 of balance, divided equally.
  • A surviving spouse but no children – Spouse receives all.
  • No surviving spouse and no children or their descendants when parent or parents survive Parents or parent receive all.
  • No surviving spouse, no children and no parents when brothers and sisters survive – Brothers and sister receive all, divided equally.

*In many of the above summary sections, grandchildren take their deceased parents’ share, divided equally. Please consult with your attorney with respect to individual situations.


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