What documents make up a complete estate plan?

A complete estate plan will save your loved ones time, money, and headache after your death, or if you ever lose the ability to manage your own affairs. Your estate plan should consist of at least the following four documents:

Last Will and Testament:

This document designates those persons you want to receive your probate assets after your death, and designates the person you choose to administer your estate your "Executor". It authorizes the payment of your debts, waives bond for your executor, and appoints guardian(s) for your minor children. A will may also be used to designate a trustee to manage your estate for the benefit of your minor children until they are old enough to inherit.

General Durable Power of Attorney:

This document give legal authority for the person you designate (your "Agent") to sign in your place and on your behalf. You can make this designation effective immediately, or only upon your incapacity, incompetence, or disability (Power of Attorney).  Your Agent can pay your bills, sell your assets, and close your bank accounts.  Obviously, you don't want to grant this authority lightly!

Health Care Power of Attorney:

This document designates the person you choose to make end of life decisions regarding your medical care if you are unable to make them yourself.

Living Will:

This document provides directives to your medical providers regarding the care you wish to receive (or not receive) if you become terminally ill or permanently unconscious.

Do I need a Will?

If you own anything of value, you should have a properly executed will to appoint an executor for your estate and direct who you wish your estate to go to after your death.  If you have minor or adult incompetent children, you can also direct who you wish to be appointed guardian for them.

Doesn't the State write a will for me?

Yes, the Ohio Statute of Descent and Distribution (Revised Code §2105.06) provides that if you die without a will, your estate will pass to your closest next of kin.  Generally, this would be your spouse first, then your children, then your parents, then your brothers and sisters or their descendants. Unfortunately, this may result in your estate going to persons whom you do not wish.  Moreover, if you die without a will, the Probate Court will require the person applying to administer your estate to post a bond for twice the value of your estate.  This expense could be significant, and could be avoided by having a valid written last will and testament.

What is the difference between probate and non-probate assets?

Probate assets are those assets which are owned solely by you at the time of your death.  Probate assets could include real and personal property, as well as bank accounts and investments.  After your death, the only person who will have authority to sell or cash in your probate assets is the executor of your estate.  Non-probate assets are assets that you have contractually designated who will receive it after your death.  Some examples of non-probate assets are bank accounts or real estate held in "joint and survivorship" or "payable on death" form, and life insurance, retirement accounts or pension plans that have a written designation of beneficiary.

Why do I need a will if all my assets are non-probate?

Many married persons hold all their assets in joint and survivor-ship form, and designate their spouses as beneficiary of their life insurance and pension plans.  This may serve to avoid probate upon the death of the first spouse, but then all the assets passing to the survivor will become probate assets thereafter.  Moreover, if husband and wife were to die in a common accident, then there is no "survivor", and the assets would then become probate assets, 50% in each spouse's estate.  Furthermore, a will is still necessary to designate guardians and/or trustees for your minor or adult incompetent children.

Is it possible to designate a beneficiary to receive my home?

Yes, under Ohio law, you may to designate a beneficiary, such as your child or children, to receive your home after your death by signing a "Transfer on Death Affidavit" and recording it with your county recorder. This would effectively make your home a non-probate asset.  After your death, the property can be transferred to your beneficiaries simply by recording an affidavit and attaching a copy of your death certificate.  Often times, however, this is more trouble than it is worth, as now each of your beneficiaries is a fractional owner of the home, and each of their spouses now has dower rights in the real estate.  In order to sell the home, all your beneficiaries and their spouses, will need to agree and sign off on the deed.  In my experience, it is often simpler to leave the home in your probate estate, so that your executor may sell it without requiring the consent of all your beneficiaries and their spouses.

Can't my power of attorney take care of my assets after my death?

No. A power of attorney's legal authority to act on your behalf ceases upon your death.  Only the court appointed executor has authority over your assets after your death.

Can I avoid probate with a living trust?

Yes, it is possible to avoid probating your estate with a living trust.  Moreover, for married persons with estates in excess of $1 Million Dollars, it is also possible to achieve significant estate tax savings with a properly structured trust.  A trust is more expensive to set up than a simple will, but may save your heirs significant time, expense and headache after you are gone. Whether a trust is right for you depends upon a number of factors, including the nature and size of your estate, the number and age of your beneficiaries, and whether the persons you want to administer your estate reside in or outside of Ohio.  To determine whether a trust is right for you, please contact my office to schedule a time to discuss your estate plan. 

Does my spouse have superior rights to my estate?

Yes.  Under Ohio law, a spouse has certain rights that can override your will.  This is of particular concern if you have remarried after being divorced or widowed.  Generally, your new spouse can elect to live in your marital residence rent free for one year, can elect to receive $40,000 as an allowance for support, and can elect to inherit what he or she would receive under the statute of descent and distribution as if you died without a will.  Assuming the new spouse is not the natural or adoptive parent of any of your children, he or she would receive, in addition to the $40,000 allowance for support, the first $20,000 plus 1/3 of the balance.

Can my spouse waive his or her rights to my estate?

Once you are married, a spouse cannot waive his or her statutory rights to your estate.  Before you are married, a spouse can waive his or her rights to your estate, provided there is full disclosure of the assets each of you are bringing into the marriage, and you each sign a valid pre-nuptial agreement.  If you are contemplating re-marriage, please consult with me before you tie the knot!

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