Estate Planning

Estate Planning

While it is not pleasant to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones.  Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones the expense, delay and frustration associated with managing your affairs when you pass away or become disabled. 

Providing for Incapacity

If you become incapacitated, you will not be able to manage your own financial affairs.  Many are under the mistaken impression that their spouse or adult children can automatically take over for them if they become incapacitated.  The truth is, in order for others to be able to manage your finances, they must petition a court to declare you legally incompetent.  This process can be lengthy, costly and stressful.  Even if the court appoints the person you would have chosen, they may have to come back to the court every year and show how they are spending and investing each and every penny.  If you want your family to be able to immediately take over for you, you must designate a person or persons that you trust in proper legal documents so that they will have the authority to withdraw money from your accounts, pay bills, take distributions from your IRAs, sell stocks, and refinance your home.  Only having a Will or a Power of Attorney may not fully accomplish your goals because a Will does not take effect until you die and a Power of Attorney may be insufficient.  In Ohio, third parties do not have any legal obligation to honor your Power of Attorney.

 In addition to planning for the financial aspects of your affairs during incapacity, you should establish a plan for your medical care.  The law allows you to appoint someone you trust - for example, a family member or close friend - to make decisions on your behalf about medical treatment options if you lose the ability to decide for yourself.  You can create a Durable Health Care Power of Attorney to designate a person to make such decisions.  In addition to a Health Care Power of Attorney, you should also have a Living Will which informs others of your preferred medical treatments, such as whether to use extraordinary measures if you become permanently unconscious or terminally ill.
Avoiding Probate

If you leave your estate to your loved ones using a Will, everything you own will pass through probate.  The process is expensive, time-consuming and open to the public.  The probate court is in control of the process until the estate has been settled and distributed.  If you are married and have children, you want to make certain that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled.  It is not unusual for the probate process to freeze assets for weeks or even months while trying to determine the proper disposition of the estate. You can imagine how stressful this process can be.   With proper planning, your assets can pass on to your loved ones without undergoing probate in a manner that is quick, inexpensive and private.

A common way to attempt to avoid probate is to create a joint survivorship bank account or "transfer on death" or "payable on death" arrangements.  While these tactics are appropriate in certain situations, sometimes they can create more problems than they solve.  This approach does not usually provide for multiple beneficiaries.

An alternative is to create a Revocable Living Trust.  This will enable your estate to avoid probate and resolve deficiencies presented by joint accounts and designated beneficiaries.

 Providing for Minor Children

It is important that your estate plan address issues regarding the upbringing of your children.  If your children are young, you may want to consider implementing a plan that will allow your surviving spouse to devote more attention to your children, without the burden of work obligations.  You may also want to provide for special resources for your spouse if you believe they will need help handling financial and legal matters.  You should also develop a plan that will come into effect if both you and your spouse die simultaneously or within a short duration of time.  A contingency plan should provide for persons you would like to manage your assets as well as the guardian you would like to nominate for the upbringing of your children.  The person, or trustee, in charge of the finances need not be the same person as the guardian.  In fact, in many situations, you may want to purposely designate different persons to maintain a system of checks and balances.  Without a plan, the decision as to who will manage your finances and raise your children will be left to a probate court.  Even if you are lucky enough to have the person or persons you would have wanted selected by the court, they may have undue burdens and restrictions placed on them by the court, such as having to provide annual accountings.

Other issues to consider in this respect are whether you would like your beneficiaries to receive your assets directly, or whether you’d prefer to have the assets placed in trust and distributed based a number of factors which you designate - such a
a potential guardian. Some guardians may lack necessary child-rearing skills. 
Planning for Death Taxes

Whether there will be any federal estate tax to pay depends on the size of your estate and how your estate plan works. There are many well-established strategies that can be implemented to reduce or eliminate death taxes, but you must the start the planning process early in order to implement many of these plans.  In 2013, Congress set a "permanent" federal estate tax exemption for all estates worth less than $5.25 million (adjusted for inflation).  Anything above that amount is taxed at 40%.

Ohio  recently repealed its estate tax, but the federal estate tax remains.  Remember: even with Ohio's estate tax repealed and the federal estate tax at a permanent exemption level, things can still easily change in the future, when new administrations take office. For more information, please see the "Estate Taxes" section of our "Frequently Asked Questions."

 Charitable Bequests – Planned Giving

 Do you want to give to a charitable organization or cause?  Your estate plan can provide for such organizations in a variety of ways, either during your lifetime or at your death.  Depending on how your planned giving is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains and estate taxes.

 A well-crafted estate plan should provide for your loved ones in an effective and efficient manner by avoiding guardianship during your lifetime and probate, estate taxes and unnecessary delays after your death.  You should consult with O'Diam,Estessr & Sove Law Group to review your family and financial situation, discuss your goals, and learn about the various options available to you.   Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family, no matter what the future holds. 


The attorneys of O’Diam & Estess Law Group, Inc., assist individuals, families and business owners throughout the Miami Valley, including Dayton, Kettering, Oakwood, Centerville, Beavercreek, Xenia, Springfield, Springboro and Troy, in Greene County, Montgomery County, Clark County, Warren County and Miami County.

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| Phone: 937-458-0574

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