Estate planning isn’t something about which people like to think. After all, planning for your death means that you have to think about your death. It is, however, an important thing to do, and without the right plan in place, your loved ones who you leave behind can find themselves lost and dealing with very difficult and expensive legal processes just to get the estate settled.
So how does estate planning work? It’s both very basic and somewhat complex all at the same time. Explore an overview describing the basics of planning your estate, protecting your finances, and how having an estate planning attorney is important.
The Basics of Estate Planning
There are several basic concepts you’ll need to understand to get a solid grasp on the basics of estate planning, what it is, how it works, and how to make sure your affairs are properly settled. These concepts include wills, trusts, estate taxes, estate law, gift taxes and death taxes.
Creating a Will
The will is the basic keystone of every estate plan. It’s the document upon which the rest of the estate lies. It involves a document that serves to declare how you want your property to be disposed and divided when you die.
Wills only become legally enforceable when you pass away, which means you can change, modify, expand, or adapt your will any time you like until that point. You’ll want to include specific instructions to the executor, or person responsible for administering the estate.
A trust can act as a complement to your will; it’s established while you’re alive and it involves transferring your property to a trustee, who may be a person or corporate entity which manages these assets on behalf of beneficiaries. A living trust is active during your lifetime, while a testamentary trust becomes active when you die.
The terms of a trust are amendable, just like those of a will. They can be irrevocable or revocable, depending on whether the trust creator wishes to continue to have access to the body of the trust (called the trust corpus, also known as the principal).
Trusts can be used to gain professional management of property, to minimize estate and gift taxes, for fair distribution of assets, and to place conditions and limits on the awarding of assets.
Estate Taxes, Gift Taxes and Death Taxes
Fortunately for those who live in Ohio, you won’t have to worry about estate or death taxes. Ohio abolished these in 2013. Gift taxes, however, may still apply if the amount you distribute is significant, and you’ll want to account for this when you arrange for asset disposition.
Work with an Estate Planning Attorney
For many years, the Stano Law firm has provided residents of Cuyahoga County with outstanding estate planning attorney services. If you are in need of education, advice or help with asset protection, wills, trusts, or any other aspect of estate or end-of-life planning, we are here to help. Give us a call to sit down for a consultation on your estate planning needs today.