Most people believe that estate planning consists of nothing more than preparing a will to designate how your assets are to be distributed upon your death. Proper estate planning, however, deals with protecting your family and assets, both during and after your lifetime. A comprehensive estate plan covers three key areas: preparing for your disability or incapacity, planning for your potential long-term care needs, and protecting your children’s inheritance even after your death.
The Basics
A will takes effect only upon your death. If you become incapacitated, a will does nothing to provide for the management of your assets during your lifetime. For example, if you have a severe stroke and are unable to handle your own affairs, someone must have legal authority to manage your assets and to make personal and health-care decisions on your behalf.
Without proper planning, a relative or friend must apply to the probate court to be appointed your legal guardian. Once the guardianship is established, your guardian is supervised by the probate court. The guardian must periodically file reports and accountings to demonstrate how you are being cared for and how your assets are being managed. The guardian also is required to get the court’s permission to spend money on your behalf. The process is burdensome and requires the assistance of an attorney who is familiar with the probate court’s procedures.
Although a will identifies the persons you want to receive your assets at death, there is a legal process involved in the way they’re distributed.
The administration of an estate is covered by Ohio law and is performed under the supervision of the probate court. This is a time-consuming and expensive process. Notices must be provided to all next of kin. It may be necessary to obtain appraisals of property, and estate receipts and expenses must be accounted for and approved by the court. It usually takes at least six months to complete the probate process, although it can often take longer. Expenses associated with probate can consume five percent or more of an estate’s value.
When your assets are distributed under a will, the property received by your beneficiaries is exposed to significant risk. For example, if one of your children is divorced a few years after receiving his or her inheritance, the divorcing spouse may acquire one-half of the inheritance in the divorce proceeding. If a child is involved in a lawsuit and a judgment is entered against him, all of the inheritance may be used to satisfy the judgment. If a child has creditor problems, assets received under a will are available to satisfy the claims of those creditors.
Proper estate planning can address these and other issues. Carefully drafted powers of attorney, trusts, transfer-on-death affidavits and other documents can help you avoid probate and protect you and your family from problems that may occur, both now and after your death.
Joseph L. Motta, LPA, is an estate planning and elder law attorney based in Avon Lake. You can reach him at 440-930-2826 or visit josephlmotta.com.
