We recently published a post that shared the results of the 2022 Caring.com estate planning survey. It asked American adults if they have wills or trusts in place, and two out of three of them do not. Some of them failed to act because they said that they didn’t know how to go about it.
Other reasons that were given were based on a perception of estate planning be extremely difficult to understand. With this in mind, we are going to shrink the matter down to size in an effort to demystify the process.
At the core, estate planning essentially comes down to a couple of key components, and asset transfer facilitation is one of them. Everyone knows that a will can be used to direct postmortem asset transfers, but you may be surprised to hear that it is not the best choice in many cases.
You probably want your loved ones receive their inheritances in a timely manner after you pass away. This will not happen if you use a will to state your final wishes. The executor would admit the will to probate, and the court would serve as a supervisory entity.
Depending on the circumstances, it will take anywhere from eight months to multiple years for an estate to pass through probate. The original Anna Nicole Smith case regarding the Marshall estate was held up in probate for over 16 years.
Granted, this is an extreme example, but probate can get lengthy. Expenses accumulate during probate as well, and you can imagine the legal fees for a 16-year battle. The value of the estate is reduced by probate expenses, and this is another major negative.
Do you want anyone that is interested to be able to find out how you distributed your assets? If you use a will as your asset transfer vehicle, the probate proceedings are public. As a result, anyone that wants to access the records can get all the details.
On the other hand, when you use a living trust as the centerpiece of your estate plan, all of these difficulties vanish. The trustee that you name will distribute the assets after your passing outside of probate. Plus, you can include spendthrift protections and provide limited ongoing distributions.
The revocable living trust is the most widely utilized alternative to a will, but there are other possibilities. When you work with our firm to develop your plan, we will gain an understanding of your situation and make the appropriate recommendations.
Your estate plan should address the circumstances that may arise toward the end of your life. A living will is an advance directive for health care that is used to record your life-support utilization preferences. You can also assert organ and tissue donation choices in a living will.
Medical scenarios that are not related to life-support can present themselves when you cannot communicate. To account for this possibility, you can name a representative in a durable power of attorney for health care.
If you have a living trust, you would be the trustee while you are living and fully capable of making sound decisions. To account for incapacity, you can name a disability trustee to administer the trust if it ever becomes necessary.
A durable power of attorney should be added as well to empower someone to manage property that is not held by the trust. Of course, if you are using a will instead of a trust, the durable power of attorney would give the representative broader power to manage your financial affairs.
You should also address nursing home asset protection. Over half of Americans will incur long-term care expenses, and Medicare does not pay for custodial care. Medicaid will cover the costs if you can gain eligibility, and we can show you how it’s done.
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As you can see, estate planning is not a huge mystery, but professional guidance is invaluable. When you engage our firm, you will immediately recognize our sincere commitment to your well-being. We treat clients the way that we would like to be treated if we were in their position.
If you are ready to get started, you can call us at 513-721-1513 to schedule a consultation at our Cincinnati estate planning office. There is also a contact form on this site you can use if you would rather send us a message.