"QUESTION WITH BOLDNESS..."
Do I have an Estate?
An Estate is simply the legal term to describe all that an individual owns or has a legal interest in. Therefore, everyone from the begger on the street to the president of the USA has an estate. The question is what is the size of your estate and is it sufficiently protected to allow for your enjoyment of that estate during your lifetime as well as the transfer of that estate to the individuals or entities of your choice upon your death.
What is Estate Planning?
Estate Planning is the process of answering the questions of what, when, how and who when it comes to your estate. For example what will happen to your resources if you become incapacitated and cannot manage your estate? What happens to your minor children if you become incompitent or die? Who will receive your estate when you are gone? How will your heires recieve their inheritance? When will your beneficiaries receive their inheritance? How will you hold title to your estate during your lifetime? Who will manage your estate after you are gone? These and many other questions must be answered in the estate planning process.
What is a Trust?
There are a number of ways to do Estate Planning. One of those is called Trust Planning which means that the primary document that you use to do your Estate planning is a Trust. A Trust is simply a legal container that holds title to your assets, appoints a Trustee, names beneficiaries, gives authority to the Trustee and gives instructions for the proper management and distribution of your estate during and after your lifetime.
What is a Trustee?
When a trust is created there must be a manager to administer the trust. That manager is called the trustee. The trustee can be either a person or an entity. This means the trustee can be a bank, a trust company, an attorney or any other person or entity. In addition a trustee can be either a single individual or multiple individuals. The trustee is that person who is named by the Trustmaker to manage the assets held by the trust. A trustee is the one that is responsible to manage the assets, distribute them, report the the beneficiaries and follow all the directions and instructions left in the Trust. In addition the trustee is the final arbiter of the interepretation of the instructions in the trust.
Can I benefit from a Trust?
This is a very personal question and one that can only truly be answered by you. However, in most cases the answer is yes. Any individual or couple that has an estate, desires to avoid the costs of Probate, establish a plan to reduce estate taxes, plan for the unexpected, and enjoy flexibility in planning could benefit from a Trust. The greatest benefits will accrue to individuals with assets in excess of $338,333. However, if an individual or couple has a special needs child or grandchild, has beneficiaries who may not be able to adequately handle their inheritance, or desires to leave assets to one or more charities, they may benefit greatly from the use of a trust. There are also many benefits that a divorced person, married couples, single individuals, and unmarried co-habitating couples. Call us to set an appointment and find out for yourself the benefits of a trust. - TOP -
Are all Trusts the same?
The simple answer to this question is no. There are several different kinds of trusts that can be created and used depending on the purpose and desires of the client. Primarily there are two types of trusts, there are Revocable trusts and Irrevocable trusts. The basic trust used in estate planning is a Revocable trust which sets up a basic scenario of asset management and beneficiary designations with simple tax reduction language. There are also are other types of Revocable trusts with more advanced tax planning. The other primary type of Trust is the Irrevocable trust. This type of trust is characterized by the fact that the terms and instructions listed in the trust generally cannot be changed. There are a very few exceptions that can allow for changes to be made however they are few and far between. The irrevocable trust is generally used for Life Insurance trusts, for special needs trusts, for charitable trusts and for other advanced estate planning and asset protection planning. They type and design of a trust is generally only limited by the imagination of the Trustmaker.
What is a POA?
A POA is a Power of Attorney. Essentially a POA is a document that grants power from the Grantor to the Grantee to take actions on behalf of the Grantor. There are several types of POAs and the type of POA is determined by the scope and term of the POA. The most popular type of POA is the General Durable POA which grants full authority to the Grantee to do anything and everything that the Grantor could do. There are limited POAs which can give full authority for a limited period of time or can give limited authority for an indefinate period of time or any combination of the two. The other very popular type of POA is what is called a Healthcare POA.
What is a Will? Do I need a Will?
The Will is the basic document of any estate plan. A will is essentially a letter from the writter to the Court listing the desires of the writter regarding the distribution of assets after the death of the writer. While the Court generally will follow the instructions in the Will, the Court is not bound to follow those instructions if the terms are challenged or if they are not allowed by law. A Will is only valid after the death of the writer and is only valid in Court. No bank, financial institution, or other organization will accept the authority of a Will by itself without an accompanying grant of authority from the Court.
Every person, regardless of their estate plan should have a Will to use as a backstop against the failure of any other type of planning. While a Will is generally the lest efficient planning tool, it is necessary as a basic tool. Regardless of the size of the Estate a Will is necessary to ensure the orderly distribution of assets that are owned soley by the writer without any form of beneficiary designation.
Is a Will the same as a Living Will?
While they share the word Will they are very different documents. A Will as shown above deals with the distribution of assets owned by an individual after death. A Living Will on the othe hand is only effective during your lifetime and has nothing to do with distribution of assets. A Living Will is a set of instructions from an individual to their doctor or hospital regarding end of life decisions. An Ohio Living Will directs the medical professionals vested with the individuals care to attempt to contact the individuals healthcare representatives if it becomes necessary to make an end of life decision. If those individuals are unavailable, then the Ohio Living Will gives permission to the medical professionals to withdraw certain life support measures in certain very limited circumstances.
What are Healthcare Powers?
Healthcare Powers are a series of documents that either grant authority from an individual to an individual or medical professional or give a set of instructions to the medical professionals. In Ohio there are three documents that make up the healthcare powers documents. The first is the Healthcare Power of Attorney, second is the Living Will and finally is the HIPPA form. The Healthcare POA is that document that grants authority to the individual or individuals of the grantor's choice to make healthcare decisions for the grantor if the grantor is unable to make such decisions. A Living Will we have discussed previously and a HIPPA form is that document that directs the healthcare professionals to share medical information wtih those individuals listed by the grantor.
