The 3 Key Elements of Building a Legacy Estate Planning Plan
A good estate plan includes five elements: Power of Attorney, Will, Trust(s), Health Care Directive or Medical Directive, Beneficiary Designation, and Power of Attorney.
Power of Attorney
1) The Power of Attorney Ohio laws allows you to designate someone to manage your affairs if you are unable or become incapacitated. Your agent is the person you have designated to manage your finances. A Power of Attorney in Ohio can either be general giving the agent authority to do any type of specific or business limiting your agent’s power to only those transactions specifically outlined.
2) A power of attorney is particularly important for singles, as this would normally fall to the spouse. A court will choose your guardian if you do not have a power of attorney.
Health Care Directive
A health care directive, which is like a power-of-attorney, designates someone to make Wiser healthcare choices on your behalf if you are unable. A health care directive consists of two main documents:
1. A Living Will is a written document that gives instructions regarding your health care in the event you are diagnosed with a terminal illness.
2. A Health Care Proxy is a person who will take your medical decisions if you are unable to do so.
Family members can sometimes disagree on what should be done in your care. It is important to have a health directive to make sure your wishes are fulfilled. Dennis Rathburn gives more information about each document.
When you retain an Ohio Estate Planning Attorney, to create an estate plan, it is important to ensure that your retirement plan beneficiary designations have been updated. Your beneficiary designations determine who will get your benefits if you die. These designations are more important than what is in your will. It is crucial therefore that you regularly review your beneficiary designations (at least once a year).
These strategies are just a first step towards ensuring your wishes are carried out when you die. Things change and life happens. It is important to create an annual maintenance program and to review each document with your Ohio estate planning attorney on a regular basis to ensure that everything is up to date.
A trust is a legal arrangement where a trustee holds legal title over the property for a beneficiary or beneficiaries. A trust administrator can decide when and how beneficiaries will receive trust assets.
There are many types of trusts. The two most common are:
Revocable trusts allow you to keep control of all assets and the freedom to modify or revoke the terms at any moment.
Irrevocable trust in which assets are not yours anymore and you typically can’t make any changes without the beneficiary’s permission. However, the benefit is that appreciated assets aren’t subject to estate taxes.
When deciding whether to place your assets in a trust, the most important thing is that assets owned by trusts are exempted from probate. Assets not owned by trusts are subject to probate. Dennis Rathburn gives an overview of the most popular trusts.
A will is a legally binding document that specifies who will inherit your assets and property in AL after your death. The executor is the person you wish to follow these instructions. The will name a guardian (or guardians) who will look after your minor children and other dependents in the event of your death or incapacitation. Assets that are owned by trusts avoid probate, while assets that are not trust-owned assets are subject to probate.
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