While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones of the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.
If you leave your estate to your loved ones using a will, everything in your name alone will pass through probate. The process is expensive, time-consuming and open to the public. The probate court is in control of the process until the estate has been settled and distributed. If you are married and have children, you want to make certain that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled. It is not unusual for the probate courts to freeze assets for weeks or even months while trying to determine the proper disposition of the estate. Your surviving spouse may be forced to apply to the probate court for needed cash to pay current living expenses. You can imagine how stressful this process can be. With proper planning, your assets can pass on to your loved ones without undergoing probate, in a manner that is quick, inexpensive and private. There are several methods to plan to avoid probate – most of these revolve around how you title your assets.
Providing for Minor Children
It is important that your estate plan address issues regarding the upbringing of your children. If your children are young, you may want to consider implementing a plan that will allow your surviving spouse to devote more attention to your children, without the burden of work obligations.
You may also want to provide for special counseling and resources for your spouse if you believe they lack the experience or ability to handle financial and legal matters. You should also discuss with your attorney the possibility of both you and your spouse dying simultaneously, or within a short duration of time.
A contingency plan should provide for persons you’d like to manage your assets as well as the guardian you’d like to nominate for the upbringing of your children. The person, or trustee in charge of the finances need not be the same person as the guardian. In fact, in many situations, you may want to purposely designate different persons to maintain a system of checks and balances. Otherwise, the decision as to who will manage your finances and raise your children will be left to a court of law.
Even if you are lucky enough to have the person or persons you would have wanted selected by the court, they may have undue burdens and restrictions placed on them by the court, such as having to provide annual accountings.
Of all the statistics we have heard, the one that is the most telling is that we all have a 100 percent chance of dying. All of our planning – or lack of it – must someday be put to the test, and after death administration is the process of implementing and supervising that planning.
Probate is the court-managed process where the assets of the estate are collected and distributed according to the provisions of the will. The only assets which pass through Probate upon death are those owned in the decedent’s name alone, with no co-owner or beneficiaries named. The Probate process typically takes at least six months but may be longer depending on the complexity of the estate, whether or not the decedent had a will, the location of real property, and whether there are will contests or disputes with creditors.
Upon the death of a family member, the following is a very general list of actions to be taken:
- Important legal papers, most importantly the decedent’s will or trust, should be located.
- An attorney should be contacted and an appointment set. The attorney is often the drafter of the documents, but need not be. It is the choice of the named Executor or Trustee.
- If there are assets that will be passing under a will, the Executor named in the will should, with the help of legal counsel, proceed to see that the will is probated.
- An inventory of all assets should be made, and assets which need immediate attention should be reviewed. These assets include life insurance policies, stock options and retirement plans.
- If the decedent was a principal in a business enterprise, care should be taken to determine what obligations and responsibilities the trustees have to continue its operation. A review of business succession planning documents detailing the ownership, operation and control of the business should be undertaken immediately.
If the decedent left a living trust-centered plan, the transition is normally orderly and simple. The successor trustee can take over the management of the trust affairs without interruption or delay. No court proceedings are required if all the decedent’s assets were titled in the trust or beneficiaries were named, and business and financial affairs can continue in the customary fashion.
We are located at 208 N. Main St., Wellington, Ohio 44090. We can be reached by telephone, email, or fax using the below listed information.