Kathryn T. Joseph & Associates, Inc.

Cleveland Estate Planning Blog

Staying healthy into old age

According to the Genworth Cost of Cary Survey, the median price of a nursing home is $8,000 a month. Unfortunately, an average social security check is only $2,000 a month. The U.S. Department of Health and Human Services says that 70 percent of Americans will require long-term care at some time. With good planning, however, Ohio seniors may be able to cover the cost of care without sacrificing quality.

One way to plan for long-term care needs is to buy insurance. Both long- and short-term care policies could potentially fit a person's needs. Short-term care policies can be best for those who can't afford or don't qualify for a traditional long-term policy. This option could also provide time for a senior to decide whether to buy a traditional or hybrid policy.

When trusts are better for adult children

When creating an estate plan, an Ohio parent may want to consider placing assets in a trust for their adult children. While it's not uncommon for parents to do this when their kids are minors, it's also a smart idea for adult children who may not manage assets responsibly. Many adults simply lack the necessary knowledge to manage large assets.

While a person might be able to hire a financial adviser to assist in managing an inheritance, being unfamiliar with or irresponsible about money management could also extend to being unable to hire a competent adviser. A trust can be set up to make annual distributions based on part of the trust's value or as a percentage of income.

Common mistakes in preparing a living trust

There are two major errors that a person in Ohio creating a living trust should watch out for. One is failing to fund the trust, and the other is failing to involve successor trustees.

Living trusts have a number of uses in an estate plan. They can keep the estate plan private and out of probate. They can also be useful if the creator is incapacitated because the successor trustee can step in and manage the assets. However, sometimes a person will create the trust document and then take no steps to add assets to it. This makes the document useless. With no assets in it, the assets will instead go through probate and be distributed according to the terms of the person's will.

What is non-probate?

Upon your passing, your estate will go into a system called “probate.” Everything is subject to your will and the applicable laws for its final disposition. The process can be long and complicated, especially if you have a lot of assets.

It’s entirely possible to avoid this, however, by moving assets to “non-probate” status. This includes everything which is not held solely by you in some kind of partnership or trust. If the end is near and you want your heirs to avoid the hassles and cost of probate, there are options.

New federal tax law will affect estate planning

For people in Ohio and throughout the United States, the estate planning implications of the new federal tax law could be significant. The law worked to massively increase the exemptions for gift, estate and generation-skipping transfer (GST) taxes. When the Tax Cuts and Jobs Act took effect on Jan. 1, the exemption for all three of these types of taxes doubled up to $11,180,000 for a single individual and $22,360,000 for a married couple. These amounts are also slated to increase each year according to inflation.

These exemptions will remain in place for eight years until they sunset in 2026, when they'll return to their 2017 levels adjusted for inflation. Therefore, in order to achieve the maximum benefit from the tax law, it is important to put an estate plan in place prior to the sunset date. Using these exemptions early on can help to guard assets from future taxation due to later changes.

Planning for health care costs in retirement

Many Ohio residents contemplating retirement talk to their financial planners about their investments, Social Security benefits and taxes but neglect to discuss health care. Planning for health care costs is just as important as creating a financial plan because a sudden health crisis could drastically impact a retiree's finances.

According to statistics obtained from Fidelity Investments, the average couple will spend about $260,000 for out-of-pocket medical expenses during retirement. This does not include costs for long-term care. Prospective retirees should look at their monthly prescription costs and insurance plans when making decisions about retirement planning.

Estate plans affected by tax law changes

The federal tax bill passed in Dec. 2017 could have impacts on estate planning for people in Ohio and across the United States. There are several changes that can affect people's choices about how to plan for their property after death.

Some aspects of the tax system remain the same; estate, gift and generation-skipping transfer taxes remain in place and carry a 40 percent rate. However, the unified exemption has been doubled from $5 million to $10 million and is indexed to inflation. This increased exemption will remain in place until it sunsets in 2026. In addition, the concept of portability remains in place, so the remainder of the lifetime exemption that is unused at death can be credited to their surviving spouse for use in their own estate.

Using trusts in estate plans

When considering their assets and their goals, Ohio residents may begin to see that using a living trust may be more beneficial than using a simple will. Contrary to popular belief, trusts are not meant to used solely by individuals who are extraordinarily wealthy.

A revocable living trust can be a valuable aid to those who are unexpectedly incapacitated. Individuals can designate a successor or disability trustee who will have the authority to administer the trust according to the individual's wishes. A trust that is drafted correctly may also give a disabled beneficiary the care he or she requires.

Long-term care planning for senior citizens

Planning for long-term care is an important consideration for aging Ohio residents. It is a good idea for adults who are approaching retirement to have a conversation with their children about their plans for retirement and what should happen in the event of a serious illness. This conversation should include financial planning, estate planning and who should make important decisions about the senior citizen's long-term care.

Most people want to enjoy retirement in their current home. It is important to discuss whether changes may be necessary in the future. The structure of the home can impact an elderly adult's ability to live safely and comfortably in the home. In some cases, minor changes to areas like the kitchen and bathroom can make living at home practical while some aging adults may decide to move into a home that is more suitable for their needs.

Advantages and disadvantages of probate

People often have questions about what probate is and how it works. They also have heard things about probate in the news or from friends. Not all of what is said about it seems to be positive. Here are some basics to help you navigate this aspect of estate planning.


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Kathryn T. Joseph & Associates, Inc.
Executive Commons West
29425 Chagrin Blvd.
Suite 305
Cleveland, OH 44122

Toll Free: 888-335-6650
Phone: 216-245-0504
Fax: 216-765-8817
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