Kathryn T. Joseph & Associates, Inc.

Cleveland Estate Planning Blog

What is probate and how does it work?

It is a wise choice to be diligent about saving and managing your money so that when you pass, you may leave as many assets as possible to your heirs. The process to complete this transfer of property after you die is called probate.

Probate is a legal process used to authenticate and distribute the instructions of a will. The process settles the deceased's debts and administers how property is passed to beneficiaries and heirs. The court decides and distributes the assets if a person dies without a will.

Long-term illness care is a major expense for Baby Boomers

Many baby boomers are concerned that a long-term illness could wipe out their retirement savings. That's because skilled nursing and assisted living can be very expensive, and Medicare only covers a limited amount of the expenses. The annual cost of long-term nursing care can range anywhere from $60,000 to $93,000. With proper planning, however, there are some resources to make long-term care for Ohio families a lot more affordable.

A traditional long-term care insurance plan can be powerful financial protection against unexpected illnesses or chronic conditions. Premiums get less expensive the younger and healthier the person is. However, it's important to obtain a policy that covers both in-home and assisted living care. Hybrid life and annuity policies can have a provision that provides money for long-term care in certain events. The amount of funds available is usually limited.

Leaving a legacy to people who are not family

Some people in Ohio may have complex estates that include a business and other assets. They may think of the business and assets as their legacy and want to make sure their spouses and children benefit from that legacy. However, people often do not take into account the fact that their loved ones may be ill-prepared to take over their businesses or manage assets. It is possible to create an estate plan that still allows loved ones to benefit financially without giving them control of the legacy.

One man who did not consider this possibility sold the business his father had started and that he had built up into a valuable enterprise. Fraught family situations made him concerned that running the business would create additional stress for his loved ones. Although he got more than $50 million for his business, his decision meant that he had nothing left of his legacy.

When your debt is greater than your estate

It is not uncommon to have some amount of debt to your name. Just about every adult has a mortgage, car payment, student loans, credit card bills and other forms of debt that they are steadily paying down. When debt swells to uncomfortable levels, though, it can lead to big questions as we get later into life.

People that have incurred a substantial amount of debt often ask what happens to it when they pass away. Will it be passed on to their children? Their spouse? Does is simply go away? Generally speaking, if your debt is greater than the value of your estate, your estate may be labeled "insolvent".

Tips for funding a trust

People in Ohio who create a trust as part of an estate plan should make sure that they also fund the trust. Without placing assets in the trust, the trust document itself is like an empty container.

Different assets are placed in a trust in different ways. For example, a deed or deed in trust must be prepared for real estate. The name on the title is then changed to indicate that the property belongs to the trust. Once a piece of real estate is placed in a trust, a person may want to contact the county auditor's office to find out whether real estate tax exemptions must be refiled and possibly the insurance agent.

How dynasty trusts can allocate assets for future generations

With a standard trust, there is an eventual limit to how long funds from an estate can be distributed to beneficiaries. Typically, after the last beneficiary passes, that's it for distributions. For Ohio residents with significant assets looking to make their money live on indefinitely, this goal can be achieved with a dynasty trust. It's an option that may be a more appealing way to address the financial needs of heirs for multiple generations since changes were made to the tax law. 

How to set up a trust for the care of your pets

An increasing number of Americans are adding a pet to their homes. According to Statista, 68 percent of U.S. households own pets, which means there are 85 million homes in the country with pets.

Not only has pet ownership increased, but the way pets are viewed has changed too. In 2017, U.S. pet owners spent $69.4 billion on their pets. Many people have come to view their pets as members of the family.

Changing trust strategies in a high interest environment

Since the financial crisis of 2008, interest rates have remained very low compared to historical levels. However, rates are now starting to rise with no signs of stopping. As a result, portfolios that have performed well in a low-rate environment will need to adjust strategies going forward. Two tools that are particularly advantageous for Ohio families in the current environment are grantor retained annuity trusts (GRAT) and charitable lead annuity trusts (CLAT). 

Setting up a special needs trust

Parents in Ohio who have children with special needs may be concerned about how they can best provide for their children in the future, especially if they will need to access government benefits as adults. By using a special needs trust, family members can supplement a disabled person's income from government programs without limiting their eligibility for such income. By creating this type of trust, the beneficiary will be able to receive funds from the trust without limiting their access to government benefits.

A trust involves a donor, usually a family member, who provides the funds that make up the principal of the trust; a trustee, who administers the funds according to the donor's directions; and a beneficiary, who receives the benefits of the funds involved in the trust through disbursements of principal or interest. The donor's wishes are generally laid out in written materials that provide guidance to the trustee in making decisions. They can also remain in place even after the donor's death.

The role of an estate planning professional

An Ohio resident who is creating an estate plan may want to work with a team of professionals. This could include an attorney, financial planner, and accountant. Unfortunately, many people think an estate plan and a will are the same thing. However, there are many other components to an estate plan.

An estate owner may want to work with an attorney to create that plan. In addition to a will, there may be health care directives, trusts, powers of attorney and more. Estate plans are about more than just what happens to a person's possessions after they pass away.

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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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