Trusts are a vital part of estate planning for many people in Ohio who want to manage their estate for the maximum tax benefit and flexibility in preparing to pass on their assets to their heirs. However, after a trust has been made and property retitled in the name of the trust, the person who created it may want to make some changes to its operations, beneficiaries or trustees. They may wonder how it is possible to change an existing trust in order to reflect changing life circumstances.
Many have worried that changes to tax law that took place as part of the Tax Cuts and Jobs Act of 2017 could potentially reduce the amount of charitable giving that takes place as part of will bequests and the estate planning process. Especially for people without living children or with a high net worth, using one's estate to provide philanthropic legacies can be a meaningful gift that reflects an individual's social priorities. However, over the years, the exemption of charitable bequests from estate and inheritance taxes has helped to inspire wealthy donors to make gifts to charity.
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.
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.
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.
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.
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.
Whether or not they already have estate plans, some Ohio residents may not consider digital assets as part of an estate. However, these assets, which range from social media accounts to bank accounts online, are numerous and can be valuable. A bitcoin account could be among the most valuable of these types of assets.
There are a number of reasons that Ohio residents might want to appoint a professional trustee. They might not have any immediate family, or there could be more conflict between immediate family members than anyone is willing to deal with while trying to administer the trust.
One of the most common reasons people delay creating an estate plan is the misconception that it is meant only for wealthy people. However, Ohio residents should know that they should develop an estate plan regardless of their wealth status. People who die without a plan in place may subject any finances or other possessions to court costs and other fees.