Thinking of death and end-of-life plans is understandably uncomfortable for most people in Ohio. Even more uncomfortable, perhaps, is leaving loved ones with a messy estate and no proper guidance during their time of grieving.
A proper estate plan is more than just an outdated will describing who gets what, although this is what most people think of when it comes to estate planning. While this type of planning allows for the passing on of inheritances and assets, it also can outline end-of-life care, minimize estate taxes and provide clear guidance for loved ones.
What you need for end-of-life care
What happens if you become disabled? What if you experience a long-term illness that incapacitates you? If no one knows what your medical care wishes are, a surviving spouse or other close family member will have to make hard decisions.
You can avoid this by including a power of attorney in your will, giving a trusted friend or loved one the ability to make medical decisions on your behalf. It is also a good idea to create a power of attorney that allows another person to care for your finances if you are unable to do so. A living trust is also a good choice for ensuring the proper handling of your finances.
Your will might be out of date
Say you created a will years ago, perhaps before you were married or even shortly after. You outlined your assets, dictated who is to receive what and put the document aside in a safe place. While that might have been great for the time in which you created it, it may no longer be relevant. Any significant life change or acquisition of assets requires that you update your will. Changes may include:
- Marriage or divorce
- Death of an heir
- New birth in the family
- Real estate acquisition
- Changes in business
Failing to take any of the above into account on a regular basis could leave your will ineffective or out of date in its time of need. Although you might not need to update your will annually, it is a good idea to conduct a yearly review of your estate and its important documents, updating as necessary.
Keep an eye out for estate tax
There might not be much left to pass on to heirs if taxes first eat up your estate. You may use annual gifts to the tune of $14,000 per spouse to reduce estate tax. Not only will the individual, charity or other group receiving the gift benefit, but it is an effective method to pass on important assets without forking over hefty taxes.
Contrary to popular belief, virtually everyone benefits from comprehensive estate planning. By creating wills, executing powers of attorney and updating other documents as needed, people in Ohio can be sure that their last wishes are respected and carried out.