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Estate Planning: Wills, Probate, Trusts & Powers of Attorney
Estate planning can be a difficult undertaking, no matter what stage of life you are at. It is difficult to think of the end of our own lives and what will happen afterward. It’s easy to assume that everything will simply work out, but the reality is that the probate process and distribution of your assets can get quite complicated, especially if you are not prepared ahead of time.
Estate planning is essential to make sure that your assets are distributed properly and without too much hassle to your loved ones. There are many options within estate planning. We’ll take about a few below, but the team at Moseman Law Office is available to answer any questions you may have and help you get started.
To ensure your assets go to who you intend upon your death, the first important step is to name a beneficiary or beneficiaries, as well as successor beneficiaries.
Certain assets commonly have and make it easy to name a beneficiary. These include life insurance policies, mutual funds, brokerage accounts, IRAs, 401(k)s, and bank accounts. Depending on where these accounts are held, you should contact your HR representative or financial planner to discuss your asset and ensure it has a beneficiary named. It is best practice to review these every five years to make sure all of your accounts are up to date.
Transfer on Death Beneficiary
It is becoming increasingly popular to add a Transfer on Death beneficiary to assets such as vehicles or homes. These can be added by visiting your local title bureau. With a Transfer on Death beneficiary, the asset or property is immediately transferred to the desired beneficiary upon the death of the owner.
Wills vs. Trusts
Two commonly used estate planning tools are wills and trusts. Each has different requirements and is handled differently upon death. We’ll talk a bit about each, but if you aren’t sure which one is the best option for you, Moseman Law Office is here to help.
A will is a basic estate planning document that tells your executor how you want your assets distributed upon your death. It only becomes effective upon your death and can be altered as many times as you’d like before then. Your will can include multiple beneficiaries, guardians for any minor children, and may even include a trust to help distribute assets to minor beneficiaries. A will ensures that all of your assets have detailed directions for distribution, even if your assets already had beneficiaries named.
A trust is another estate planning tool that gives you more flexibility than a will. A trust should be set up during your lifetime and can be accessed by you or a designated Trustee at any time. Most commonly, people will set up a Revocable Living Trust, which can be amended until their death. However, recent changes to federal and state tax laws have made Trusts less necessary to protect one’s assets.
Other Types of Trusts
There are many different types of trusts that are available to protect various assets. Medicaid trusts can be put in place for those who wish to protect their assets for their beneficiaries while qualifying for state Medicaid benefits. You can also set up trusts to hold insurance policies, gifts to charities, and even trusts to protect your assets from your spouse if you think they will make poor decisions upon your death.
Outside of a will or trust, a survivorship deed is an additional estate planning document that allows for the transfer of property between spouses without a will. In the case of spouses and co-owners, transfer upon death affidavit can be put in place to allow for the immediate transfer of property the beneficiary named upon the death of the property owner.
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Real Property Vs. Personal Property
The law regarding real property is vast and complex. Real property cases range from property transfers to disputes and include land, buildings, and fixtures on the land. No matter which situation you find yourself in, an Estate Planning Attorney at Moseman Law Office can help you understand your ownership and your rights. This post will provide some useful information to help you begin.
Let’s begin by clarifying the difference between real and personal property.
Real property is land with or without a building, a building with or with land, and “permanent” fixtures on the land. Land includes the earth and what is beneath it, though airspace above it is not included. A fixture refers to anything which is attached to the land, like plants planted in the soil. If the fixture is portable or was once part of the land and has been removed, like a mineral or a plant that has been harvested or dug up, it is personal property.
Personal property refers to every other type of property besides real property. Tangle or intangible belongings are considered personal property. Furniture, vehicles, artworks, stocks, and cash are personal property.
Real Property Ownership
This is the simplest form of ownership. One person possesses full ownership of real property and has the right to use it as they choose, possess rents, goods, or profits acquired because of ownership of the property, mortgage the property, and determine what can be done with the property. There are limitations to what can be done with the property even with full ownership due to local restrictions and the interests of neighbors.
Two or more individuals can own the same real property.
If their share is not specified as being of equal, undivided value, this is known as Tenancy in Common. Each owner has the legal right to sell or transfer their interest in that property without the consent of their co-tenants. If one of the property owners passes away, their interest in the property passes to their heirs rather than their co-tenants.
Joint Tenancy with Right of Survivorship defines undivided interest in the property by both parties. Neither party can sell or transfer their interest in the property without the consent of their co-tenants. If one of the parties passes away, the property will become the full property of the co-tenant. For this to be binding, the deed must include specific language defining the ownership.
Real Property Deeds
General Warranty Deeds are the most common deeds in Ohio. This deed assures the Buyer that the Seller is selling the property under good title and that the Buyer’s ownership is warranted by the Seller against claims by third parties.
Couples or other groups of individuals who wish to share ownership of property and pass that property on to their co-tenant need a Joint & Survivorship Deed.
Fiduciary Deeds are given to individuals acting as either an Executor, Administrator, Trustee, or a Guardian, so they can legally transfer property.
Quit Claim Deeds are used when real property is sold in “as is” condition. These deeds state that the Buyer legally assumes any and all risks of ownership of that property. These risks include needed repairs, disputes, and claims.
Moseman Law Office – Estate Planning Attorney
Estate planning is not something you should tackle on your own. It is always best to work with an Estate Planning Attorney who can make the best recommendations for your assets and circumstances. Moseman Law Office has been working the ins and outs of estate planning for years and is the perfect partner to navigate the entire probate process.