Estate Planning Terms to Know
Estate planning is one of the most important things anyone can do to protect their loved ones. However, estate planning often gets overlooked amid the hustle and bustle of everyday life. It is never too early to plan your estate.
At StachlerHarmon Attorneys at Law, we strive to provide professional estate planning advice to the residents of Dayton, Ohio, and surrounding areas such as Warren, Greene, Claro, Miamisburg, Butler, and Preble Counties. We understand how important estate planning is for you and your loved ones, and we’re ready to help you move forward. Set up a consultation with our team today.
The Importance of Estate Planning
Estate planning must not be taken lightly. Here are three key reasons why estate planning is important, no matter how old you are or how many assets you own:
Protecting Loved Ones
Estate planning’s main objective is to protect loved ones. Planning one’s estate allows fair asset distribution among close relatives and beloved friends. Also, estate planning ensures that those who need the most protection get taken care of.
Respecting Final Wishes
Estate planning goes beyond asset distribution. Estate planning helps respect a person’s final wishes. These wishes include funeral and burial arrangements.
Critical Healthcare Decisions
Estate planning allows folks to take control of end-of-life decisions, particularly in situations of incapacitation and terminal illness.
Estate Planning Terminology to Know
A central component of estate planning is becoming familiar with relevant terminology. Here is a look at key estate planning terms:
Decedent is a legal term used to refer to a dead person in estate planning documentation. In other words, a person who drafts their will is referred to as the “decedent” in documentation when considering their death.
A person’s estate refers to everything they own, including liabilities. The estate includes properties (e.g., homes, land, apartments), buildings, vehicles, stocks, bonds, cash, and insurance policies. Similarly, personal items such as clothing and collectibles form part of the estate.
Probate is a legal process where a person’s will must go through the court to become officially “proved.” Since it is a public document, please note that probate applies to a will. The probate process also allows creditors and other individuals to challenge a will. Once a will clears probate, the named beneficiaries can officially take ownership of assets. Individuals who die intestate must have their estate go through probate before next of kin can take ownership of assets.
This term refers to a person who dies without a will. When a person dies intestate, the court assigns the individual’s property to the next of kin through intestate succession. Intestate succession specifies the order in which the next of kin may inherit property: surviving spouse, children, parents, and siblings.
A will—or last will and testament—is a public document in which a person states their final wishes. A will assigns asset distribution to loved ones. A living will is a document in which a person states their end-of-life arrangements, such as burial and funeral arrangements, and advanced healthcare directives. Wills go through probate as part of the formal process. A will may be challenged during probate.
A trust is a private document in which the grantor (owner of assets) transfers property into an entity formed within the trust. The beneficiaries may receive property of the assets upon meeting specific conditions. Trusts are not subject to probate, which is one major advantage of trusts. They can be revocable (subject to modification) or irrevocable (cannot be changed).
A beneficiary is a named person in a will or trust. The beneficiary receives the property upon the grantor’s passing (such as in a will) or when certain conditions are (such as in a trust). For instance, a beneficiary may inherit property upon their 18th birthday or when they have their first child.
An executor is the named manager of an estate in a person’s will. The executor ensures the assets are protected and handled appropriately until the probate process has been completed. An executor can be anyone a person chooses. In Ohio, executors must be at least 18, competent in handling the estate, and bonded by an insurance company.
Powers of Attorney
Power of attorney refers to a document in which a person cedes all decision-making power to a third party. Powers of attorney include handling estate matters and end-of-life decisions. Powers of attorney are useful in temporary or permanent incapacitation and terminal illness.
Advance Healthcare Directives
A person may choose to outline how they wish healthcare providers to handle end-of-life situations. These directives include a Do Not Resuscitate (DNR) directive stating the person’s wishes to forego interventions such as cardiopulmonary resuscitation (CPR). Additionally, healthcare directives may state a person’s wishes not to be put on mechanical ventilation or remain on life support machines for an extended period. Advance healthcare directives often consider financial matters as the primary motivation for avoiding lengthy medical interventions, but every situation is different.
Adult guardianship refers to situations in which a person is cognitively impaired in making decisions. In such cases, a guardian ensures the person is taken care of and handles their estate accordingly. The court must approve guardianship. The person must be of sound mind and certified by a treating physician for guardianship to be approved.
Conservatorship refers to a court-appointed individual overseeing a minor’s or incapacitated person’s estate. A conservatorship occurs when there is no guardianship in place. As a result, the court names a relative to ensure the person’s well-being is secured and their financial matters are handled appropriately.
Working with an Experienced Ohio Estate Planning Attorney
Here at StachlerHarmon Attorneys at Law, we are committed to helping our clients protect their loved ones. We strive to provide compassionate and skilled legal counsel during every step of the estate planning process. Set up a consultation with us today to start preparing for tomorrow.