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Estate Tax
Probate & Non-Probate Assets
Wills
Durable Power of Attorney
Medicaid
Income Tax: Set-Up-In-Basis
Gift Taxes
Titling Your Assets
Living Trusts
Avoiding Probate Court Procedures
Living Will &
Healthcare
Power of Attorney
Organizer of Information, Document Locations, and Funeral Arrangements
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In planning your own estate, you will need a Will, Power of Attorney and, if you desire, a Living Will and Healthcare Power of Attorney. A Will provides for disposition of your probate assets at your death. A Power of Attorney allows you to appoint an attorney-in-fact to handle your affairs during your lifetime. A Living Will and Healthcare Power of Attorney gives direction about treatment for your physical body.
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To learn more about
Planning Your Estate
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The purpose of this section is to answer common questions about estate planning. It is not imperative that you understand all of the technicalities, but hopefully you come away with a general knowledge of estate planning and can recognize the factors that affect your own personal estate planning.
Estate Tax
Gifts just prior to death can reduce estate tax. For Federal estate tax, these gifts can be up to $12,000 per donee. The Ohio limit is $10,000 per donee.
Probate & Non-Probate Assets
It is important to have a list of assets including the beneficiary designees and Joint Tenants with Rights of Survivorship holders. Such a list clearly shows what assets will pass non-probate (by beneficiary designation or to a surviving joint tenant).
Wills
Family rifts over estates occur most often in relation to tangible personal property, not money. To decrease the possibilities of disagreements, write out a list of personal property and to whom it is to be distributed. This should be kept with your Will. Although not legally binding, a handwritten list goes a long way toward assisting the family in dispersing tangible personal property.
Durable Power of Attorney
Versatility is vital. Probably the most versatile tool for lifetime estate planning is a Durable Power of Attorney with a gift provision. This provision can grant power for gifts of money to decrease estate tax or to help with Medicaid planning should the Power of Attorney maker need skilled care. Consider this essential document in your estate planning.
Medicaid
There are many factors involved with the planning of an estate when someone is going into the nursing home. If it becomes clear that someone will need a nursing home at some point in time (i.e. early Alzheimer’s), it is best to see an eldercare or Medicaid-planning attorney in advance of occupancy in a nursing facility.
Income Tax: Step-Up-In Basis
Some couples hold numerous shares of one stock as Joint Tenants with Rights of Survivorship. Instead hold half in the husband’s name, Transfer on Death to the wife, and half in the wife’s name, Transfer on Death to the husband. If either dies, a full step-up in basis will be recognized to the survivor, who can then sell the decedent's shares without realizing a capital gain.
Gift Taxes
No gift tax is due unless the gift is more than $1 million. It is only necessary to file a return if gifts exceed $12,000 per donee per year.
Titling Your Assets
Generally an older person’s assets should remain in his/her name, unless full-skilled care nursing becomes a reality or is likely.
Living Trusts
For estate tax planning for couples, living trusts are marvelous vehicles. They are also quite helpful in circumstances where the next of kin is complicated or expansive and when out of state real estate is owned.
Avoiding Probate Court Procedures
Know that if an asset has a beneficiary designation or is held Joint Tenants with Rights of Survivorship, it already avoids probate court procedures. Be certain to fill out an asset sheet that includes how the asset is titled and lists any beneficiaries and contingent beneficiaries. This will help you see clearly if each asset avoids probate or not.
Living Will & Healthcare Power of Attorney
A Living Will is a legal document that states, "Do not hook me up; just let me die naturally ..." A Healthcare Power of Attorney designates an attorney-in-fact for medical decisions.
Organizer of Information, Document Locations, and Funeral Arrangements
This form provides a place to record important information that will be useful to those who are handling your affairs should you become incompetent or die.
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