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10.04.18   |   Insights

Everyone Needs Estate Planning

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A common misunderstanding is that only wealthy people need wills. Just the words “estate planning,” make the process sound more daunting—and expensive—than it really is.

People also ignore basic planning because Ohio laws set out a “default” way to distribute assets when the owner dies without a will, and those rules usually work pretty well for most people. But the reality is everyone needs to prepare for their inevitable demise. Good “estate planning” also involves preparing for possible emergency situations during your life.

Estate Planning helps avoid disastrous situations during your life. Good estate planning involves two documents that help avoid disaster during your life. Everyone should have a durable financial power of attorney and a health care power of attorney. The durable financial power of attorney delegates to your “agent” the authority to conduct business for you. It can be essential if you are out of the country or unconscious in a hospital bed. A health care power of attorney designates someone on your behalf to receive protected health care information and make health care decisions for you when you are unable to do so. The authority granted in these documents terminates when you die. If you do not have these documents when you become incapacitated, the only way to conduct business or make health care decisions for you is to have a guardian appointed in court. This is a potentially long and expensive process that also means the probate court will be involved in some of the most important and intimate decisions about your finances and health.

Probate is not the nightmare some suggest, but it is still good to avoid if possible. Some people would have you believe that everyone needs a trust to avoid probate and estate taxes. That is not true. There are some easy ways to either avoid probate or at least minimize its involvement in your affairs. Although some people do need a trust for a variety of reasons, not everyone needs that level of complexity and cost to achieve their estate planning needs.

If you have young children or beneficiaries with special needs, you really need estate planning help. Again, not everyone needs a trust. But if you have minor beneficiaries, you need to consider what life may be like for them if you passed away. Likewise, people with special needs beneficiaries should consider more complicated estate planning arrangements. Along with determining the best people to care for these loved ones, you have to consider many complicated financial questions. These are discussions you need to have with an experienced attorney.

Default rules may not work for you if your family situation is different from the stereotypical nuclear family. Default rules for estate succession are like most default rules: they work for most people most of the time. But they do not work for every situation. Having a Will also makes probate administration easier and more efficient.

Good estate planning does not need to cost a fortune. Some people avoid estate planning perceiving that it is too expensive. Arguably just as bad, the fear that a lawyer is too expensive leads some people to potentially inaccurate on-line legal services. Meeting with a reputable attorney and preparing a good estate plan is not prohibitively expensive. Good estate planning is certainly far cheaper than it is to have a guardian appointed during life, or to try and “fix” problems later. And if you think you can obtain an estate plan from an on-line service that is as good as what a local attorney will provide, you are either talking to the wrong attorney or unaware of the benefits of good legal advice.

Your individual situation is unique. Nothing contained in this document should be relied on or construed as legal advice, and you should consult with an attorney before making decisions about your estate plan.

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