When it comes to estate planning, there is a common misconception that once you have drafted a will or trust, named a power of attorney, designated a guardian for your children, and signed the necessary documents; you do not need to revisit your estate plan again. However, this is not the case. Even the most comprehensive and well-crafted estate plan should be reviewed and modified regularly to ensure that it reflects major changes in your family, finances, and other significant life events. If you have questions about estate planning, including how often you should update your plan, it is highly recommended that you contact an experienced estate planning lawyer.
What Life Events Require Changes to My Estate Plan?
It is generally recommended that you review your estate plan every three to five years to ensure that the information is up to date. However, you will need to update your estate plan when any of the following major life events occur:
Marriage: When you get married, you will need to create a new will or living trust that names your spouse as a beneficiary and specifies what you want your spouse to inherit. Additionally, if you would like your spouse to have power of attorney for financial or health matters in the event that you become incapacitated, you will need to update your documents to include your spouse. If you get remarried, you will need to update your estate plan to protect your new spouse while ensuring that the new estate plan is consistent with the property division agreement in your divorce decree.
Divorce: Depending on the circumstances of your divorce, you may want to update your beneficiary designations on your life insurance policies, retirement accounts, and bank accounts. If your former spouse was your power of attorney, you may want to designate a new power of attorney.
Death of a Spouse: Most married couples leave their property to each other. If your spouse dies, you will need to create a new will or living trust, update beneficiary designations, and consider creating new powers of attorney or healthcare directives.
Birth or Adoption of a Child: Whether you have a biological child or you adopted a child, you will need to update your estate plan to ensure that they are provided for in the event that you die or become incapacitated. For example, if your children are minors, you can name a property guardian in your will, name a custodian under the Uniform Transfers to Minors Act (UTMA), set up a trust for your children, and name a trustee to manage the trust until your children reach a certain age.
Acquiring Real Estate: If you purchased a home or invested in real estate, this is a significant asset that should be included in your estate plan. There are also steps you can take to protect your home from probate, which is a potentially time-consuming and costly court process that oversees the transfer of your property after you die. The following are ways to avoid probate and save your inheritors time and money:
Create a living trust and transfer the home to the trust.
Create a transfer-on-death deed where you name someone to inherit the house upon your death.
Joint tenancy with right of survivorship, where the house will automatically pass to your co-owner, usually your spouse, without having to go through probate.
Relocating to a Different State: Moving to another state is another reason to review and possibly update your estate plan. You will need to consider the following when creating new estate planning documents:
You may need to name a new executor in your will.
Marital property rules may be different in the new state, so you may need to create a new will.
It is recommended that you use your new state’s forms to create new estate planning documents to name powers of attorney and other healthcare directives.
Significant Change in Your Financial Situation: If you have acquired significant assets or debt, it is important to reevaluate your estate plan to determine whether changes need to be made to your will, trusts, and strategies to reduce the burden of your debts on your loved ones.
Anticipating a Long-Term Illness: If you have health issues and are concerned about the possibility of a long-term illness, it is highly recommended that you update your power of attorney. In addition, it is important to create or update a living will and specify your wishes for medical treatment and end-of-life care.
How Do Ohio’s Estate Planning Laws Impact My Estate Plan?
According to the American Academy of Estate Planning Attorneys, the majority of trusts are not properly funded. In order to save time and money for your heirs and ensure that assets are transferred into your trust, it is important to keep the following factors in mind:
Probate Process: Estates valued at over $35,000, or $100,000 if everything goes to a surviving spouse, must go through probate, which can be time-consuming and expensive. Setting up a living trust allows you to avoid probate and transfer assets and property directly to your beneficiaries.
No Inheritance Tax in Ohio: Ohio has no inheritance tax, meaning your beneficiaries will not have to pay inheritance tax to the state.
Spousal Rights: In Ohio, spouses are guaranteed a portion of the estate, even if they are not included in the will. If you want to avoid disputes or unexpected conflicts, it is important that you account for these rights in your estate planning.
Will Requirements: Your will must meet certain requirements to be valid in Ohio. For example, it must be signed and witnessed by at least two people. If it does not meet these requirements, it can be challenged by the court or deemed invalid.
Guardianship for Minor Children: If you have children under the age of 18 and have not named a guardian in your estate plan, the court will appoint a guardian who may not be the person you want caring for your children.
Blue Ash Estate Lawyers at Wolterman Law Office Help Clients Update Their Estate Plans
If you require legal assistance creating an estate plan or updating an existing plan, do not hesitate to contact the Blue Ash estate lawyers at Wolterman Law Office. To schedule a free, confidential consultation, call us today at 513-790-4207 or contact us online. Located in Loveland, Ohio, we serve clients in Hamilton County, Fairfield, Norwood, and Forest Park.